- High-yielding dividend stocks to buy are now a must. However, yields are not always sustainable and the selection process is critical.
- Citigroup (VS): Citigroup is a new favorite of Warren Buffett. The bank’s shares are significantly undervalued relative to their book value and have strong dividend metrics.
- Chevron (CLC): Chevron stock is a dynamic game. CVX’s expansion into Mexico could add to its already strong balance sheet.
- Intel (INTC): The company’s processors and GPUs are performing well in the context of the rise of artificial intelligence.
- Verizon (VZ): Utilities could thrive in an economic downturn, and Verizon could be a “best-in-class” choice.
- Ford (F): Ford’s payout ratio lags historical averages. Thus, an increase in the dividend could be in sight.
Finding dividend stocks to buy is a great option right now.
First, risk aversion tends to shift investor sentiment towards higher-yielding assets such as dividend-paying stocks and investment-grade bonds. Second, restrictive economic policies such as rising interest rates support dividend-paying stocks, as they are generally able to absorb swings in consumer confidence.
While most dividend payers are generally safe bets, some are risky from a yield standpoint. For example, a dividend could present a lucrative return in the current market climate, which could then erode due to cyclical purposes.
The purpose of this article is to identify high yielding dividend stocks to buy that could maintain their yield in perpetuity. So, without further ado, here are five high-yielding dividend stocks to buy.
|VZ||Verizon Communications Inc.||$49.10|
|F||Ford Motor Company||$12.85|
Dividend stocks to buy: Citigroup (C)
Citigroup (NYSE:VS) stock has been neglected over the past year. I suspect investors threw caution to the wind during the company’s restructuring period. However, Citi’s outlook is improving, and legendary investor Warren Buffett thinks so too after adding about 55 million Citi shares to his portfolio in the first quarter.
The big bank’s dividend yield of 4% is very respectable, especially since the C stock is undervalued. Citigroup stock is trading at a 1.9x discount to its book value, suggesting the asset holds abundant value.
I expect Citi to outperform the market in a higher interest rate environment. Higher rates will support the bank’s debt segment and stagnate its payroll, providing attractive residual value to its investors.
It’s a momentum game. Chevron (NYSE:CLC) has benefited greatly from rising energy prices, which has resulted in the company now having $33.05 billion in cash from its operations. I remain bullish on energy stocks for the foreseeable future as oil and gas prices need to pull back significantly before sector profitability takes a hit.
Chevron appears poised to expand its business by entering a License Agreement with the Venezuelan government and expanding into Mexico with a $1.6 billion deepwater project in the Gulf of Mexico.
CVX’s dividend yield is both lucrative and robust. First, Chevron’s dividend yield of 3% is supported by a coverage rate of 2.9x, conveying durability. In addition, Chevron’s return on equity of 14.7% suggests that it offers justified value to its investors.
from Intel (NASDAQ:INTC) use cases have grown significantly over the past decade. The company was able to take advantage of the artificial intelligence market with its processors used for time series programs and its GPUs for image recognition programs. Intel’s outlook looks bright amid a surge in tech hardware and software during the pandemic.
Intel’s momentum is here to see it all. The company recently exceeded its first-quarter profit target by 8 cents per share in a context of strong demand for semiconductors.
Additionally, Intel is offering a lucrative dividend at a yield of 3.1%. Additionally, Intel’s shareholder compensation looks sustainable, given that it sports a 2.4x dividend coverage..
Dividend stocks to buy: Verizon (VZ)
I disagree with by Ray Dalio first quarter Verizon (NYSE:VZ) to sell. I believe that utilities offer a great option at the moment, given the economic climate. Additionally, Verizon could tap into AT&T (NYSE:J) investor base, which is increasingly frustrated by the company’s recent change in shareholder policy.
Citigroup’s Michael Rollins justifies well my opening argument. Rollins said last month that communications could show durability during tough economic times, as investors see them as relatively defensive.
Verizon compares well from a quantitative standpoint. The stock offers a stunning dividend yield of 5.1%supported by a profit before interest and tax margin of 21.4%. Finally, Verizon claims net income of $180,740 per employee, suggesting it could outpace rising input costs caused by a tight labor market.
Ford (NYSE:F) is one of the most traded stocks on the market. Volatility is therefore inevitable. Additionally, the F stock is cyclical due to the nature of its product offerings. Still, I believe Ford is a solid bet on long-term dividend yield if you’re willing to take the risk.
The company’s ICE and EV divisions are both operating proficiently, with total wholesale shipments reaching approximately 970,000 vehicles in the first quarter, leading to an increase in revenue of $457.31 million and an earnings beat of 1 cent per share.
Finally, Ford pays a lucrative dividend with a yield of 3%. Ford’s dividend payout ratio is 92% below its five-year average, which leads me to believe that dividend increases are afoot.
As of the date of publication, Steve Booyens held indirect long positions in C, CVX, INTC, VZ and F. The views expressed in this article are those of the author, subject to InvestorPlace.com’s publishing guidelines.