Defensive stocks are back in force in the market. Indeed, the biggest names in the consumer staples sector have performed well in recent months. In addition, these same securities are recognized for the quality of their dividends and are sometimes even ‘Dividend Kings‘ or ‘Dividend Aristocrats’. In this article, we will present the best dividend paying stocks in the consumer staples sector based on several criteria.
Methodology
Excellent performance in the past year
High dividend yield
Low Payout Ratio
Large cap (Minimum of 10 Billion dollars market cap)
High dividend growth in the past 5 years
What’s a good Price to cashflow ratio?
The price-to-cash-flow ratio (also known as the price-to-cash-flow or P/CF ratio), is a ratio used to compare a company’s market value to its cash flow.
For example, lets assume two stocks that operate in the same industry XYZ and ABC:
ABC has cash flow of $10 per share (P/CF ratio 100/10=10)
XYZ has cash flow cash flow of $5 per share (P/CF ratio 100/5=20
As you can see above, XYZ has a higher P/CF ratio. This indicates that the stock is trading at a high price but not generating enough cash flow to support the multiple. ABC with its smaller P/CF is preferred (all other things being equal).
The dividend payout ratio is the amount of dividend distributed by a company divided by the total earnings. For example, a company makes a profit of $ 100 and pays $ 40 in dividends. Its payout ratio is 40%.
If the ratio is high, the company pays almost all of its profits in dividends. There will be little money left in the coffers to innovate or expand to new markets;
It is preferable to invest in a company where the dividend payout ratio is low or medium. The reasoning is that these companies will have money set aside to invest in new projects and thus create growth;
Another variation of payout ratio (Trailing div / Earnings) is the payout ratio to cash (Div / Free cash flows). Earnings can be easily manipulated, so analysts use the payout ratio to cash to assess the safety of dividends better. The website ‘Marketbeat‘ provides the payout ratio to cash for Canadian stocks.
Best Dividend Paying Stocks – Consumer Staples sector
Name
Market Cap, $B
Div Yield
Div (a)
KO -Coca-Cola
278
2.75%
1.76
PEP -Pepsico
235
2.51%
4.3
GIS -General Mills
43
2.84%
2.04
K -Kellogg
24
3.18%
2.32
As of May 11th, Source: Barchart – Best Dividend Paying Stocks
Symbol
Price/Cash Flow
5Y* Div%
Div Payout%
52W %Chg
KO
23.99
20.00%
70.20%
18.57%
PEP
19.92
43.58%
67.56%
18.40%
GIS
14.78
13.48%
53.88%
15.25%
K
13.14
13.24%
55.33%
10.48%
As of May 11th, Source: Barchart *5 years dividend growth – Best Dividend Paying Stocks
General Mills, Inc. is an American manufacturer and marketer of branded consumer foods sold through retail stores.
Continues to generate strong cashflows;
GIS is a market leader in its segment and analysts expect the company to continue holding this position;
General Mill’s dividend grew 13.48% in the past 5 years;
Kellogg Company
Kellogg Company, together with its subsidiaries, manufactures and markets snacks and convenience foods.
Stellar dividend track record
Stable and reliable cashflows
17 years of consecutive dividend increases
Strang brand and pricing power which comes in handy in an inflationary environment
General Mill’s dividend grew 13.24% in the past 5 years
The North American stock markets remain marked by great volatility. From the precipitous market decline at the start of the pandemic to recent highs in 2021, the market has certainly tested the nerves of investors. But when looking for the best stocks, investors should consider long-term performance, not short-term volatility. To help you, we have compiled 3 lists of the best North American stocks:
the best Mega-cap stocks in terms of performance over the last 52 weeks. Mega cap means the company must be worth more than $200 billion in the market;
the best Canadian large cap stocks (Large cap) in terms of performance over the last 52 weeks. Large cap means the company must be worth more than $10 billion in the market;
the best Canadian mid-cap stocks in terms of performance over the last 52 weeks. Midcap means that the company must have a market value of more than $2 billion and be less than $10 billion;
the best performing Canadian small cap stocks over the past 52 weeks. Smallcap means that the company must have a value greater than 300 Million dollars
Source: Barchart 18 April 2022, Midcap means that the company must have a market value of more than $2 billion and be less than $10 billion
Top 10 Best Performing Stocks 2022: Small cap
Titre
Name
1M %Chg
52W %Chg
EMO.VN
Emerita Res
-21.85%
+825.49%
IPO
Inplay Oil
+36.47%
+780.39%
ASE.CN
Asante Gold
+36.02%
+776.00%
IBAT.CN
International Battery Metals Ltd
+20.20%
+704.05%
NPK
Verde Agritech
+20.00%
+688.43%
NGEX.VN
Ngex Minerals
+70.94%
+614.29%
OBE
Obsidian Energy
+23.96%
+614.11%
JOY
Journey Energy
+13.50%
+611.54%
PNE
Pine Cliff Energy
+68.75%
+535.29%
GMG.VN
Graphene Manufacturing Gr
+43.83%
+453.75%
Source: Barchart 18 April 2022, Smallcap means that the company must have a value greater than 300 Million dollars
Dividend Contenders Stocks are U.S companies that have paid and raised their dividends each year for at least 10 years. Once a Dividend Contender Stocks exceeds 25 years of consecutive dividend increases, it becomes ‘Dividend Aristocrats’. High Dividend Stocks are very popular with investors. they are perceived as the best tools to build a passive income from dividends and benefit from the potential growth of these bluechip stocks.
There is no doubt, that lists such as ‘Dividend kings‘, ‘Dividend Aristocrats‘ and ‘Dividend Contenders’ are an excellent starting point to our research. The purpose is focusing on high-quality companies with a track record of paying and increasing dividends every year.
There are 335 companies on the Dividend Contenders list. In this post, we chose to focus on high dividend stocks that have a least a 4% yield. The data is organized by sector to allow you to take into consideration diversification when choosing your stocks.
Below are the criteria used to construct the list list:
offer a minimum dividend yield of 4%;
Minimum of 10 consecutive years of dividend increases.
