In light of stock markets declining ahead of third-quarter earnings season, five high dividend yield guru stocks trading at a fair GF Value include Verizon Communications Inc. (VZ, Financial), AbbVie Inc. (ABBV, Financial), Exxon Mobil Corp. (XOM, Financial), Gilead Sciences Inc. (GILD, Financial) and AT&T Inc. (T, Financial) according to the High Dividend Yield Guru Screen, a Premium feature of GuruFocus.
Dow sinks for a third straight day as investors await inflation data and start of earnings season
On Tuesday, the Dow Jones Industrial Average closed at 34,378.34, down 117.72 points from Monday’s close of 34,496.06 and for the third trading day in a row.
Stocks sank as investors await several “catalysts” like the September consumer price index reading and retail sales data, as well as the beginning of the third-quarter earnings season according to an analyst note from Stifel Financial Corp. (SF, Financial).
GuruFocus’ Most Broadly Held strategy continues outperforming the benchmark
According to the model portfolios page, GuruFocus’ Most Broadly Held model portfolio has returned a cumulative 489.41% since inception, with five-year and 10-year annualized returns outperforming the Standard & Poor’s 500 Index's returns over the respective periods.
As such, investors may find opportunties in high dividend yield stocks that have high guru ownership and are trading below the GF Value line. Patterned after legendary Fidelity Magellan Fund manager Peter Lynch’s earnings line, GuruFocus’ exclusive valuation line considers several factors, including historical price multiples and an internal adjustment based on the company’s past performance and future growth estimates.
Verizon
Twelve gurus bought shares of Verizon (VZ, Financial) over the past few months. As of the second-quarter filing, Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A)(BRK.B) owns 158,824,575 shares, giving the position 3.04% weight in its $293.02 billion equity portfolio.
Shares of the New York-based telecom company traded around $51.29, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.87. Additionally, the stock is approximately 0.20% above its 52-week low, while its dividend yield of 4.90% is near a five-year high and outperforms more than 65% of global telecom companies.
GuruFocus ranks Verizon’s profitability 7 out of 10 on several positive investing signs, which include profit margins and returns that outperform more than 73% of global competitors.
Other gurus with holdings in Verizon include Pioneer Investments, Diamond Hill Capital (Trades, Portfolio) and the Parnassus Endeavor Fund (Trades, Portfolio).
AbbVie
Eleven gurus purchased shares of AbbVie (ABBV, Financial) during the past few months. Berkshire owns 20,527,861 shares, giving the position 0.79% equity portfolio weight.
Shares of AbbVie traded around $108.57, showingthe stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.89. Additionally, the stock’s dividend yield of 4.67% tops more than 93% of global competitors.
GuruFocus ranks the North Chicago, Illinois-based drug manufacturer’s profitability 8 out of 10 on the back of profit margins that are outperforming more than 90% of global competitors.
Other gurus with holdings in AbbVie include the T Rowe Price Equity Income Fund (Trades, Portfolio) and Pioneer Investments.
Exxon Mobil
Ten gurus purchased shares of Exxon Mobil (XOM, Financial) over the past few months. Shares traded around $61.24, showing the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.92.
Exxon Mobil’s dividend yield of 5.65% outperforms more than 73% of global competitors.
GuruFocus ranks the Irving, Texas-based energy company’s financial strength 4 out of 10 on several warning signs, which include a low Piotroski F-score of 3 and a debt-to-equity ratio that underperforms approximately half of global competitors.
Gilead Sciences
Nine gurus bought shares of Gilead Sciences (GILD, Financial) during the past few months. Shares traded around $67.37, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.87.
Gilead’s dividend yield of of 4.16% is near a 10-year high and outperforms more than 88% of global competitors.
GuruFocus ranks the Foster, California-based drug manufacturer’s profitability 7 out of 10 on several positive investing signs, which include profit margins and returns that outperform more than 80% of global competitors.
AT&T
Nine gurus purchased shares of AT&T (T, Financial) during the past few months. Shares traded around $25.43, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.87.
The Dallas-based telecom company’s dividend yield of 8.18% is near a 10-year high and outperforms over 77% of global competitors.
GuruFocus ranks AT&T’s financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 0.74 and interest coverage and debt ratios that underperform more than 68% of global competitors.
