Dividend investors may want to consider the following companies since they outperform the S&P 500 Index in terms of a higher dividend yield. As of March 20, the benchmark for the U.S. market yields 2.53%.
These stocks also represent long-term dividend payers.
BCE
The first company to consider is BCE Inc. (BCE, Financial).
The Canadian telecommunication services company closed at a price of $35.9 per share on March 20 for a market capitalization of $32.42 billion.
Based on Friday's closing price, BCE offers a trailing 12-month dividend yield of 6.71% and a forward dividend yield of 6.62%. On April 15, the company will pay a quarterly dividend of 83.3 cents per common share, which is a 5.04% hike from the previous payment. BCE has been distributing dividends for about 35 years.
The current dividend yield is quite high compared to its historical values. Furthermore, it is a “good” dividend yield for GuruFocus, which adds to the thesis for a profitable investment.
The recent market selloff due to fears surrounding the coronavirus outbreak had a severe impact on the share price of BCE over the last two weeks, as you can see in the chart below. The stock is down 19% compared to a year ago, standing significantly below the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $35.06 to $49.58. The 14-day relative strength index of 35 indicates the stock is not far from oversold levels.
GuruFocus assigned the company a moderate financial strength rating of 4 out of 10 and a very good profitability rating of 7 out of 10.
Wall Street issued an overweight recommendation rating for the stock with an average target price of $47.61. The overweight recommendation rating means it is expected to outperform either the industry or the overall market.
Spark New Zealand
The second company to consider is Spark New Zealand Ltd. (SPKKY, Financial).
Shares of the Auckland-based telecom services company traded at a price of $11.15 per unit at close on March 20 for a market capitalization of $4.1 billion.
Based on Friday’s closing price, Spark New Zealand grants a 7.14% trailing dividend yield and an 8.07% forward dividend yield. On April 13, the company will pay a semi-annual dividend of 45 cents per common share, which is a 21% increase from the first semi-annual dividend of 2019 (34.7 cents on April 15) and a 29.7% hike from the second semi-annual dividend (37.2 cents on Oct. 15). The company has been paying dividends for almost three decades.
Spark New Zealand’s current dividend yield is quite high compared to its historical values, it is near a five-year high and GuruFocus considers it as a “good” reward. These points indicate the stock is a profitable investment.
As a result of the market selloff, shares of Spark New Zealand tumbled in recent weeks.
Over the past year, the share price declined 11% and now it trades substantially below the 200-, 100- and 50-day simple moving average lines.
The 52-week range is $10.80 to $15.51. The 14-day relative strength index of 25 indicates the stock has entered oversold territory.
GuruFocus assigned a moderate rating of 5 out of 10 for the company's financial strength and a very good rating of 7 out of 10 for its profitability.
Wall Street issued a hold recommendation rating for the stock with an average price target of $14.42 per share.
Extendicare
The third company to consider is Extendicare Inc (EXETF, Financial).
Shares of the Canadian operator of long-term care centers and provider of publicly funded home health care services in Canada traded at $3.97 per unit at close on March 20 for a market capitalization of $345.9 million.
Based on Friday’s closing price, Extendicare offers a trailing 12-month dividend yield of 9.09% and a forward dividend yield of 8.76%. On April 15, the company will, in line with the previous four distributions, pay a quarterly cash dividend of 4 cents (in Canadian dollars) per common share. The company has been paying dividends for about a decade.
GuruFocus says the current dividend yield is "good" since it is close to a five-year high, indicating it is a profitable investment.
The share price of Extendicare declined to below the 200-, 100- and 50-day simple moving average lines over the past several weeks. It has lost 29% over the past year.
The 52-week range is $3.45 to $7.26. The 14-day relative strength index is 26, suggesting the stock is oversold.
GuruFocus assigned the company a moderate financial strength rating of 4 out of 10 and a positive profitability rating of 6 out of 10.
Wall Street issued an overweight recommendation rating for the stock and has established an average target price of $8.88 per share.
Disclosure: I have no positions in any securities mentioned.
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