Pertinent ratios provided:
5 years Dividend Growth
Dividend growth is a feature highly sought after by investors. It is a sign of the good financial health of a company and of its capacity to grow its performance in a sustained manner. It’s also a great way to reduce the effect of inflation on your investment portfolio.
Payout ratio
The dividend payout ratio is the amount of dividend distributed by a company divided by the total earnings. For example, a company makes a profit of $ 100 and pays $ 40 in dividends. Its payout ratio is 40%. If the ratio is high, the company pays almost all of its profits in dividends. There will be little money left in the coffers to innovate or expand to new markets.
It is preferable to invest in a company where the dividend payout ratio is low or medium. The reasoning is that these companies will have money set aside to invest in new projects and thus create growth.
Beta
Beta is a historical measure of volatility which indicates the relationship between fluctuations in the value of the security and fluctuations in the market. If company ABC has a beta of 0.7 and its index (NYSE) drops by 10% on a trading day, then the stock will only fall by 7%. On the other hand, if the company has a beta of 1.5, then it is more sensitive to market fluctuations and if the market loses 10%, it will lose 15%.
Basic Materials
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** Record
Div Yield
5-Yrs Div Growth*
NP
Neenah Inc
11
4,78%
5,12%
LYB
LyondellBasell Industries NV
11
4,24%
4,66%
ODC
Oil-Dri Corp. Of America
19
4,05%
4,18%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
NP
654
N/A
0,79
LYB
34,943
26,6%
0,77
ODC
138
146,8%
0,40
Communication Services
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** Record
Div Yield
5-Yrs Div Growth*
CCOI
Cogent Communications
10
4,99%
14,21%
VZ
Verizon Communications
17
4,93%
2,08%
AQN
Algonquin Power & Utilities
13
4,45%
1,38%
PNW
Pinnacle West Capital
10
4,42%
5,35%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
CCOI
3,087
311,9%
0,74
VZ
217,909
58,8%
0,24
AQN
10,287
N/A
0,40
PNW
8,736
60,3%
0,25
High Dividend Stocks (Dividend Contenders)
Consumer Cyclical
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** Record
Div Yield
5-Yrs Div Growth*
CULP
Culp
11
5,79%
WHR
Whirlpool
11
4,03%
9,73%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Price
Div Yield
5-Yrs Div Growth
MO
Altria Group
13
6,48%
8,09%
PM
Philip Morris International
14
4,87%
3,75%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
MO
100,659
258,8%
0,24
PM
159,177
83,3%
0,36
High Dividend Stocks (Dividend Contenders)
Energy
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** record
Div Yield
5-Yrs Div Growth
MMP
Magellan Midstream Partners L.P.
21
8,12%
3,52%
SGU
Star Group L.P.
10
6,42%
6,75%
PSX
Phillips 66
10
4,40%
5,62%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
MMP
10859
89,6%
0,48
SGU
412
N/A
0,41
PSX
40228
120,5%
0,63
Financial Services
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** record
Div Yield
5-Yrs Div Growth
MAIN
Main Street Capital
12
6,12%
0,96%
NWBI
Northwest Bancshares
12
6,03%
4,56%
HBAN
Huntington Bancshares
11
4,51%
14,14%
WASH
Washington Trust Bancorp
11
4,35%
7,28%
FNF
Fidelity National Financial
10
4,31%
11,97%
PRU
Prudential Financial
13
4,14%
9,86%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
MAIN
3,024
50,9%
0,76
NWBI
1,679
64,7%
0,50
HBAN
19,880
67,1%
1,16
WASH
861
47,6%
0,65
FNF
11,578
19,2%
0,98
UNB
140
N/A
PRU
43,552
23,5%
1,00
Healthcare
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** record
Div Yield
5-Yrs Div Growth
PETS
Petmed Express
13
4,97%
8,45%
HCSG
Healthcare Services Gr
19
4,30%
2,41%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
PETS
506
109,3%
0,51
HCSG
1,417
134,5%
0,62
Industrials
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** Record
Div Yield
5-Yrs Div Growth
HY
Hyster-Yale Materials Handling
10
4,00%
1,29%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
HY
417,7462
N/A
1,21
Real Estate
Number of consecutive years of dividend increases, Yield and Growth
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
Ticker
Market Cap ($M)
Payout Ratio
Beta
ABR
2,758
68,0%
0,78
GTY
1,325
114,4%
0,63
HTA
7,191
291,7%
0,50
Utilities
Number of consecutive years of dividend increases, Yield and Growth
Ticker
Name
Track** record
Div Yield
5-Yrs Div Growth*
AQN
Algonquin Power & Utilities
13
4,45%
1,38%
PNW
Pinnacle West Capital
10
4,42%
5,35%
ALE
Allete
13
4,11%
3,97%
NWE
Northwestern
17
3,98%
3,71%
As of April 22nd 2022, *the 5 year Dividend Growth is annualized; **number of consecutive years that a company has increased its recurring dividend payment
In this post, we will go over Canadian dividend stocks that had the highest dividend growth in the past five years. For each stock, we will discuss the dividend yield, analysts’ recommendations, outlook, and performance.
Please always consult a financial advisor before making any investment decision.
Methodology
Below are the criteria used to select the best Canadian dividend stocks that exhibit growth characteristics:
Have a minimum capitalization of 1 billion dollars;
have recorded revenue growth of at least 10% over the past five years;
offer a minimum dividend yield of 2%;
have recorded a great performance over the past three years.
Dividend growth is a feature highly sought after by investors. It is a sign of the good financial health of a company and of its capacity to grow its performance in a sustained manner. It’s also a great way to reduce the effect of inflation on your investment portfolio.
