Finding stocks that pay a decent dividend is a little more difficult in the current market than it has been in the past. The strong bull market combined with difficult economic conditions means that stock prices have skyrocketed, but dividend payments have not followed suit.
In fact, the average dividend yield of the S&P 500 companies has fallen all the way to 1.29% compared to the 10-year treasury yield of 1.30% as of the time of writing.
Despite average dividend yields plummeting, there are still some higher-yield names that could be worth looking at according to the GuruFocus All-in-One Screener. For this search, I screened for stocks that have a dividend yield of at least 3% and appeared in the portfolios of at least 20 of the Premium gurus followed by GuruFocus as of the end of the second quarter. Among the results of this search, here are the five names that gurus were buying the most during the recent quarter.
Merck & Co.
Merck & Co. Inc. (MRK, Financial), also known as Merck Sharp & Dohme outside of the U.S. and Canada, is a pharmaceutical giant based in Kenilworth, New Jersey. The company focuses its research and production primarily on vaccines, oncology, infectious diseases and cardio-metabolic disorders.
On Sept. 9, shares of Merck traded around $73.77 for a market cap of $186.64 billion. The GuruFocus Value chart rates the stock as modestly undervalued.
The trailing 12-month dividend yield is 3.48%, while the forward dividend yield is 3.53%. Merck has a three-year dividend growth rate of 9.50%. The next quarterly dividend of 65 cents per share is set to be paid on Oct. 7.
During the second quarter, 14 gurus bought shares of Merck, though 13 gurus sold shares of the stock. The stock is held by 30 gurus. The top shareholders include Pioneer Investments with 0.42% of shares outstanding, Ken Fisher (Trades, Portfolio) with 0.41% and Barrow, Hanley, Mewhinney & Strauss with 0.40%.
Verizon Communications
Verizon Communications Inc. (VZ, Financial) is a telecommunications company headquartered in New York. It provides wireless, internet, TV and phone services to customers in the U.S. and internationally. In its home country, it is one of the three major wireless providers alongside AT&T (T, Financial) and T-Mobile (TMUS, Financial).
On Sept. 9, shares of Verizon traded around $54.53 for a market cap of $225.53 billion. The GF Value chart rates the stock as fairly valued.
The trailing 12-month dividend yield is 4.60%, while the forward dividend yield is 4.69%. Verizon has a three-year dividend growth rate of 2.10%. The next quarterly dividend of 64 cents is set to be paid on Nov. 1.
During the second quarter, 12 gurus bought shares of Verizon, though 11 sold shares of the stock. The stock is held by 25 gurus. Top guru shareholders include Warren Buffett (Trades, Portfolio) with 3.84% of shares outstanding, Pioneer Investments with 0.18% and Diamond Hill Capital (Trades, Portfolio) with 0.10%.
Pfizer
Pfizer Inc. (PFE, Financial) is a multinational biopharmaceutical company headquartered in New York. Its main areas of research are internal medicine, inflammation and immunology, oncology, rare diseases, vaccines and anti-infectives. Its most recent success has been its Covid-19 vaccine that was developed in partnership with BioNTech (BNTX, Financial).
On Sept. 9, shares of Pfizer traded around $45.94 for a market cap of $257.54 billion. The GF Value chart rates the stock as fairly valued.
The trailing 12-month dividend yield is 3.35%, while the forward dividend yield is 3.37%. Pfizer has a three-year dividend growth rate of 5.90%. The next quarterly dividend is expected to be declared on Sept. 23.
During the quarter, 10 gurus bought shares of Pfizer, though nine sold shares of the stock. The stock is held by 25 gurus. The top shareholders include the Vanguard Health Care Fund (Trades, Portfolio) with 1.25% of shares outstanding, Pioneer Investments with 0.25% and Diamond Hill with 0.21%.
Lockheed Martin
Headquartered in Bethesda, Maryland, Lockheed Martin Corp. (LMT, Financial) is an American aerospace and defense giant with interests around the world. It is primarily engaged in the design, development, manufacture, integration and sustainment of various defense-related technologies.
On Sept. 9, shares of Lockheed Martin traded around $348.93 for a market cap of $96.59 billion. The GF Value chart rates the stock as modestly undervalued.
The trailing 12-month dividend yield and forward dividend yield are both 3%. Lockheed Martin has a three-year dividend growth rate of 9.50%. The next quarterly dividend of $2.60 is set to be paid on Sept. 24.
During the second quarter, 13 gurus bought shares of Lockheed Martin, while only seven sold shares of the stock. The stock is held by 22 gurus. Top guru shareholders include Yacktman Asset Management (Trades, Portfolio) with 0.13% of shares outstanding, Catherine Wood (Trades, Portfolio) with 0.10% and Jim Simons (Trades, Portfolio)' Renaissance Technologies with 0.08%.
Chevron
Chevron Corp. (CVX, Financial) is a member of the “Big Six” multinational oil companies that dominate the U.S. market share. Headquartered in San Ramon, California, the company explores for and refines oil and natural gas and produces a variety of chemicals, including ethylene, polyethylene, aromatics and styrenics.
On Sept. 9, shares of Chevron traded around $96 for a market cap of $185.83 billion. The GF Value chart rates the stock as fairly valued.
The trailing 12-month dividend yield is 5.48%, while the forward dividend yield is 5.58%. Chevron has a three-year dividend growth rate of 6.10%. The next quarterly dividend of $1.34 is set to be paid on Sept. 10.
During the second quarter, 10 gurus bought shares of Chevron, though eight sold shares of the stock. The stock is held by 21 gurus. The top shareholders include Buffett with 1.20% of shares outstanding, Pioneer Investments with 0.41% and Ken Fisher (Trades, Portfolio) with 0.31%.
