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Alberto Abaterusso
Alberto Abaterusso
Articles (1975) 

High-Yield Stocks for the Dividend Investor

Their dividend yield tops the S&P 500

January 22, 2020 | About:

In terms of current dividend yield, the following securities more than double the S&P 500 Index, which is the benchmark for the U.S. market. The S&P 500’s yield was 1.75% at market close on Tuesday, Jan. 21.

Gilead Sciences

The first company that meets the above-listed criteria is Gilead Sciences Inc (NASDAQ:GILD).

Shares of the Minneapolis, Minnesota-based drug major traded at a price of $62.63 per unit at a close on Jan. 21 for a market capitalization of $79.24 billion.

Based on Tuesday 's closing price, Gilead Sciences grants a dividend yield of 4.02%. The U.S. large-cap biopharma currently pays a 63 cents quarterly cash dividend per common share. The last payment was made on Dec. 30, 2019. Gilead Sciences has been distributing dividends since June 2015.

Gilead Sciences’ current dividend yield is near five-year high, indicating that the stock is a profitable investment.

The share price has fallen 8% in the past year through Jan. 21 to well underneath the 200-, 100- and 50-day simple moving average lines.

The 52-week range is $60.89 to $70.5. The 14-day relative strength index of 31 suggests the stock is not far from oversold levels.

Further, the stock has a price-earnings ratio of 29.97 versus the industry median of 21.26 and a price-sales ratio of 3.58 versus the industry median of 2.5.

GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and the highest profitability rating of 10 out of 10.

Wall Street issued an overweight recommendation rating for this stock with an average target price per share of $76.29.

United Utilities

The second company that meets the above-listed criteria is United Utilities Group PLC (UUGRY).

Shares of the British provider of water and wastewater services in the United Kingdom was trading at a price of $25.9 per unit at close on Jan. 21 for a market capitalization of $8.83 billion.

Based on Tuesday’s closing share price, United Utilities grants a 3.99% dividend yield. On Feb. 10, the company will pay a semi-annual dividend of 36.7 cents per common share. The most recent payment of 66.6 cents per common share was made on Aug. 8, 2019. The company has been paying dividends for over two decades.

The current dividend yield of United Utilities looks moderately good compared to its historical values, indicating that this stock is still a profitable investment.

The share price rose 20% in the past year through Jan. 21 to above the 200-, 100- and 50-day simple moving average lines.

The 52-week range is $18.26 to $26.18. The 14-day relative strength index of 66 indicates that the stock is neither overbought nor oversold.

The stock has a price-earnings ratio of 22.11 versus the industry median of 17.23 and a price-sales ratio of 3.73 versus the industry median of 1.48.

GuruFocus assigned a low rating of 3 out of 10 for the company's financial strength but a very positive rating of 7 out of 10 for its profitability.

Wall Street issued a hold recommendation rating for this stock with an average price target of $24.13.

Equitrans Midstream

The third company to consider is Equitrans Midstream Corporation (NYSE:ETRN).

Shares of the Canonsburg, Pennsylvania-based oil and gas midstream operator were trading at $12.37 per unit at close on Jan. 21 for a market capitalization of $3.15 billion.

Based on Tuesday’s closing share price, Equitrans offers a 14.23% dividend yield. On Feb. 21, Equitrans will pay 45 cents per common share. The most recent payment of the same amount was made on Nov. 22, 2019. The company has been paying dividends for one year.

The current dividend yield of Equitrans is high relative to its past values, suggesting that the stock represents a profitable investment.

The share price has fallen 41% in the past year through Jan. 21 to place substantially below the 200-day simple moving average line and slightly underneath the 100-day SMA line. It is still above the 50-day SMA line.

The 52-week range is $9.17 to $22.29. The 14-day relative strength index is 48, suggesting that the stock is neither oversold nor overbought.

The stock has a price-earnings ratio of 206.17 versus the industry median of 11.13 and a price-sales ratio of 1.98 versus the industry median of 0.94.

Wall Street issued an overweight recommendation rating for this stock with an average target share price of $15.55.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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