It is recommended in a dividend portfolio to have a mix of:
– large Canadian dividend stocks with stable dividends and low to moderate growth. Dividend aristocrats are a great place to start. Please click link for full list of Canadian dividend stocks who have earned the title of Dividend Aristocrats; – small and medium-sized businesses that are starting to build a reputation in their industries. These businesses can both generate growth and grow their dividends at attractive rates;
Summary: Canadian dividend stocks for growth
Symbol
Name
Div Yield
5Y Div%
LIF
Labrador Iron Ore Royalty
13.38%
43.10%
GSY
Goeasy
2.89%
39.48%
AEM
Agnico Eagle Mines
2.47%
31.21%
SIS
Savaria
3.12%
17.76%
CNQ
Canadian Natural Resources
3.61%
16.27%
CG
Centerra Gold
2.13%
15.77%
CTC-A
Canadian Tire Corp Cl A NV
2.67%
15.37%
CAS
Cascades
3.82%
14.87%
Source: Barchart as of April 14th – Dividend yield and Dividend Growth in the past 5 years
Labrador Iron Ore Royalty Corporation, through its subsidiary Hollinger-Hanna Limited, owns a 15.10% interest in Iron Ore Company of Canada (IOC) which produces and processes iron ore in Labrador City, Newfoundland -and Labrador. IOC produces iron ore pellets transported by sea; and sells standard and low silica acid, flux and direct reduction pellets, as well as iron ore concentrate.
Labrador Iron is a great company, but analysts believe the stock is currently overvalued. Also, keep in mind that Labrador iron ore is a very cyclical stock, so it is subject to significant ups and downs.
Revenues grew by 19.46% in the past five years which is indicative of the growth potential of LIF.
Symbol
LIF.TO
Name
Labrador Iron Ore Royalty Corp
Last
41.1
Market Cap
2B
Div Yield
13.38%
5Y Rev%
19.46%
5Y Div%
43.10%
52W %Chg
9.08%
3Y %Chg
29.37%
GSY -Goeasy Ltd
goeasy Ltd. provides non-prime leasing and lending services to consumers in Canada. Their consumers typically were rejected by the big banks for low credit rating. The company operates through two segments:
– Easyfinancial: provides unsecured and real estate secured installment loans; personal, home equity, and auto loans…etc
– Easyhome: leases household furniture, appliances, electronics and computers to retail consumers.
Goeasy Ltd business model has benefited from the pandemic for two reasons:
demand for their services increased;
governement subsidies which have skyrocketed during the pandemic reduced the risk of loan losses.
GSY dividend yield is 2.89% at the writing of this post. Their dividend grew by 39.48% in the past five years.
Revenues grew by 18.93% in the past five years which is indicative of the growth potential of Goeasy.
Symbol
GSY.TO
Name
Goeasy Ltd
Last
126
Market Cap
2B
Div Yield
2.89%
5Y Rev%
18.93%
5Y Div%
39.48%
52W %Chg
-8.78%
3Y %Chg
173.20%
Source Bachart as of April 14th
AEM Stock – Agnico Eagle Mines
Agnico Eagle Mines Limited engages in the exploration, development, and production of mineral properties in Canada, Mexico, and Finland.
Summary
Recent merger with Kirkland will improve operational efficiency and result in savings
Recent share repurchases and dividend increases are in favor of shareholders
AEM dividend yield is 2.47% at the writing of this post. Their dividend grew by 31.21% in the past five years.
Symbol
AEM.TO
Name
Agnico Eagle Mines Ltd
Last
83.01
Market Cap
37B
Div Yield
2.47%
5Y Rev%
12.33%
5Y Div%
31.21%
52W %Chg
9.04%
3Y %Chg
53.55%
Source Bachart as of April 14th
SIS – Savaria Corp
Savaria Corporation provides accessibility solutions for the elderly and physically disabled in Canada, the United States, Europe and abroad. The company operates in three segments: accessibility, adapted vehicles and patient care. Savaria Corporation was founded in 1979 and is headquartered in Laval, Canada.
Savaria Copr is a growing company that benefits from several factors:
SIS dividend yield is 3.12% at the writing of this post. Their dividend grew by 17.76% in the past five years.
Revenues grew by 40.73% in the past five years which is indicative of the growth potential of Savaria.
Symbol
SIS.TO
Name
Savaria Corp
Last
16.02
Market Cap
1B
Div Yield
3.12%
5Y Rev%
40.73%
5Y Div%
17.76%
52W %Chg
-8.82%
3Y %Chg
22.57%
Source Bachart as of April 14th
CNQ Stock – Canadian Natural Resources
Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs).
Summary
Large energy holding company
Well managed company
Solid balance sheet
Recent buyback and dividend increases favor shareholders
Should continue to benefit for increased demand for its products
CNQ dividend yield is 3.61% at the writing of this post. Their dividend grew by 16.27% in the past five years.
Revenues grew by 22.31% in the past five years which is indicative of the growth potential of CNQ.
Symbol
CNQ.TO
Name
Canadian Natural Resources Ltd.
Last
83
Market Cap
96B
Div Yield
3.61%
5Y Rev%
22.31%
5Y Div%
16.27%
52W %Chg
111.41%
3Y %Chg
97.90%
Source Bachart as of April 14th
CG Stock – Centerra Gold
Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally.
Summary
The company probably trades at a discount due to its geographic location
CG dividend yield is 2.13% at the writing of this post. Their dividend grew by 31.21% in the past five years.
Symbol
CG.TO
Name
Centerra Gold Inc
Last
13.14
Market Cap
3B
Div Yield
2.13%
5Y Rev%
3.50%
5Y Div%
15.77%
52W %Chg
17.11%
3Y %Chg
86.65%
Source Bachart as of April 14th
CTC-A Stock – Canadian Tire Corp Cl A NV
Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services.
Summary
Did well during the pandemic (outdoor furniture)
Great job with supply chain management
Loyalty program allowed them to increase their cross-selling
Dividends were raised (shareholders friendly)
Weather was in their favor this past winter
CTC-A dividend yield is 2.67% at the writing of this post. Their dividend grew by 15.37% in the past five years.
