Investing in Dividend Paying Stocks for Market Downturns

A well diversified portfolio contains a balanced selection of stocks in multiple sectors, generally 5-7 industries. As economies ebb and flow different sectors perform in varying fashions. In addition, in questionable markets, there is safety from severe downturns in dividend playing stocks. A good dividend mitigates downward pressure on a stock. Further, by reinvesting a high dividend the investor gets to take advantage of dollar cost averaging, smoothing out the cost basis as the market fluctuates up and down. With world economies looking shaky such stocks are worth considering.

With this in mind here are some high dividend paying stocks you may wish to consider and research further. They are located in six different sectors, providing you with a diversified selection for possible inclusion in your portfolio. Factual information is from CNBC.com and accurate as of close of business 02/08/2010..

Hudson City Bancorp Inc. HCBK Price: $12.75 PE: 11.9 Dividend: $0.60 Yield: 4.71%
HCBK is one of the more conservative financial stocks around. They engaged in no risky lending or land deals. It's a safe, high yielding stock, boring but unlikely to suffer much damage in a down market.

Rocky Mountain Chocolate Factory Symbol: RMCF Price: $8.55 PE: 15.2 Dividend: $0.40 Yield: 4.61%
Rocky Mountain is a specialty retailer selling chocolate and confections. It stores are a mix of franchises and company owned sites. The company has a history of high dividend payouts and stock dividends. It is a small cap so it's less liquid than other selections.

Glaxo Smith Kline Plc Symbol: GSK Price: $38.10 PE: 12.8 Dividend: $1.93 Yield: 5.07%
A big name company, the dividend is well covered by earnings. It has a low PE multiple compared to it's peers, which, combined with it's dividend, should provide a cushion if the market takes a downturn.

BP Plc. Symbol: BP Price:$52.39 PE: 10 Dividend:$3.36 Yield: 6.41%
Another high yielding cash cow. There's nothing exciting here, but little to fear as well. The price will move some with the price of oil.

Consolidated Edison, Inc. Symbol: ED Price: $42.78 PE 13.5 Dividend $2.38 Yield: 5.56%
New York electric company keeps chugging along. The dividend has just been raised, showing the company is confident of it's earnings power.

Cinemark Holdings Inc Symbol: CNK Price: $14,83 PE: -47.8 Dividend: $0.72 Yield: 4.86%
This stock took a real earnings drubbing in the 4th quarter of 2008.Since then it has three profitable quarters in a row and it's latest earnings are due shortly. This theater operator should do well with the success of "Avatar" and the flow of 3-D movies set too hit the market should keep earnings swinging upward.

Full Disclosure: I am not employed in any fashion by any firm in the securities industry nor do I have a business relationship of any type with the companies mentioned. As of this writing I have a small holding in RMCF. I do not have any holdings in any other stock reviewed.. This is not an offer to buy or sell any security, nor is it a recommendation. These are simply my thoughts on these securities. Please consult your own investment adviser and research any security thoroughly before making any investment.

Sources:
http://data.cnbc.com/quotes/ED/tab/3
http://data.cnbc.com/quotes/GSK
http://data.cnbc.com/quotes/cnk
http://data.cnbc.com/quotes/BP
http://data.cnbc.com/quotes/HCBK
http://data.cnbc.com/quotes/RMCF