Top 3 dividend stocks yield as high as 8.7% – inflation still close

Top yields as high as 8.7% in 3 top dividend stocks - inflation is still close to 40-year highs, it may be a good move to reduce some earnings

Stocks of the top 3 dividends are yielding as high as 8.7% – inflation is still close to a 40-year high, it may be a good move to reduce some earnings

Inflation on a white-hot tear.

U.S. consumer prices rose 8.3% in April from a year earlier, down slightly from 8.5% in March, but are still close to a 40-year high.

Central bankers believe that inflation is short-lived, with prices rising at the moment.

To preserve purchasing power, investors usually lean towards assets such as gold and silver during times of inflation. But dividend stock is another option.

If a company can provide a steady stream of dividends over time as prices rise, it could give you a hedge against inflation.

Of course, due to the increased bull market, most stocks nowadays do not offer very high prices. The average S&P 500 company gains just 1.5% right now.

But there are companies with much more generous payouts. Look at the stock of three dividends with high-average yields up to 8.7% here.

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Bank of America (BAC)

Let’s start with bank stocks. Why? While many sectors are fearing rising interest rates, banks are waiting for them.

The central bank raises interest rates to control inflation.

Banks lend at a higher rate than their lenders, keeping the difference in their pockets. When interest rates rise, the spread of how much a bank earns widens.

And that’s exactly why so many banks, such as Bank of America, have increased their payments to shareholders over the past year.

In July, Bank of America raised its quarterly dividend from 17% to 21 cents per share. This gives the company an annual return of 2.4% on its current share price.

The stock market had a slow start in 2022 and Bank of America has fallen 22% so far. But a big comeback could be on the horizon. Goldman Sachs Company has a buy rating and the price target is $ 51 – roughly 43% above where the stock is sitting today.

Southern Co. (SO)

Yield Ladder is a gas and electrical utility holding company headquartered in Southern, Atlanta. It serves about 9 million customers.

The utility sector is known as a defensive game – and not just against inflation. However, people still have to heat their house in winter and turn on the lights at night.

The recessionary nature of the business means the South can pay reliable dividends.

In April, the company raised its quarterly payout by 2 cents to 68 cents per share, marking the 21st consecutive year that Southern has increased its dividends.

Look further back, and you will see that the company has been paying fixed or growing dividends since 1948.

In 2021, Southern has achieved a consistent profit of $ 3.41 per share, up 5% from 2020. Management expects adjusted earnings per share for 2022 to be between $ 3.50 and 60 3.60.

For every $ 74 traded, Southern Stock offers a solid annual yield of 3.7%.

In April, Wells Fargo analyst Neil Calton raised its Southern price target from $ 68 to $ 80. Although he maintains an equal weight rating on the shares, the new price target indicates a potential upside of 8.1%.

Global Partners (GLP)

If you want a really large yield, you may want to look at lesser known stocks – such as Global Partners.

Formed as a Master Limited partnership, Global Partners is one of the largest independent owners, suppliers and operators of gas stations and convenience stores in the Northeast.

At the same time, it is a leading wholesale distributor of energy products and involved in the transportation of petroleum products and renewable fuels by rail from the continental United States and Canada.

The business offers a quarterly distribution of 59.5 cents per unit, which comes out of a surprising annual yield of 8.7%.

In the 12 months loyal to March 31, Global Partners’ distributable cash flow has covered 1.7 times its payout after factoring in the distribution to its preferred unitholders.

With less than $ 1 billion market cap, global partners do not receive the same Wall Street coverage as the previous two. However, the sheer size of its distribution yields makes the stock worthy of further study.

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