Symbol
CTC-A.TO
Name
Canadian Tire Corp Cl A NV
Last
185.5
Market Cap
11B
Div Yield
2.67%
5Y Rev%
5.14%
5Y Div%
15.37%
52W %Chg
-2.17%
3Y %Chg
24.04%
Source Bachart as of April 14th
CAS Stock – Cascades
Cascades Inc. produces, converts, and markets packaging and tissue products in Canada and the United States.
Summary
Management is committed to strengthening the balance sheet
Shifting to cleaning tissues was a wise decision by management
Tight margins
CAS dividend yield is 3.82% at the writing of this post. Their dividend grew by 14.87% in the past five years.
Symbol
CAS.TO
Name
Cascades Inc
Last
12.57
Market Cap
1B
Div Yield
3.82%
5Y Rev%
5.96%
5Y Div%
14.87%
52W %Chg
-12.59%
3Y %Chg
58.71%
Source Bachart as of April 14th
Archive:
Manulife Fin
Manulife Financial Corporation, together with its subsidiaries, provides financial products and services in Asia, Canada, the United States and abroad. The company operates through wealth and asset management businesses; Insurance and annuity products; And the Business and Other segments. Manulife Financial Corporation was incorporated in 1887 and is headquartered in Toronto, Canada.
MFC offers a 4.37% dividend yield with 11% growth over the past 5 years. The company’s Asian business segment is doing well and it should also benefit from upcoming interest rate hikes.
Quebecor Inc Cl.B Sv
Quebecor Inc. operates in telecommunications (primarily television distribution, Internet access, business solutions, wired and mobile telephony) and media (over-the-air television networks).
The company has limited expansion plans outside of Quebec, which could affect its long-term growth. Quebecor Inc. was incorporated in 1965 and its head office is located in Montreal, Canada. Its dividend yield is 3.77% and the stock has a very low volatility at 0.32 (Beta over 5 years). Quebecor’s dividends have increased 65% over the past five years, according to Barchart.com.
Restaurant Brands International Inc
Restaurant Brands International Inc. owns, operates and franchises quick service restaurants under the Tim Hortons (TH), Burger King (BK) and Popeyes (PLK) brands. The company was founded in 1954 and is headquartered in Toronto, Canada.
Catering companies were able to survive during the pandemic thanks to delivery services such as Uber-Eats. It can be assumed that lifting all restrictions related to the pandemic can only benefit the QSR title and will increase its profitability in the short term.
ZZZ – Sleep Country Canada
Sleep Country Canada Holdings Inc is engaged in the retail sale of mattresses and bedding products in Canada. As of June 11, 2021, it operated 285 stores. It also sells its products through an e-commerce platform. The company was founded in 1994 and is headquartered in Brampton, Canada.
ZZZ’s revenues have grown by 10% over the past 5 years. During the same period, the company increased its dividends by 24.5%!
The stock has performed well since the start of the year for two reasons:
– excellent financial results despite the pandemic; – the dynamism of the real estate market also seems to have favored mattress sales.
However, some analysts think, at the current price level, the stock is over-priced. Thus they advise waiting for a good buy opportunity. ZZZ specializes in only one segment, which makes it a risky choice.
EFN – Element Fleet Management Corp
Element Fleet Management Corp. operates as a fleet management company in Canada, United States, Mexico, Australia and New Zealand. The company offers fleet management services including vehicle acquisition, financing, program management and several other services.
EFN is a North American leader in fleet management with a capitalization of over $ 5 billion. Its dividend yield rate is 2.50%.
The company offers these customers assistance in managing their vehicle fleets. The experience acquired by the company through its existence allows it to formulate attractive offers in terms of subcontracting thanks to scale savings. Over the past five years, the company’s revenues have grown by 27%. And dividends have increased by 51%.
POW – Power Corp of Canada
Power Corporation of Canada operates as an international management and holding company in North America, Europe and Asia. It operates through three segments: Lifeco, IGM Financial and GBL. The company was incorporated in 1925 and is headquartered in Montreal, Canada. Power Corporation of Canada is a subsidiary of Pansolo Holding Inc.
Power Corp is in good financial shape. Its dividend yield is 4.9% and the 5-year dividend growth was 12%. The insurance segment (through its subsidiary: Great West) should benefit from the upcoming interest hikes.
In this post we will review the 10 best performing ETFs in Canada in 2022 and the Top 10 worst performers. We limited ourselves to ETFs that have asset under management (AUM) above 100 millions dollars. ETFs with low AUM tend to be less liquid and cost more when trading because of the spread (the difference between the bid and ask price) is often high.
Source barchart as of April 18th 2022 – worst performing ETFs in Canada
In this post, we will be presenting 5 high dividend stocks. These stocks offer a very attractive yield while having an acceptable level of debt and growing revenues. The purpose here is to select businesses that are likely to continue paying dividends in the near and medium future.
Please do your own research or consult with a tax professional or investment advisor before making any financial decisions.
Methodology
–Growing revenues: Growth in revenues is necessary to keep any a business a float. It’s even more important for businesses that are expected to pay dividends;
–Low Price/Cash Flow: This ratio is the relationship between the price and the cash available per share. A low ratio indicates the company has enough cash flow to justify its current prices. A ratio below 15 is considered low.
–High dividend yield;
–Low Debt to Equity ratio: This ratio is a measure of how much debt the company contracted versus its own equity. Viable dividend stocks should always have a low level of debt.
–High interest coverage: This ratio measures how much a company is paying to service its debt versus its earnings. A business that spends most of its earnings on paying interests in loans is not a good choice for dividend investors.
–Low Dividend Payout Ratio: This ratio is the relationship between dividends and earnings. Companies that offer safe dividends usually have a low ratio.
MPLX LP owns and operates midstream energy infrastructure and logistics assets primarily in the United States.
Segments: Logistics and Storage (crude oil and refined petroleum products) and Gathering and Processing (natural gas and natural gas liquids).
+ MPLX offers an attractive yield (over 8%);
+ Over the past year, the stock rose 31.52%. It’s important to check for historical performance, often, high dividend yield is caused by depression in the stock price;
+ Low Price/Cash Flow ratio is a good sign!
