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9 Top Dividend Stock Picks

We take a look at the yield-rich utilities sector, Big Tobacco, and the major integrated oil group.

9 Top Dividend Stock Picks
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Susan Dziubinski: Hi, I’m Susan Dziubinski with Morningstar.com. As the year comes to a close, we decided to pull together some of our best dividend-stock ideas from the past few months. First, we'll take a look at the yield-rich utilities sector. The sector is pricey. But we do think there are some good yield plays.

Travis Miller: Utilities are a sector that investors often turn toward for yield, but we also think that investors should be cognizant of valuations. Right now on the yield front, when you look at 10-year U.S. Treasuries below 2% and the U.S. dividend yield for utilities above 3%, utilities look like an attractive yield option. However, valuations are extremely rich. Price/earnings multiples, price/book multiples are all well above three-year decade averages. Even we think the sector is well overvalued. Although it started the year at fairly valued, we think utilities are now 13% overvalued given the run that they've had in 2019. 

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Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.