One of my all-time favorite companies is selling off right now...
And I'm not worried a bit about it falling much more.
How can I be so confident in saying this stock won't plummet?
Because people like income. They like dividends. And they like
safety. That's what this small-cap stock – and a handful of others like
it – provides.
The stock I'm talking about is Diebold (DBD). And while you
probably haven't heard of the company, it's one of the world's best
dividend-paying stocks.
Diebold is the world's No. 1 supplier of automatic teller machines (ATMs)
. It's also a leading supplier of security products, like bank vaults
and safes. It's a 150-year-old company. And it has increased its
dividend payment every year for 59 years, which is the longest streak of
any company in North America.
Over the last few months, Diebold has dropped about 15% from its
highs. But I don't expect the selloff to continue for much longer...
You see, even the 2008 financial crisis didn't stop Diebold from
raising its dividend payouts a few cents each quarter. In 2007, Diebold
paid $0.94 per share in dividends. In 2012, shareholders received a
total of $1.15 per share. That's almost a 4% yield at today's price.
With interest rates so low, there's a huge demand for safe, steady dividend-paying stocks.
And while most investors who want dividend income look to giant firms
like Coke and McDonald's, many small-cap firms also have extraordinary
records of consecutive dividend payments.
Diebold is one of the best. And its high yield is not the only
reason to buy this company. Over the next few years, we will see a huge
replacement cycle in ATMs.
These new ATMs are envelope-free. That means you can deposit checks
simply by placing them into the ATM. You can also buy stamps, transfer
payments between accounts, and have receipts sent directly to your
e-mail.
These machines are already being rolled out. It's just a matter of
time before banks all over the world are using these new Diebold ATMs.
Over the next few months, I expect the market will be weak. Stocks
have enjoyed a great run in the past year. They're due for a
profit-taking pullback. The debt-ceiling debate should put selling
pressure on the market. Plus, the average stock in the S&P 500 index
is trading at 15 times earnings. That's expensive considering earnings
are only expected to grow around 3% in the coming quarter.
The coming weakness could push the broad-market indexes 5%-10% below their current levels.
When this correction comes, look to buy small-cap companies like
Diebold. Although it might decline a few points from here, it's safe,
steady dividend will draw buying interest... just like it has for
decades.
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In
the aftermath of the takedown in gold and silver, today the man who
predicted this downside action ahead of time spoke with King World News
about what investors should expect next. William Kaye, who is one of
the savviest and most well-connected hedge fund managers in the world,
also told KWN exactly why the plunge is being orchestrated and what will
emerge from all of this. Kaye, who 25 years ago worked for Goldman
Sachs in mergers and acquisitions, had this to say in his fascinating
interview.