– The debt ratio (1.51) is bit high but the Interest coverage ratio is acceptable at 4.97;
+ The company continue to grow its revenues through organic growth and acquisitions;
– Strong balance sheet.
Symbol
MPLX
Name
Mplx LP
Market Cap, $B
33
Div Yield
8.61%
Div Payout%
111.19%
5Y Rev%
287.14%
Price/Cash Flow
7.53
Debt/Equity
1.51
Int Cov
4.97
52W %Chg
31.14%
As of March 24th, Source: Barchart / High Dividend Stocks
Magellan Midstream Partners LP (MMP)
Magellan Midstream Partners is a Master Limited Partnership, or MLP. The company has the longest pipeline system of refined products.
+ MMP has a fee-based model (90% of its revenues). The stock price movement is not related to commodity prices;
+ MMP offers an attractive yield at 8%;
+ The dividend payout ratio is low at 87.04%. The company pays dividends and has room to invest in its growth;
+ High debt ratio at 2.67; the interest coverage ratio is at 5.13 which is acceptable;
+ Revenues have grown in the past 5 years by 23.93%.
Symbol
MMP
Name
Magellan Midstream Partners LP
Market Cap, $B
10,5
Div Yield
8.53%
Div Payout%
87.04%
5Y Rev%
23.93%
Price/Cash Flow
8.05
Debt/Equity
2.67
Int Cov
5.13
52W %Chg
16.33%
As of March 24th, Source: Barchart / High Dividend Stocks
Enterprise Products Partners LP (EPD)
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products.
+ Recent acquisition of Navitas Midstream for $3.25B in January. (additional 1,750 miles of pipelines to their existing portfolio);
+ EPD offers an attractive yield at 7.58%;
+ The dividend payout ratio is low at 81.19%. The company pays dividends and has room to invest in its growth;
+ A low price to Cash Flow ratio
+ Low debt ratio at 1.08; the interest coverage ratio is at 4.76 which is acceptable;
+ Revenues have grown in the past 5 years by 77% thanks to both organic growth and acquisitions.
Symbol
EPD
Name
Enterprise Products Partners LP
Market Cap, $BK
54,3
Div Yield
7.58%
Div Payout%
81.19%
5Y Rev%
77.25%
Price/Cash Flow
7.64
Debt/Equity
1.08
Int Cov
4.76
52W %Chg
11.11%
As of March 24th, Source: Barchart / High Dividend Stocks
Altria Group (MO)
Altria Group sells the Marlboro cigarette brand in the U.S. and a number of other non-smokeable brands, including Skoal and Copenhagen.
+The flagship brand continues to be Marlboro, which commands over 40% retail market share in the U.S.
+ Offers an attractive dividend at 6.75%. The dividend is relatively safe considering the company’s dividend payout ratio is 75.97%;
– Growth opportunities are limited for Altria (highly regulated industry);
+ Altria is a dividend king with over 50 years of dividend increases;
+ Company continues its expansion with a large stake in Juul (Vaping products manufacturer). In addition, the company has 10% stake in global beer giant Anheuser-Busch InBev
Symbol
MO
Name
Altria Group
Market Cap, $B
96,7
Div Yield
6.75%
Div Payout%
75.97%
5Y Rev%
1.04%
Price/Cash Flow
11.19
Debt/Equity
N/A
Int Cov
4.29
52W %Chg
5.38%
As of March 24th, Source: Barchart / High Dividend Stocks
Ares Capital Corp (ARCC)
Ares Capital Corporation is a business development company. The company specializes in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies.
+ Healthy and diversified portfolio of investments;
+ High dividend yield at 8%;
+ Dividend payout ratio at 83.65%;
+ Revenues have grown in the past 5 years by 79% thanks to both organic growth and acquisitions.
– The interest coverage is low which poses a risk for dividend payments;
Symbol
ARCC
Name
Ares Capital Corp
Market Cap, $B
10
Div Yield
8.08%
Div Payout%
83.65%
5Y Rev%
79.84%
Price/Cash Flow
12.41
Debt/Equity
1.17
Int Cov
3.07
52W %Chg
13.14%
As of March 24th, Source: Barchart / High Dividend Stocks
In this post, we will be comparing major Canadian Banks. The comparison will include historical performance, Growth metrics, and Valuation. Then, we will pick the TOP 3 Best Canadian Bank Dividend Stocks! Our top 3 includes National Bank, TD, and Royal Bank.
Please consult a financial advisor before making any financial decision.
Historical performance
Name
YTD %Chg
52W %Chg
3Y %Chg
National Bank (NA)
+3.81%
+21.92%
+63.33%
Cibc (CM)
+8.40%
+31.87%
+43.26%
Royal Bank (RY)
+3.58%
+26.69%
+33.79%
Bank of Montreal (BMO)
+8.45%
+37.63%
+43.58%
Toronto-Dominion (TD)
+1.30%
+24.48%
+35.63%
BNS (BNS)
+4.77%
+21.88%
+28.98%
Barchart.com as of March 3rd – Best Canadian Bank Dividend Stocks
Growth metrics
Symbol
5Y Div%
5Y Earn%
5Y Rev%
NA.TO
5.43%
22.19%
8.14%
CM.TO
4.22%
5.42%
6.69%
RY.TO
5.92%
10.28%
5.67%
BMO.TO
4.51%
10.85%
5.14%
TD.TO
7.91%
10.58%
4.45%
BNS.TO
4.56%
5.94%
3.50%
Barchart.com as of March 3rd – Best Canadian Bank Dividend Stocks
Valuation and Dividends
Symbol
ROE%
P/E (ttm)
Div yld
NA.TO
19.91%
10.64
3.46
CM.TO
16.07%
11.12
4.02
RY.TO
18.28%
12.44
3.49
BMO.TO
14.20%
12.75
3.60
TD.TO
15.27%
13.15
3.51
BNS.TO
14.72%
12.10
4.29
Barchart.com as of March 3rd – Best Canadian Bank Dividend Stocks
– Cross-border diversification. TD continues to expand in the US market. The latest trend is the announcement of a merger agreement that will unite TD and First Horizon. The deal will still need to obtain approval from US regulators. Following this merger, TD will be the sixth-largest bank in the US!
