High yielding dividend stocks make stock investing a boring but in many cases very lucrative business. There is nothing wrong with that. Economic conditions have changed in 2022 and there are signs that the US economy may slow down and even face a recession soon.
The secret to successful stock market investing is to always be alert, flexible and ready to change investment strategy not by reading what some social media forums are saying, but based on facts and data.
Even if you only consider yourself an active investor, receiving frequent passive income doesn’t sound bad. When that regular passive income is also very attractive, enough to beat inflation in most cases and pay bills or fund some of your aspirations, high-dividend stocks deserve a place in your stock portfolio.
No one should complain about getting extra income lazily and passively. Here are the top seven high yielding dividend stocks to buy in July.
|WLK||Westlake Chemical Partners||$24.85|
|OCSL||Oaktree Specialty Loans||$6.55|
|LTFP||PennantPark Floating Rate Capital||$11.43|
|IHO||Omega Health Investors||$28.3|
|HEY||LP Energy Transfer||$9.93|
Westlake Chemical Partners (WLKP)
Westlake Chemical Partners (NYSE:WLK) operates “three ethylene production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana, with annual capacity of approximately 3.7 billion pounds and a 200-mile ethylene pipeline”.
The forward dividend yield is 7.44% and the 1-year target estimate is $42.71, which could mean an additional upside potential of 82%. The forward payout rate of 85.99% is high, but that doesn’t mean there’s no more room for further increases.
Notably, it should be noted that the dividend yield in WLKP shares exceeds the average yield of material dividend stocks by 2.82%.
Westlake Chemical Partners shares are now discounted as they have losses of around 12% in 2022. The company has excellent profitability and in 2021 net income increased by 24.76% to 82.55 millions of dollars. With a strong free cash trend, the dividend yield looks very safe now.
Oaktree Specialty Loans (OCSL)
Oaktree Specialty Loans (NASDAQ:OCSL) is a specialized finance company offering credit solutions to businesses that have limited access to public or syndicated capital markets. Types of loans provided include first and second lien loans, unsecured and mezzanine loans, and preferred stock providing both income and capital appreciation for Oaktree Specialty Lending.
The shares have a forward dividend yield of 10.19% and are cheap as they trade at a PE ratio (TTM) of 9.49.
The forward payout ratio of 89.78% is high and the good news is that the company beats the financial company’s average dividend yield of 3.18%.
Sales growth is robust and net profit growth was 504.88% in 2021 to $237.26 million. The one-year target of $8.14 represents a nice potential return of around 28%.
PennantPark Floating Rate Principal (PFLT)
PennantPark Floating Rate Capital (NYSE:LTFP) is a financial services company that invests primarily in US companies that have some form of competitive advantages such as competitive market position, growth potential, and strong cash flow trend.
PennantPark Floating Rate Capital shares have losses of almost 15% in 2022 and have a forward dividend yield of 10.02%.
They are also cheap as they trade at a PE ratio (TTM) of 11.15. This company has several high quality features. Sales growth is relatively stable while at the same time profitability has strengthened over the past two consecutive years. In 2021, the company recorded net profit growth of 206.93% to $56.52 million.
This stock has a 1-year target of $13.40 for possible capital gains of approximately 23%. Not bad at all, because if you add the dividend yield, the total return could be close to 33%.
Omega Healthcare Investors (OHI)
Omega Health Investors (NYSE:IHO) is a healthcare REIT that has steadily increased its dividend starting in 2003. This is very good news for investors who need not only regular income in the form of cash dividends, but also growth of these to fight inflation. That said, the forward payout rate of 175.74% is too high and could result in a dividend cut.
The stock has a forward dividend yield of 9.19%, beating the recent inflation figure of 8.6%. Additionally, the average dividend yield in real estate stocks is 4.46%, another beat for Omega Healthcare Investors. For REITs, the key metric to analyze and monitor is funds from operations (FFO).
The firm is doing very well because for three years it has been accelerating its FFO figures. After soaring 893.88% in 2019 to $686.71 million, FFOs increased by 8.44% and 12.0% respectively in 2020 and 2021. This trend is very positive.
ONEOK (NYSE:okay) is a midstream service provider that transports and markets natural gas. The energy price spike in 2022 does not have a very positive impact on ONEOK’s share price performance as expected, as the shares have suffered losses of nearly 8% since the start of the year. ‘year. Could this be a big contrarian game now? I believe him.
The OKE share has a forward dividend yield of 6.56% and a 1-year target of 72.06%. That would be a nice 34% return if materialized.
The forward payout rate of 86.13% is high and further increases are likely.
The business model of this company is very efficient and profitable. Sales growth of 104.24% in 2021 has been very robust and profitability is exceptional. Net income increased 144.73% in 2021 to $1.5 billion.
As long as high energy prices persist in 2022, ONEOK shares should rebound, while now their dividend yield largely compensates for the patience and expectation of this rebound while also easing strong inflationary pressures .
Barings BDC (BBDC)
Barings BDC (NYSE:BBDC) “is a non-diversified closed-end investment company. The Company’s investment objective is to generate income by investing directly in private, middle-market companies to help companies finance acquisitions, growth or refinancing”.
It invests primarily in fixed income securities such as bonds and syndicated senior secured loans. Barings BDC shares have a forward dividend yield of 10.30% and are cheap as they trade at a PE ratio (TTM) of 8.58. Analysts have a 1-year target of $12.11, which represents a 29% return.
The forward payout ratio of 96.55% is considered high, but that doesn’t necessarily mean it can’t continue to rise slightly.
The company looks to have found an edge in its business model for the past three consecutive years. In 2018 it reported a net loss, but since 2019, 2020 and 2021 it has reported profit. In 2021, net income growth was a remarkable 850.07% to $77.69 million.
Keep an eye on this stock as it is on sale now after suffering nearly 15% losses in 2022.
LP Energy Transfer (ET)
LP Energy Transfer (NYSE:HEY) transports and stores natural gas, crude oil, refined products and liquefied natural gas. Stocks are up almost 22% in 2022 which is explained by soaring energy prices.
The forward dividend yield is 7.71% and although the stock has rallied since the start of the year, it remains cheap at a PE ratio (TTM) of 9.38.
This company has a very conservative forward payout ratio of 53.34%. There is plenty of room for dividend hikes and special cash dividends.
Energy Transfer LP’s profitability is excellent. In 2021, net income increased by 944.51%. The company is also generating tons of positive free cash flow, the fuel for higher stock price valuation and higher cash dividends. It’s no wonder analysts have a 1-year target of $15.47 or a potential upside of 56%.
As of the date of publication, Stavros Georgiadis, CFA had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.