As investors continue grappling with rising coronavirus cases domestically and internationally, four stocks with high business quality and dividend yields are Cummins Inc. (CMI, Financial), Gentex Corp. (GNTX, Financial), W.W. Grainger Inc. (GWW, Financial) and T. Rowe Price Group Inc. (TROW, Financial) according to the Dividend Income Screen, a Premium GuruFocus screen within the All-in-One Screener.
Stock market erases early gains as coronavirus cases continue surging around the globe
On Monday, the Standard & Poor’s 500 Index and the Nasdaq Composite Index closed at 3,155.22 and 10,390.84, down 0.94% and 2.13% from the previous close of 3,185.04 and 10,617.44. On the other hand, the Dow Jones Industrial Average closed at 26,085.80, eking out a gain of 10.50 points from last Friday’s close of 26,075.30.
Although shares of electric vehicle giant Tesla Inc. (TSLA, Financial) surged to a new all-time intraday high of $1,794.99, shares of the Elon Musk-led company closed at $1,497.06, down 3.08% from the previous close of $1,544.65.
Stocks rallied early on news that the U.S. Food and Drug Administration granted fast track designation for two of Pfizer Inc. (PFE, Financial) and BioNTech SE’s (BNTX, Financial) four investigational vaccine candidates for SARS-Cov-2, the virus that causes Covid-19. However, gains dissipated into the close as investors monitored increasing new Covid-19 cases across the U.S., with over 60,000 new cases per day over the past three days. According to Johns Hopkins University statistics, global cases are closing in on 13 million, including over 3.3 million cases in the U.S.
High-Quality Dividend Screen identifies opportunities
To combat volatile market swings, investors could consider high-quality stocks with high dividend yields. The Dividend Income Screen seeks companies with high financial strength, profitability, business predictability and at least 10 years of dividend increases.
Cummins
Cummins manufactures diesel engines used in commercial trucks, off-highway equipment and railroad locomotives. GuruFocus ranks the Columbus, Indiana-based company’s profitability 8 out of 10 on the back of returns outperforming over 91% of global competitors despite operating margins outperforming just over 71% of global industrial machinery companies.
Cummins has continuously increased its dividend since 2005. The company’s dividend yield of 3.01% outperforms 67% of global competitors.
Gurus with holdings in Cummins include First Eagle Investment (Trades, Portfolio) and Bill Nygren (Trades, Portfolio).
Gentex
Gentex supplies digital vision, connected car, dimmable glass and fire protection technologies. GuruFocus ranks the Zeeland, Michigan-based company’s financial strength and profitability 9 out of 10 on several positive investing signs, which include no long-term debt, a high Piotroski F-score of 7, a double-digit Altman Z-score, a four-star business predictability rank and an operating margin that outperforms 98% of global competitors.
Gentex’s dividend has increased over the past 10 years. Gurus riding the company’s high business quality include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Chuck Royce (Trades, Portfolio)’s Royce Investment Partners.
W.W. Grainger
W.W. Grainger distributes over 1.7 million maintenance, repair and operation products through its network of over 450 global branches. GuruFocus ranks the company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and returns that are outperforming over 96% of global competitors.
Grainger has continuously increased its dividend since 1972. Gurus riding the company’s dividend increases include Renaissance Technologies and Jerome Dodson (Trades, Portfolio)’s Parnassus Endeavor Fund (Trades, Portfolio).
T Rowe Price
T Rowe Price offers a broad range of mutual funds, which include the T Rowe Price Equity Income Fund (Trades, Portfolio) and the T. Rowe Price Japan Fund (Trades, Portfolio). GuruFocus ranks the Baltimore-based company’s profitability 9 out of 10 on the back of returns outperforming over 92% of global competitors. Other positive investing signs, which include a strong Altman Z-score of 10 and debt ratios that outperform over 86% of global asset management companies, contribute to a high GuruFocus financial strength rank of 8.
Disclosure: Author is long Gentex.
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