– Cost synergies expected from TD and Fisrt Horizon merger;
– Gorwth opportunities in the US retail market;
– 10 consecutive years of dividend increases.
Weaknesses:
– TD’s premium leisure and travel-oriented credit card business has been weak during the pandemic;
– The pandemic negatively impacted the growth in both personal and business lowns segments;
– Competition from both large banks and fintech companies.
– National Bank’s return on equity is the highest among the six largest banks in Canada;
– Revenues grew by 8% in the past five years;
– Reported stellar financial results in Q1 fiscal 2022;
– Strong wealth management segment;
– 11 consecutive years of dividend increases.
Weaknesses:
– Most revenues are from Quebec (74%), which makes NA less diversified than competition;
– Competition from both large banks and fintech companies.
In this post, we will go over the highest dividend-paying stocks among US Dividend Aristocrats stocks. The S&P 500 Dividend aristocrat list includes businesses that have proven themselves as the best dividend-paying stocks in the US. These stocks have at least a 25 years track record of paying and increasing their dividends. They are a solid choice to counter the impact of inflation and protect your portfolio during turbulent times. On top of the list, we have IBM, Exxon, Realty income, Leggett & Platt, and Chevron. For each stock, we will provide historical performance and growth indicators.
At the end of this post, you will access the complete list of the 30 highest dividend-paying stocks.
Why invest in US dividend aristocrats stocks?
If you are asking yourself, what is the typical profile of a dividend aristocrat stock? I have listed some common characteristics below:
Dividend aristocrats tend to dominate their industry
• The vast majority are companies that are well established in their sector. They manage to generate significant profits thanks to their comfortable position against the competition. They also sometimes operate in regulated markets such as electric utilities with almost no competition;
Safe heaven during turbulent times
• “Dividend aristocrats” are sometimes considered by the financial market as safe havens in the event of a market correction or decline. Indeed, dividend aristocrats are generally less volatile than the market, and there are less targeted by speculators;
Strong financial statements
• “Dividend aristocrats” will tend to have a better financial situation in terms of liquidity than the rest of the market. Their levels of liquidity or debt are generally better than the rest of the market;
Limited growth but there are exceptions
• In general, dividend aristocrats are mature businesses. That is, the growth potential is quite limited. However, some companies can pay dividends and invest in their growth. Usually, the dividend payout ratio is a good indicator. If the rate is low, it means the business is saving some money to grow. Business with high dividend pay out ratio have no financial resources left to grow.
Dividend yield and Consecutive years of dividend growth
Ticker and name
Div yld
Yrs Div Growth
IBM -International Business Machines
5,3%
26
XOM -Exxon Mobil
4,6%
39
O -Realty Income
4,4%
26
LEG -Leggett & Platt
4,4%
50
CVX -Chevron
4,3%
35
WBA -Walgreens Boots Alliance
4,1%
46
MMM -3M Co.
4,0%
64
As of February 22nd, *Consecutive Years of Dividend Growth – Highest dividend paying stocks US
Growth indicators – Highest dividend paying stocks US
Revenue and dividend growth are important indicators. Dividend growth is 1- a sign of a company’s good financial health and 2- an excellent way for shareholders to hedge against the risks of inflation. Revenue growth is an indicator that the company continues to grow its operations and create value.
Ticker
5yrs Div Growth
5yrs Rev Growth
IBM
122.73
-28.24
XOM
17.11
26.34
O
22.81
61.40
LEG
26.98
9.27
CVX
23.78
41.93
WBA
28.77
12.92
MMM
33.33
17.42
Dividend and Revenues growth over the past 5 years – Source: Barchart – Highest dividend paying stocks US
Historical performance – Highest dividend paying stocks US
Ticker
1yr Perf
3yrs Perf
Beta
IBM
1.11
-10.98
0,47
XOM
39.40
-4.43
0,73
O
5.34
-4.48
0,62
LEG
-16.15
-20.49
1,01
CVX
35.74
8.50
0,64
WBA
-5.79
-31.26
0,76
MMM
-17.95
-29.27
0,52
Price performance (cumulative), Beta is a measure of volatility – Highest dividend paying stocks US
1-International Business Machines (IBM)
IBM is a global information technology company that provides integrated enterprise solutions for software, hardware, and services. The company has five business segments: Cloud & Cognitive Software, Global Business Services, Global Technology Services, Systems, and Global Financing.
IBM sees the hybrid cloud as its biggest opportunity to return to growth in the future. IBM plans to accelerate customer adoption of hybrid cloud and AI.
IBM strategy for growth; Source: Investor’s presentation
2-Exxon Mobil Corp (XOM)
Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States and around the world.
XOM has recorded great financial results lately and seemed set to create more value and growth for its shareholders. The company is generating growing cash flows which will allow maintaining its dividend payments. The primary risk remains pressure from climate militants.
Cash flow from oprations 2019-2027 – Source: Investors presentation
3-Realty Income Corp.
Realty income is a retail-focused real estate investment trust that has paid and increased its dividends in the past 26 years. The company pays a monthly dividend.
50% of Realty income corp comes from quality tenants. The company has successfully reduced its dependence on restaurants, favoring convenience stores and grocery stores.
Industry diversification – Investors presentation
4- Leggett & Platt, Inc. (LEG)
Leggett & Platt designs and manufactures a wide range of products including bedding components, machinery for the bedding industry, steel wire, adjustable beds, carpet padding and seat support systems from vehicle.
Thanks to its diversified products offering, LEG has a definite competitive advantage. Add to this its diversified geographic presence. The company ensures its growth through both organic means and acquisitions.
LEG is a dividend King with 50 years of historical dividend payments and increases.
Source: Leggett & Platt, Inc. annual report
5- Chevron Corp (CVX)
Chevron Corporation, through its subsidiaries, engages in integrated energy, chemical and petroleum operations worldwide.
