These three high-dividend stocks reward long-term shareholders with robust cash payments.
Barclays (BCS): Increasing interest rates should be beneficial to the U.K. banking giant.
Southern Copper (SCCO): Here’s a high-dividend stock that is also a commodity play.
Verizon Communications (VZ): The communications giant creates ample cash that could mean consistent dividends.
stock market ticker screen with the word "dividends" appearing in large text
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High-dividend stocks are getting increased attention in May. As the volatility on Wall Street continues, investors search for stocks that have ongoing safe yields. Understandably, the long-term growth potential of robust dividend shares could be another benefit to investing in these names. Markets have been on the edge in recent days, waiting for the results of the most recent Federal Open Market Committee (FOMC) meeting. Analysts and investors alike scratch their heads as they look at headlines and uncertainties in the market now.
High inflation, rising interest rates, and the Federal Reserve’s belt tightening policies are making it hard for investors to hit the ‘buy’ button on many shares. Pandemic fears are fading away only to be replaced by geopolitical crises and supply issues.
Yet, seasoned investors realize that it is never only doom and gloom, especially when it comes to long-term investing. For instance, exchange-traded funds (ETFs) that focus on high dividends have seen inflows. So far in the year, the iShares Core High Dividend ETF (NYSEARCA:HDV) is up by 4.2% and the SPDR Portfolio S&P 500 High Dividend ETF (NYSEARCA:SPYD) is up by 3.14% year-to-date (YTD). These returns may suggest that high-dividend stocks can be a safe harbor for the stock investor.
Similarly, the S&P 500 High Dividend Index has returned over 6.58% over the past year and 4.1% YTD. This performance is way ahead of the S&P 500 Index, which has lost 12.9% since January and is roughly flat in the past year.
The first high-dividend stock on my list is the U.K. banking giant Barclays (NYSE:BCS). Its global product and service offerings cover a wide range of financial services.
Barclays releasedfirst quarter (Q1) results on Apr. 28. Revenue came in at 6.5 billion pounds with year-over-year (YOY) growth of 10%. Attributable profit, or profit owed to shareholders, was 1.4 billion pounds, or 8.4 pence per share. The number implied a drop of 18% from 1.7 billion pounds and 9.9 pence per share achieved in the prior-year quarter.
I should note that this leading financial player has recently been making the headlines for the wrong reasons. For example, in late 2021, Jes Staley, the bank’s previous chief executive officer, left his post “following an investigation by regulators into his dealings with the disgraced financier Jeffrey Epstein.”
Then in March, the company admitted it had sold too many structured notes and overshot a limit placed on it by U.S. regulators. And more recently, the bank stopped selling its iPath exchange-traded notes (ETNs). The suspension concerns about 30 ETNs and reminds investors how these assets are different than traditional exchange-traded funds (ETFs).
BCS stock has gone down around 28% YTD and 24% over a 12-month period. As a result, it currently generates a dividend yield of 4.1%. The price-to-earnings (PE) ratio is at4x and the stock is selling for 1.1 times trailing sales. Finally, the 12-month median price forecast for Barclays stands at $11.48.
Southern Copper (SCCO)
Southern Copper Corporation logo on a phone screen in front of the logo on a computer screen. SCCO stock.
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Next up on our list of high-dividend stocks is Southern Copper (NYSE:SCCO), one of the leading copper miners in the world. Its operations are mainly in Peru and Mexico.
SCCO issued Q4 2021 results on Feb. 2. Revenue came in at $2.8 billion, up 20% YOY. Net income was $833 million, 37% better than Q4 FY20. Income hit $1.08 per share. Cash and equivalents ended the quarter at $3 billion.
Although its copper production dropped 8.5% YOY, the increase in copper prices propelled record revenue. Income fared well with reduction in costs thanks to efficiency measures.
Management is expecting better performance over the coming years due to a positive environment for copper prices. New projects in Peru and Mexico are already underway to confirm these expectations.
SCCO stock is up .86% YTD, but down around 15% in the past year. Shares are changing hands at4.4 times trailing sales. The current dividend yield is 7.99%. At present, the 12-month median price forecast for Southern Copper stands at $62.
High-Dividend Stocks to Buy: Verizon Communications (VZ)
Verizon (VZ) Wireless sign and trademark logo.
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Our final high-dividend stock is Verizon Communications (NYSE:VZ). Millions of Americans rely on this communications giant for its wireless and wired broadband networks. Ranking as the second largest telecom service provider stateside, the company continues to generate stable income.
Verizon reportedQ1 results on April 22. Revenue grew 2.1% year-over-year to $33.6 billion. Net income came in at $4.7 billion, or $1.09 in earnings per share. Cash and equivalents ended the quarter at $1.7 billion compared to $2.9 billion for the previous quarter.
Management forecasts revenue from service and other products to be flat in 2022. According to Grand View Research, the global telecom services market isexpected to grow at a compound annual growth rate (CAGR) of close to 5.4% within the 2021 to 2028 period. Therefore, we can expect Verizon stock to generate reliable levels of cash in the years ahead, as well.
VZ stock is down 13.4% YTD and 17.9% over the past 12-month period. The current price supports a dividend yield of 5.35%.
As a result of the recent decline, shares now offer better value. They are trading at9.3 times forward earnings and 1.5 times trailing sales. Meanwhile, the 12-month median price forecast for Verizon stands at $57.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
