In terms of a higher dividend yield, the following securities are outperforming the S&P 500 index, which had a dividend yield of 1.92% at market close on May 17.
In addition, the return on invested capital ratio exceeds the weighted average cost of capital ratio, indicating these companies are profitable investments for all shareholders, including banks and bondholders, as the WACC is over 3.5 times the federal rate of 2.5%.
The first company is Vector Group Ltd. (VGR, Financial), which closed at $9.55 per share on Friday with a market capitalization of $1.35 billion. The stock has a forward dividend yield of 16.75% versus the industry median of 5%.
Based in Miami, Florida, Vector Group paid dividends from 1988 to 1992 and from 1994 to March 28, 2019. Its dividend per share increased 1.5% on average per annum over the past five years.
Currently, the tobacco company is paying a quarterly dividend of 40 cents per common share.
Vector has a ROIC of 42.01% and a WACC of 9.74%.
GuruFocus assigned the company a rating of 4 out of 10 for financial strength and a 7 out of 10 rating for profitability and growth.
The stock has a price-earnings ratio of 23.88 versus the industry median of 17.38 and a price-sales ratio of 0.72 compared to the industry median of 2.66.
The stock has fallen 2% so far this year. The 52-week range is $9.12 to $19.12.
The 14-day relative strength index of 40 suggests the stock is neither oversold nor overbought.
Wall Street suggests holding shares of Vector Group.
The second company is Sprague Resources LP (SRLP, Financial), which closed at $18.36 per share on Friday with a market capitalization of $417.40 million. The forward dividend yield is 14.54% versus an industry median of 4.2%.
Based in Portsmouth, New Hampshire, the distributor of refined petroleum products and natural gas in the U.S. has paid dividends since 2014.
Sprague's dividend per share increased 2.1% on average every year over the past five years.
Currently, the oil and gas refining and marketing company is paying a quarterly dividend of 66.75 cents per common share.
Sprague has a ROIC of 9.72% compared to a WACC of 7.51%.
GuruFocus assigned a rating of 5 out of 10 for the company's financial strength and 4 out of 10 for profitability and growth.
The stock has a price-earnings ratio of 13.70 versus an industry median of 11.49, a price-book ratio of 2.78 compared to an industry median of 1.75 and a price-sales ratio of 0.11 versus an industry median of 0.42. The EV-to-Ebitda ratio is 9.18 compared to the industry median of 8.25.
Year to date, the stock has gained 27%. The 52-week range is $13.76 to $28.00.
The 14-day relative strength index of 45 suggests the stock is neither oversold nor overbought.
Wall Street suggests holding shares of Sprague Resources.
The third company is SunCoke Energy Partners L.P. (SXCP, Financial), which closed at $11.18 per share on Friday with a market capitalization of $516.82 million.
The stock has a forward dividend yield of 14.31% versus an industry median of 3.4%. Based in Lisle, Illinois, SunCoke Energy produces and sells raw materials.
The company has paid dividends since September 2013.
The dividend per share declined 8% on average every year over the past five years.
On June 3, SunCoke will pay a quarterly dividend of 40 cents per common share to shareholders of record as of May 14. The ex-dividend date was May 13.
SunCoke has a ROIC of 8.11% and a WACC of 7%.
GuruFocus assigned a rating of 4 out of 10 for SunCoke's financial strength and a 5 out of 10 rating for profitability and growth.
The stock has a price-earnings ratio of 10.55 versus the industry median of 12.82, a price-book ratio of 0.88 versus an industry median of 1.65 and a price-sales ratio of 0.57 versus an industry median of 1.28. The EV-to-Ebitda ratio is 6.34 compared to the industry median of 7.79.
The share price climbed 5% this year. The 52-week range is $9.61 to $17.80 per share.
The 14-day relative strength index of 35 suggests the stock is approaching oversold levels.
Wall Street issued an overweight recommendation rating for SunCoke Energy. This rating means the stock is expected to outperform either the industry or the overall market with a target price of $16.50 per share.
Disclosure: I have no positions in any securities mentioned.
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