The deep market sell offs after the tech and housing bubbles have left a generation of investors with a changed view of the stock market. While a little fear isn’t a bad thing, it is important to keep investing. For those who want to stay away from the stock market, direct stock purchase plans are a good way to buy into great companies without getting involved with Wall Street.
Going Direct
Most investors have a brokerage account through which they buy and sell stock. There is, however, another option. Forget brokers and buy stock directly from companies themselves. Large, financially stable companies like Exxon Mobil Corporation (NYSE:XOM), The Southern Company (NYSE:SO), and Emerson Electric Co. (NYSE:EMR) offer low cost plans that allow you to completely avoid Wall Street.
Big Oil
Exxon Mobil Corporation (NYSE:XOM) is a household name that probably has a gas station in your town. While the company’s Exxon, Mobil, and Esso brands are its public face, it does everything from drill for oil to refine oil into chemicals and other products to, yes, pumping gas into cars.
The biggest draw here is Exxon Mobil Corporation (NYSE:XOM)’s long history of rewarding investors via dividend increases. Although the yield isn’t exciting at around 2.8%, combined with regular increases, it should be high enough to interest growth and income investors. Note, however, that the top and bottom lines can vary greatly from year to year because of the commodity nature of Exxon Mobil Corporation (NYSE:XOM)’s business.
Despite that volatility, however, it is one of the most financially strong companies in the world. It has relatively little debt and ended the first quarter with around $6 billion in cash. Investors can buy in for as little as $250 and make regular investments of $25 or more with virtually no fees.
Industrial Giant
Emerson Electric Co. (NYSE:EMR) is an industrial giant. It has five business units; Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial and Residential Solutions. Emerson’s business is so large and varied that it serves customers from individuals (i.e., waste disposal units) to governments (i.e., wind power generators).
Emerson Electric Co. (NYSE:EMR)’s dividend has been increased for more than 50 years. Like Exxon Mobil Corporation (NYSE:XOM), its shares recently yielded around 2.8%, so growth and income investors should take a look. That’s particularly true because of the company’s exposure to emerging markets.
About 36% of the company’s 2012 top line was derived from emerging markets. Management’s intent is to increase that to 40% by 2015. This should help push the company’s growth rates higher. Of course, it still earns a notable percentage of revenues from developed markets. That’s why revenues fell during the 2007 to 2009 recession. Management, however, used that tough stretch to sell non-core assets and augment core areas with bolt-on acquisitions. No single move was material, but the long-term focus shows the strength of the corner office.
A Big Utility
The Southern Company (NYSE:SO) is one of the largest and most widely held utilities in the country. Unlike the other two names above, Southern’s around 4.6% dividend yield should be of interest to income investors. Moreover, it has increased the dividend annually for over a decade. The utility sell off has made these shares a good option again, though patient investors might want to wait for a yield in the 5% to 6% range.
The Southern Company (NYSE:SO) earns most of its revenue from its regulated operations in Florida, Georgia, Mississippi, and Alabama. The company has generally good relationships with its regulators and operates in growing markets. Organic growth should be enough to support slow, but steady, top- and bottom-line growth and dividend increases.
Over the long-term, Southern is building a nuclear facility and a coal gasification plant. These should support growth by keep fuel costs down and allowing the company to ask regulators for more rate increases. That won’t turn The Southern Company (NYSE:SO) into a growth company, but it should ensure that annual dividend increases keep coming.
Avoiding the Street
Direct stock purchase plans are perfect for investors who want to avoid the hype and complex loyalties of Wall Street. Exxon Mobil Corporation (NYSE:XOM), Emerson Electric Co. (NYSE:EMR), and The Southern Company (NYSE:SO) are all large, solid companies offering cheap plans that can keep you away from the hyper drama but keep you investing in your future. For more information on one of these companies and other great dividend stocks, check the link below.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Emerson Electric Co. (NYSE:EMR). and The Southern Company (NYSE:SO).
The article Don’t Be Afraid, Go Direct originally appeared on Fool.com.
Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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