Nowadays everyone’s looking for that high-yield stock. Even harder to find, is a high-yield stock whose payout is sustainable. But just because their dividend Is set for the next few years, doesn’t mean it is for the next few decades.
Dividend growth is just as important as having a high-yield. A company must be able to not only supply its dividend without issues, but grow it in pace with other companies, keeping it high. The following is a list of stocks that have generous dividends, and reasons why it’s not only safe, but should grow in the future.
Chevron (CVX, Financial)
Even though there will be an eventual rebound in oil prices, Chevron is taking it step by step. Its $22.8 billion capital budget is nearly unchanged from last year, mimicking similar budgets from rivals BP and Total. Even though it does not plan on increasing projects as fast as Exxon Mobil (XOM), it still has a long list of projects around the world, and has stated they will pounce on any promising opportunity to enhance its long-term growth strategy.
Over the last five years, they have increased their dividend by 12% annually. With a payout ratio of just 22%, their dividend is extremely safe, even if oil prices stay depressed for longer than expected. With an attractive yield and a promising future, expect this stock to outperform, unless a large rally occurs.
General Dynamics (GD, Financial)
General Dynamics has a good grip on the future of militaries around the world. They make the submarines, destroyers and littoral combat vessels that will be the basis of naval power in the 21st century. The produce highly advances armored vehicles to protect our troops from guerilla warfare. Needless to say, their market is extremely profitable and growing, no matter who is in power.
General Dynamics has been paying dividends since 1991. Sure, they haven’t increased their dividend every year, but they have been fairly consistent, raising their dividend ten-fold during that period. Even in this tough environment, General Dynamic has managed to increase its payout, with a measly payout ratio of 22%.
The company has also managed to grow its bottom line through a series of acquisitions, while managing to keep capital expenditures extremely low. It sports a debt load of a little over $3 billion, but at less than one-third of General Dynamic’s total equity, it shouldn’t be hard to manage debt payments through operating income alone.
Good Luck,
Ryan Vanzo
Disclosure: I hold no positions in any of the stocks listed in this article.
Also check out: (Free Trial)
Dividend growth is just as important as having a high-yield. A company must be able to not only supply its dividend without issues, but grow it in pace with other companies, keeping it high. The following is a list of stocks that have generous dividends, and reasons why it’s not only safe, but should grow in the future.
Chevron (CVX, Financial)
Even though there will be an eventual rebound in oil prices, Chevron is taking it step by step. Its $22.8 billion capital budget is nearly unchanged from last year, mimicking similar budgets from rivals BP and Total. Even though it does not plan on increasing projects as fast as Exxon Mobil (XOM), it still has a long list of projects around the world, and has stated they will pounce on any promising opportunity to enhance its long-term growth strategy.
Over the last five years, they have increased their dividend by 12% annually. With a payout ratio of just 22%, their dividend is extremely safe, even if oil prices stay depressed for longer than expected. With an attractive yield and a promising future, expect this stock to outperform, unless a large rally occurs.
General Dynamics (GD, Financial)
General Dynamics has a good grip on the future of militaries around the world. They make the submarines, destroyers and littoral combat vessels that will be the basis of naval power in the 21st century. The produce highly advances armored vehicles to protect our troops from guerilla warfare. Needless to say, their market is extremely profitable and growing, no matter who is in power.
General Dynamics has been paying dividends since 1991. Sure, they haven’t increased their dividend every year, but they have been fairly consistent, raising their dividend ten-fold during that period. Even in this tough environment, General Dynamic has managed to increase its payout, with a measly payout ratio of 22%.
The company has also managed to grow its bottom line through a series of acquisitions, while managing to keep capital expenditures extremely low. It sports a debt load of a little over $3 billion, but at less than one-third of General Dynamic’s total equity, it shouldn’t be hard to manage debt payments through operating income alone.
Good Luck,
Ryan Vanzo
Disclosure: I hold no positions in any of the stocks listed in this article.
Also check out: (Free Trial)
