The stock market is becoming increasingly unpredictable with each passing day. Savvy investors will recognize the uncertainty and shift some of their cash to stocks with solid dividends.
Though the full payment of dividends is not entirely guaranteed, most dividends are paid in full. Unless the economy goes off a cliff, stock dividends are likely to be paid.
Let’s take a look at four of the most intriguing stocks with dividends over 5%: Phillip Morris International (PM), BCE (BCE), The Kraft Heinz Company (KHC), and Dow Inc. (DOW).
Phillip Morris International (PM)
PM is currently transforming its business, or at least altering it to provide health-conscious products. The company’s reduced-risk products are quickly expanding in size and merit. At the moment, these unique products account for around one-quarter of the company’s revenue. PM has a dividend of 6.73%.
PM has solid POWR Ratings highlighted by a “B” Peer Grade. Furthermore, PM is ranked in the top third of nine publicly traded companies in the Tobacco industry. Out of the eight analysts who have studied PM, six recommend the stock as a “Buy,” while two recommend it as a “Hold.” None advise selling.
PM’s low forward P/E ratio of 13 makes the stock even more appealing. The company’s heated tobacco IQOS product has earned the FDA’s stamp of approval, paving the way for the company to gain even more market share. The bottom line is PM is a value stock worthy of your attention based on its high dividend yield alone.
It is not often you find a stock with a dividend of over 6%. BCE provides that and is likely to follow through on its promise to pay its dividend this year. This Canadian communications business offers a vast number of communications services to both businesses and everyday people across the entirety of our neighbor to the north.
Check out BCE’s POWR Ratings, and you will like what you find: “A” grades in the Peer Grade and Trade Grade components along with a “B” for Buy & Hold Grade. BCE is ranked in the top 5 of 35 publicly traded companies in the Telecom – Foreign industry. The average analyst price target for BCE is $45.61, meaning it is likely to ascend more than 10% in the near future.
BCE dropped down below $32 this past spring only to bounce right back up, hitting $45 in June and hovered around $40 in the months since. Though BCE has not expanded sales much in the last couple of years, it has reported a profit margin of about 10%. This is a stable stock likely to hold its value and pay its yearly dividend simply because it has a reliable business model.
The Kraft Heinz Company (KHC)
If you are a bit hesitant to invest in tech stocks or growth stocks considering their recent run to glory and seemingly inevitable selloff, shift your sights to comparably safe investments such as KHC. This food and beverage company sells a little bit of everything ranging from meats to dairy products, coffee, beverages, and so on. KHC has a fairly high dividend of 5.22%.
Furthermore, KHC has above average POWR Ratings with a “B” grade in the Industry Rank and Buy & Hold components. Add in the fact that KHC is ranked in the top half of all Food Makers stocks, and you have even more reason to own shares. Analysts anticipate KHC to reach $36.07, which would mean a 21% upside. KHC is likely undervalued at its current trading price of $30.25, as its forward P/E ratio is a mere 11.43.
DOW Inc. (DOW)
Wouldn’t it be nice to collect 6% on your investment every year? That is exactly what DOW offers. This maker of agricultural, plastic, and chemical products/services sells its offerings to customers in 175 countries.
Its POWR Ratings are exemplary: An “A” Trade Grade and “B” grades in the Industry Rank, Peer Grade, and Buy & Hold Grade components. Analysts clearly believe in DOW, setting an average price target of $50.50, which could mean an 11% upside.
DOW recently beat analysts’ earnings expectations. Though DOW revenue is down on a year over year basis, sales volumes are down a mere 1%. Once DOW’s restructuring process to reduce costs is complete, the company will add $300 million more to its earnings. Even if you do not believe DOW will soar, it is worth owning based on the high dividend alone.
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PM shares were trading at $70.88 per share on Thursday afternoon, up $0.84 (+1.20%). Year-to-date, PM has declined -12.49%, versus a 4.71% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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