Chevron is one of the highest-rated oil producers with a rating of AA-. It has a 35 years track record of increasing its dividends. CVX revenues grew by 41% over the past five years.
L’évolution des dividendes de CVX en comparaison avec ses concurents – Source: présentation aux investisseurs
Top 30 Highest dividend paying stocks US (Dividend Aristocrats)
Name
Div Yld
Yrs Div Growth
IBM -International Business Machines
5,3%
26
XOM -Exxon Mobil
4,6%
39
O -Realty Income
4,4%
26
LEG -Leggett & Platt
4,4%
50
CVX -Chevron Corp.
4,3%
35
WBA -Walgreens Boots Alliance
4,1%
46
MMM -3M Co.
4,0%
64
AMCR -Amcor Plc
4,0%
1
ABBV -Abbvie Inc
3,9%
50
BEN -Franklin Resources, Inc.
3,8%
42
ED -Consolidated Edison, Inc.
3,7%
48
FRT -Federal Realty Investment Trust.
3,6%
54
CAH -Cardinal Health
3,6%
34
PBCT -People`s United Financial
3,5%
29
KMB -Kimberly-Clark
3,5%
50
VFC -VF Corp.
3,4%
49
TROW -T. Rowe Price Group
3,3%
36
CLX -Clorox
3,1%
44
GPC -Genuine Parts
2,8%
66
KO -Coca-Cola Co
2,8%
60
PEP -PepsiCo Inc
2,7%
50
APD -Air Products & Chemicals
2,7%
40
ESS -Essex Property Trust
2,7%
27
JNJ -Johnson & Johnson
2,6%
59
ATO -Atmos Energy
2,6%
38
AFL -Aflac Inc.
2,5%
40
MDT -Medtronic Plc
2,5%
44
CAT -Caterpillar Inc.
2,3%
28
NEE -NextEra Energy
2,3%
27
CL -Colgate-Palmolive
2,3%
59
ITW -Illinois Tool Works
2,3%
58
As of February 22nd, *Consecutive Years of Dividend Growth – Highest dividend paying stocks US
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In this post, we will review seven stocks that offer both safe and growing dividend yields. We used several criteria. First, we examined the historical track record of paying and increasing dividends. Second, we assess the capacity for these companies to sustain their dividends. As you will see below, stocks in the banking industry dominate the list.
Methodology
See below the criteria’s used to select the best dividend stocks to buy now:
At least 10 years of consecutive dividend increases;
Investing in dividend paying stocks is a strategy that appeals to young and old investors. Here is a quick reminder of the main concepts to keep in mind before applying this strategy:
Investment horizon: 5 years or more minimum. The strategy of investing in dividend paying stocks is not suitable for an investor with a short term horizon (less than 5 years).
Objective: The strategy can help you build passive income or further grow your capital by reinvesting the dividends received.
Risk Tolerance: Medium (provided you restrict yourself to selecting quality securities and having a diversified portfolio across several sectors).
Best dividend stocks to buy now for safety and growth
Ticker / Name
Div Yield
Years of Dividend Increases
PRU -Prudential Financial
3.95
13
WASH -Washington Trust Bancorp, Inc.
3.64
11
PFG -Principal Financial Group Inc
3.34
15
BEN -Franklin Resources, Inc.
3.32
42
UGI -UGI Corp.
3.01
34
WEC -WEC Energy Group
2.79
18
KEY -Keycorp
2.92
11
Source: Barchart, January 14th, Best dividend stocks to buy for safety and growth
Prudential Financial, Inc. is one of the world’s leading providers of financial services. The company offers a wide range of financial products and services. They are known for life insurance, retirement-related services, annuities, mutual funds, investment management and real estate services.
Prudential offers an attractive dividend yield of 3.95%. The payout ratio is low at 24.58%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
The company increased its dividend every year in the past 13 years.
Prudential is a large cap with over 44 Billion dollars in assets. The stock is as volatile as the market with a Beta of 1.06. In addition to paying generous dividends, the stock performance was also attractive.
Ticker
PRU
Name
Prudential Financial Inc.
Sector
Financial Services
Dividend Yield
3.95
Years of Dividend Increases
13
1-Year Dividend Growth
4.55%
5-Year Dividend Growth (Annualized)
8.92%
Market Cap ($M)
44,006
Payout Ratio
24.58%
Beta
1.06
One Year Price Return
48.37%
Two Year Price Return
36.55%
Five Year Price Return
32.64%
Best dividend stocks to buy for safety and growth
WASH – Washington Trust Bancorp, Inc.
Washington Trust Bancorp, Inc. engages in the provision of financial services. It operates through the following segments:
Commercial Banking ;
Wealth Management Services.
The company was founded in 1984 and is headquartered in Westerly, RI.
Washington Trust offers an attractive dividend yield of 3.64%. The company increased its dividend every year in the past 11 years.
The payout ratio is low at 48.14%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
WASH is a mid cap with over 1 Billion dollars in assets. The stock is less volatile than the market with a Beta of 0.80. In addition to paying generous dividends, the stock performance was also attractive.
Ticker
WASH
Name
Washington Trust Bancorp, Inc.
Sector
Financial Services
Dividend Yield
3.64%
Years of Dividend Increases
11
1-Year Dividend Growth
3.85%
5-Year Dividend Growth Annualized
7.28%
Market Cap ($M)
1,032
Payout Ratio
48.14%
Beta
0.80
One Year Price Return
31.30%
Two Year Price Return
25.14%
Five Year Price Return
36.24%
Best dividend stocks to buy for safety and growth
PFG – Principal Financial Group Inc
Principal Financial Group, Inc. is a financial company. It specializes in retirement solutions, insurance, and investment products through its diverse family of financial services companies and national network of financial professionals.
Principal Financial offers a interesting dividend yield of 3.34%. The company increased its dividend every year in the past fifteen years!
