The 6 Highest Yielding S&P 500 Dividend Stocks Are Outstanding Buys Now
Investors love dividend stocks because they not only provide dependable income but also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over a given period. In other words, the total return on an investment or a portfolio includes both dividend income and stock appreciation.
We screened our 24/7 Wall St. research database looking for companies in the S&P 500 that were rated Buy at major Wall Street firms that also paid the highest dividends in the venerable index. We found six that look like great ideas for income-oriented investors looking for some upside appreciation as well. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This maker of tobacco products offers value investors a great entry point now and was hit recently as cigarette sales have slowed. Altria Group Inc. ( NYSE: MO ) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world's largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.
The company is also rolling out its own heated and vapor products, such as Marlboro HeatSticks and IQOS, both of which are slowly expanding across the country.
The company has increased its dividend for 50 consecutive years. Shareholders now receive a 7.46% dividend. BofA Securities has a $58 target price on Altria stock, and the Wall Street consensus price target is $55.23 The shares closed on Thursday at $48.81 apiece.
This mega-cap energy leader still offers investors an incredible entry point. Exxon Mobil Corp. ( NYSE: XOM ) is the world's largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.
Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.
Stellar results for the second quarter were due in part to the company’s upstream segment net income, which came in above consensus estimates, rebounding sharply from the year-ago quarter's pandemic-depressed lows. The upstream segment is involved in the exploration and development of oil and natural gas properties, as well as the extraction and production of crude oil and natural gas. It benefits from higher oil prices. Earnings and revenue continue to rebound as the global economy recovers from last year's pandemic-induced shock.
Exxon Mobil stock investors receive a 6.30% dividend, which will continue to be defended. The BofA Securities price target of $90 is well above the $66.34 consensus target. The stock closed at $57.08 on Thursday.
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This real estate investment trust (REIT) still looks to have solid upside potential. Iron Mountain Inc. ( NYSE: IRM ) is the global leader in secure storage. It operates in 54 countries, generates more than $4.2 billion in revenue and has a durable business model. Recent acquisitions position the company for growth in data centers and emerging markets.
Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data and cultural and historical artifacts. Providing solutions that include information management, digital transformation, secure storage, secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster and enable a more digital way of working.
This REIT and pays a large 5.52% distribution. The $43 Goldman Sachs price target compares with a consensus estimate of $40.13. Thursday's closing share price for Iron Mountain stock was $29.56.
A top energy stock, this remains a favorite across Wall Street. Kinder Morgan Inc. ( NYSE: KMI ) operates as an energy infrastructure company in North America. The company operates through the following segments.
The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipelines and underground storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids (NGLs) fractionation facilities and transportation systems; and liquefied natural gas (LNG) liquefaction and storage facilities.
The Products Pipelines segment owns and operates refined petroleum products and crude oil and condensate pipelines, as well as associated product terminals and petroleum pipeline transmix facilities.
The Terminals segment owns or operates liquids and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals and petroleum coke. It also owns tankers.
The CO2 segment produces, transports and markets CO2 to recover and produce crude oil from mature oil fields, and it owns interests in or operates oil fields and gasoline processing plants, as well as operates a crude oil pipeline system in West Texas. It owns and operates approximately 83,000 miles of pipelines and 144 terminals.
Shareholders receive a 6.70% dividend. This summer, Mizuho raised its price target to $22 from $21. The consensus target for Kinder Morgan stock is $18.52, and Thursday's closing print was $16.49 per share.
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The solid price of natural gas over the past year has helped to lift this top energy company. ONEOK Inc. ( NYSE: OKE ) primarily engages in natural gas transportation, storage and natural gas and NGLs gathering, processing and fractionation in the Bakken, Mid-Continent and Permian. The company recently closed the roll-up of its underlying master limited partnership, ONEOK Partners.
The company has a strong presence in the Oklahoma SCOOP/STACK (NGL gathering/takeaway system, G&P), the Williston Basin (G&P, NGL takeaway) and the Permian Basin (NGL gathering, NGL takeaway, natural gas takeaway), which analysts feel provides high-return growth opportunities.
Many on Wall Street remain very positive on the company's primarily fee-based earnings, which account for 90% of total earnings.
Investors receive a 6.82% dividend. Bernstein has set a $66 price target on ONEOK stock. The consensus target of $56.50 is less than Thursday's close at $57.46 a share.
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This top energy company is also a solid pick for more conservative investors looking for exposure to LNG. Williams Companies Inc. ( NYSE: WMB ) operates as an energy infrastructure company primarily in the United States.
Its Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines, as well as natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing and fractionation activities in the Marcellus Shale region, primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio.
The West segment comprises gas gathering, processing and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana and the Mid-Continent region, which includes the Anadarko, Arkom, and Permian basins. It also includes NGL and natural gas marketing operations, as well as storage facilities.
The company owns and operates 30,000 miles of pipelines, 34 processing facilities, nine fractionation facilities and approximately 23 million barrels of NGL storage capacity.
Shareholders receive a 6.55% dividend. The Raymond James price target is $30. The consensus is $29.05. Williams Companies stock closed on Thursday at $25.95 a share.
The six highest yielding stocks in the S&P 500 and all of these stocks give investors great total return potential, and with four in the red-hot energy sector for investors looking to take positions or increase exposure, these could be just the right idea now.