7 High Yielding Dividend Stocks For All Income Lovers
With the market rocked by the collision of various negative events, it’s time to get all you can out of the market with some high yielding dividend stocks to buy. Essentially, expecting growth-oriented names to generate solid capital gains could be a mistake in this ecosystem. Instead, your attention should be directed to businesses that have the revenue to support passive income.
To be fair, after the ridiculous performance the equities sector has put in in 2020 and 2021, the thought of switching to high-yielding dividend stocks to buy might be a little underwhelming. While passive income is always a plus, it’s much sexier to see your portfolio grow by 100% or 200%. I understand. At the same time, the convergence of inflation, geopolitical tensions and eroding consumer sentiment is enough to justify a pivot.
For example, if the economy were to fall into a recession as many analysts fear, companies that deliver steady returns tend to perform better than strictly growth-oriented organizations. In this case, we’ll explore high-yield dividend-balanced stocks; i.e. businesses that provide you with solid income with relevant revenue streams.
|LYB||LyondellBasell Industries NV||$89.73|
|ENO||North West Society||$54.58|
|PM||Philip Morris International Inc.||$97.95|
High Yield Dividend Stock: Phillips 66 (PSX)
While the hydrocarbon sector continues to be the bane of security analysts who have long called for the removal of dependencies on warring nations, the overriding reality is that fossil fuels generate enormous energy density. Basically, with one gallon of gasoline, modern combustion engine technology allows a two-ton SUV to go 20 or 30 miles on the highway.
Until this is no longer the case, it’s a safe bet that Phillips 66 (NYSE:PSX) is one of the best high yielding dividend stocks to buy. Focused primarily on the midstream and downstream aspects of the oil industry, Phillips 66 is a critical player in our transportation infrastructure. Even with growing demand for clean and sustainable energy alternatives, such a transition will take time.
Like it or not, PSX is not relevant a decade or even a year from now, but today. Buoyed by a strong performance in the first quarter of 2022 – a highlight being net income of $582 million – PSX is poised to be one of the high-yielding, dividend-bearing sustainable stocks to buy.
A common theme when evaluating which high-yielding dividend stocks to buy — reasonable names, not junk trades — is that they tend to be boring. A concrete example is that of the applied sciences and the industrial giant 3M (NYSE:MMM). Acquiring a rather glaring spotlight in 2020 due to its manufacturing of N95 respirators amid the coronavirus pandemic, 3M has gone relatively quiet.
Unfortunately, its low profile hasn’t prevented MMM stock from losing 24% year-to-date. However, with the company leveraging a massive global footprint – we’re talking over 60,000 products spanning various industries and applications – 3M is unlikely to be out of the picture anytime soon.
In all honesty, sometimes being a jack-of-all-trades can be less than ideal commercially. Yet 3M is one of the most undervalued names among high yielding dividend stocks to buy on a basket of valuation metrics. Additionally, the company has consistently strong free cash flow, making it an attractive name when it comes to discounting.
As one of the world’s largest companies in the plastics, chemicals and refining industries, LyondellBasell (NYSE:LYB) is involved in a variety of applications, ranging from advanced polymer solutions to crude oil processing to industrial technologies. With hands in so many relevant areas, LyondellBasell is ready to weather a potential economic storm.
Interestingly, because the company is so relevant, LYB stock is down just 1% year-to-date. Still, the last five days have been tough for the chemicals specialist, losing 8% in market value. Despite the carnage, investors with a long-term perspective should consider adding stocks to their portfolio.
As with 3M above, LyondellBasell is undervalued; in fact, significantly over the competition. For example, LYB’s forward price-to-earnings ratio of 6x is more “favorable” than its rivals, where the industry median is 15x forward earnings. LYB isn’t exactly the most exciting name among high-yielding dividend stocks, but it should guide you through this storm.
High Yield Dividend Stocks: NorthWestern Corp (NWE)
Whenever the topic of protection against economic headwinds comes up, I like to bring up utility companies. If you’ve been following my work for a while, you probably know what I’m going to say next: bad things happen when people flip the switch and the light doesn’t come on. It’s just a sociological reality that crimes tend to increase when the power goes out.
However, I mention North West Society (NASDAQ:ENO) on this list of high yielding dividend stocks to buy for the positives. Mainly, in an environment where the purchasing power of the dollar continues to decline, households should reduce their discretionary spending. You are not going to cut utilities unless circumstances have become dire.
Second, its regional focus on Montana, South Dakota and Nebraska could be an advantage as many millennials tired of the metropolitan lifestyle head to the northwestern states. If working from home becomes a permanent dynamic – for full disclosure, I don’t think – NWE could be quite a treasure trove of high-yielding dividend stocks to buy.
Philip Morris (PM)
With millennials and Gen Z focused on environmental, social and governance (ESG) ideas, being incredibly cynical, especially with big tobacco companies, is a major no-no. Again, you don’t need to disclose your holdings to the world (unless you are required to by your profession). Crude as the subject is, Philip Morris (NYSE:PM) is a relevant name among high yielding dividend stocks to buy.
According to a study by the German Institute for Labor Economics, “the propensity to become a smoker increases significantly in times of economic downturn”. You can dive into the details if you’re curious by clicking the aforementioned link. However, the finding is not particularly surprising, given that cigarettes alleviate stress – or should I say, perceived to alleviate stress.
Additionally, Philip Morris is heavily involved in the smoke-free category. Interestingly, its IQOS platform is small and discreet, which matches current trends among e-cigarette/vaping connoisseurs. While not the most pleasant of high-yield dividend stocks to buy, PM gets the job done.
Considered a leading intermediary service provider connecting prolific supply basins to key market hubs, Oneok (NYSE:okay) specializes in the processing, storage and transportation of natural gas. Of course, with the “special military operation” in Eastern Europe and its ongoing destabilization, natural gas has become a geopolitical balloon. Still, in the meantime, this dynamic should benefit companies like Oneok.
One of the intriguing circumstances, however, is that this middle-of-the-road company did not enjoy the upside performance of its peers. On a YTD basis, OKE is down 9%. At the same time, it evokes the prospect that Oneok could be a great longer-term buy.
In the first quarter of 2022, the company posted revenue of $5.44 billion, up more than 70% from the prior year quarter. In terms of net profit, the improvement was only marginal, but still, at $391 million, it topped the Q1 2021 total by $5 million. With the global energy equation becoming increasingly tricky, OKE looks a solid bet among high-yielding dividend stocks.
High Yield Dividend Stocks: EPR Properties (EPR)
For the final entry for high yield dividend stocks to buy, I’ll dive into the speculative side of the spectrum with REP properties (NYSE:REP). According to its website, EPR is the leading experiential real estate investment fund, specializing in select sustainable experiential properties in the real estate industry.
What does this mean exactly? Basically, EPR focuses on properties such as theme parks, resorts, and cineplexes, among other high-traffic establishments. Although the stock is volatile – it has fallen almost 15% in the past five days – the underlying activity is aligning with contemporary travel trends.
Despite the suffocating impact of inflation, Americans are still very eager to get out and make new memories with friends and family. The EPR therefore responds to this request for experiments. However, you have to be careful. With a dividend yield of 7.3%, it’s the highest on this list, but it could be so for a reason: Among analysts, it’s a low-confidence affair.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.