Let me take one guess as to why you’re here: Big yields.
Without knowing your financial situation, what your portfolio looks like, or what your overall investing goals are, I might guess that if you’re like many investors, you’ve made money – and lost money – on high-flying tech stocks over the past several years. These days, you wouldn’t mind “de-risking’ a bit with dividend (i.e., cash flow) streams paid by financially solid companies.
That’s reasonable, and I’m with you – and I’ve got some starting-point ideas for you below.
In fact, I’m more than with you: For 10 years I ran Motley Fool Income Investor, which at the time was likely the largest dividend research service in the world.
Spades of research supports dividend stocks. For just one example, Ned Davis Research and Hartford Funds looked at stocks from 1973 to 2021 and found that dividend non-payers would have turned $100 into $989 during that time.
And for dividend payers? Nearly 10 times higher, at $8,972. Meanwhile, dividend-paying stocks that grew or initiated dividends would have turned $100 into a whopping $14,405.
Stop to take that in: $100 into $989 – or $100 into $14,405. That’s the power of dividend stocks.
These days, I’m the Chief Investment Officer of BBAE, a digital investment platform. But I still love dividends.
Besides free trades, which many of the brokerage platforms now offer, one thing BBAE has is groups of curated investment ideas.
If you’re a pro, you may not need this, except as a curiosity. But if you’re a new or intermediate or even advanced investor, BBAE’s “Discover” section, as we call it, can be a quick way to get up to speed on the stocks associated with numerous investing “themes” like dividends, China, regional banks, etc., or even famous investor portfolios (Warren Buffett, Charlie Munger, Stan Druckenmiller, etc.).
For this article, I pulled 15 names from BBAE’s “5/15/15” dividend stock theme in Discover. The criteria explain the name:
- 5% yield or more
- 15% return on equity (ROE) or higher
- 15x price to earnings (P/E) ratio or lower.
This is a list. These dividend stocks aren’t recommendations, to be clear; they’re results from a screen. Not only do many of the screen results skew toward natural resource companies (at least at this moment), but screeners generally use historical yield, which may not always represent future yield, especially for a company that once paid a big yield but whose stock has dropped owing to a rockier financial situation that makes maintaining a high dividend unlikely. Some results may be master limited partnerships (MLPs), business development companies (BDCs), royalty trusts, or other high yielders that may have unique or unintuitive tax consequences and for whom GAAP net income (which feeds P/E and ROE) may not be the best income measure. There’s no need to fear these investments, really, but you should understand how they work before plunking any money down.
So do your own homework beyond any lists. But lists like this could still make good starting points for further research. (Data from finviz.com)
|Company||Yield (9/1/2023)||ROE||P/E||Market Cap|
|BHP (BHP)||5.8%||59%||8.1||$151 billion|
|Verizon (VZ)||7.5%||23%||7.0||$147 billion|
|Rio Tinto (RIO)||10.5%||17%||12||$107 billion|
|Equinor (EQNR)||10.8%||47%||4.1||$95 billion|
|Petrobras (PBR)||24.3%||42%||2.9||$91 billion|
|Vale (VALE)||5.8%||31%||5.3||$63 billion|
|Enterprise Products Partners (EPD)||7.5%||20%||10.8||$58 billion|
|Pioneer Natural Resources (PXD)||6.9%||26%||10.3||$56 billion|
|National Grid (NGG)||5.4%||31%||13.5||$46 billion|
|Ambev (ABEV)||5.2%||17%||14.9||$44 billion|
|MPLX (MPLX)||8.9%||34%||8.8||$35 billion|
|Devon Energy (DVN)||9.4%||43%||7.3||$33 billion|
|ONEOK (OKE)||5.8%||36%||12||$29 billion|
|Ecopetrol (EC)||14%||33%||3.8||$24 billion|
|Coterra Energy (CTRA)||5.8%||25%||7.2||$22 billion|
If you’d like to go beyond this starting point – or to see similar results from man other thematic stock lists – I encourage you to either register a BBAE account here or simply check out my free report: 5 Secrets to Dividend Investing by signing up below.
This article is for informational purposes only and is neither investment advice nor a solicitation to buy or sell securities. Investing carries inherent risks. Always conduct thorough research or consult with a financial expert before making any investment decisions. Neither the author nor BBAE has a position in any investment mentioned.