The payout ratio is low at 38.65%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
PFG is a large cap with over 20 Billion dollars in assets. The stock is more volatile than the market with a Beta of 1.26. In addition to paying generous dividends, the stock performance was very attractive. PFG had a price return of over 50% just in the past year.
Ticker
PFG
Name
Principal Financial Group Inc
Sector
Financial Services
Dividend Yield
3.34%
Years of Dividend Increases
15
1-Year Dividend Growth
14.29%
5-Year Dividend Growth Annualized
6.83%
Market Cap ($M)
20,299
Payout Ratio
38.65%
Beta
1.26
One Year Price Return
50.85%
Two Year Price Return
49.09%
Five Year Price Return
57.70%
Best dividend stocks to buy for safety and growth
BEN – Franklin Resources, Inc.
Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships.
Franklin Resources offers a interesting dividend yield of 3.32%. The company is a dividend aristocrat with a solid record of increasing its dividends (42 years in a row).
The payout ratio is low at 15%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
BEN is a large cap with over 17 Billion dollars in assets. The stock is more volatile than the market with a Beta of 1.51. In addition to paying generous dividends, the stock performance was very attractive. BEN had a price return of over 36.86% just in the past year.
Ticker
BEN
Name
Franklin Resources, Inc.
Sector
Financial Services
Dividend Yield
3.32%
Years of Dividend Increases
42
1-Year Dividend Growth
3.57%
5-Year Dividend Growth Annualized
7.71%
Market Cap ($M)
17,553
Payout Ratio
15.60%
Beta
1.51
One Year Price Return
36.86%
Two Year Price Return
49.68%
Five Year Price Return
10.71%
Best dividend stocks to buy for safety and growth
UGI – UGI Corp.
UGI Corp. operates as a holding company that engages in the distribution, storage, transport, and marketing of energy products and services. It operates through the following segments: AmeriGas Propane; UGI International; Midstream and Marketing; and UGI Utilities.
UGI offers a interesting dividend yield of 3.06%. The company is a dividend aristocrat with a solid record of increasing its dividends (34 years in a row).
The payout ratio is low at 9.7%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
UGI is a large cap with over 9 Billion dollars in assets. The stock is less volatile than the market with a Beta of 0.60. In addition to paying generous dividends, the stock performance was very attractive. UGI had a price return of over 28.69% just in the past year.
Ticker
UGI
Name
UGI Corp.
Sector
Utilities
Dividend Yield
3.06%
Years of Dividend Increases
34
1-Year Dividend Growth
4.55%
5-Year Dividend Growth Annualized
7.75%
Market Cap ($M)
9,584
Payout Ratio
9.76%
Beta
0.60
One Year Price Return
28.69%
Two Year Price Return
10.94%
Five Year Price Return
13.17%
Best dividend stocks to buy for safety and growth
WEC – WEC Energy Group Inc
WEC Energy Group, Inc. is a holding company, which engages in the generation and distribution of electricity and natural gas.
WEC offers a interesting dividend yield of 2.99%. The company has a solid record of increasing its dividends (18 years in a row).
The payout ratio is low at 64%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
WEC is a large cap with over 9 Billion dollars in assets. The stock is less volatile than the market with a Beta of 0.14. In addition to paying generous dividends, the stock performance was very attractive. WEC had a price return of over 14% just in the past year.
Ticker
WEC
Name
WEC Energy Group Inc
Sector
Utilities
Dividend Yield
2.99%
Years of Dividend Increases
18
1-Year Dividend Growth
7.11%
5-Year Dividend Growth Annualized
5.43%
Market Cap ($M)
30,685
Payout Ratio
64.43%
Beta
0.14
One Year Price Return
14.06%
Two Year Price Return
9.91%
Five Year Price Return
92.91%
Best dividend stocks to buy for safety and growth
KEY – Keycorp
KeyCorp operates as bank holding company, which engages in the provision of financial services. it provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance, student loan refinancing, commercial mortgage servicing and special servicing, and investment banking products and services to individual, corporate, and institutional clients.
KEY offers a interesting dividend yield of 2.92%. The company has a solid record of increasing its dividends (11 years in a row).
The payout ratio is low at 29%, which means it’s sustainable in the future. Some companies offer higher dividend yields but their payout ratio often exceeds 100%. This means that they are paying in dividends more than their reported income. Obviously, a high payout ratio means that sooner or later the company will have to make a cut. Furthermore, a company that distributes most of its reported income as dividends does not invest in its future.
KEY is a large cap with over 24 Billion dollars in assets. The stock is more volatile than the market with a Beta of 1.15. In addition to paying generous dividends, the stock performance was very attractive. WEC had a price return of over 47% just in the past year.
Ticker
KEY
Name
Keycorp
Sector
Financial Services
Dividend Yield
2.92%
Years of Dividend Increases
11
1-Year Dividend Growth
5.41%
5-Year Dividend Growth Annualized
18.07%
Market Cap ($M)
24,859
Payout Ratio
29.04%
Beta
1.15
One Year Price Return
47.11%
Two Year Price Return
49.64%
Five Year Price Return
71.78%
Best dividend stocks to buy for safety and growth
Reasons behind the strength of banking stocks
News of faster economic growth than anticipated seem to favor the banking sector. Here we need to distinguish between two trends: large Banks and small-mid regional banks.
Large banks benefited from:
Trading: revenues are soaring from an exceptional year. Retail investors were abnormally active and trading much more than usual which increased commissions’ revenues for Banks;
Releasing large sums of money that were held in reserves to hedge against expected loan losses due to pandemic. These losses never materialized.
Small and regional Banks
Regional banks did not benefit from the increase witnessed in trading activities or investment banking. See below some factors that are pushing some investors to be bullish:
Loan growth should improve because most if not all covid-related support will cease in the second half of the year;
Rising interest rates is usually favorable for both attracting new deposits and providing high yielding loans;
Consumer spending is picking up and is expected to reach pre-pandemic levels before year end. This will benefit traditional baking segments;
Mergers and acquisitions rumors’ surrounding some attractively valued US regional banks.
