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Alberto Abaterusso
Alberto Abaterusso
Articles (1556) 

3 High Forward Dividend Yield Stocks

These securities top the S&P 500 index

June 24, 2019 | About:

As of Friday, several securities were offering a forward dividend yield that more than doubled the S&P 500 index's yield of 1.86%. Thus, here is a list of three stocks that dividend investors may want to consider.

Further, the forward dividend yield of the following three stocks is – as of Friday – compelling relative to their historical values, meaning these three long-term dividend payers are seen as profitable investments.

The first company is the large U.S. bank Wells Fargo & Company (NYSE:WFC), with a closing share price of $46.89 and a market capitalization of $210.74 billion on Friday. The stock has a forward dividend yield of 3.84% versus an industry median of 3.16%.

Wells Fargo has continuously paid dividends for more than 45 years. The below chart from GuruFocus shows that the dividend yield of Wells Fargo is good as of June 21, so investing in this stock is profitable.

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Currently, the U.S. bank is paying a 45-cent cash quarterly dividend which, if held constant, means a forward annual dividend of $1.8 per common share.

The share price decreased 13% over the 52 weeks through June 21. It is trading below the 200- and 100-day simple moving average lines but still slightly above the 50-day SMA line. The 52-week range is $43.02 to $59.53.

The stock has a price-book ratio of 1.23 versus the industry median of 1.11 and a price-sales ratio of 2.63 compared to the industry median of 3.01.

GuruFocus assigned a rating of 4 out of 10 for the financial strength and of 3 out of 10 for the profitability and growth of the company.

Wall Street recommends to hold shares of Wells Fargo & Co. and has established an average price target of $51.76 per share, reflecting 11% upside from the share price at close Friday.

The 14-day relative strength index of 57 suggests the stock is neither oversold nor overbought.

The second company is China Mobile Ltd. (NYSE:CHL), whose shares closed at $45.36 on Friday for a market capitalization of approximately $186.04 billion. The forward dividend yield is 4.53% versus an industry median of 3.54%.

The Chinese telecom services company has regularly paid dividends since 1993, on a bi-annual basis. The below chart from GuruFocus signals that the dividend yield of China Mobile as of June 21 is good relative to its historical values. This means that China Mobile is a profitable investment.

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On July 8, China Mobile will pay to its common shareholders of record on May 24 a cash bi-annual dividend of 88.6 cents per share. The forward annual dividend is $2.055 per common share.

The share price increased 4% over the past year through June 21. The chart below also illustrates that the share price is below the 200, 100 and 50-day simple moving average lines. The 52-week range is $43.25 to $55.84.

The stock has a price-book ratio of 1.22 versus the industry median of 2.07 and a price-sales ratio of 1.74 versus the industry median of 1.5.

GuruFocus assigned a financial strength rating of 8 out of 10 and a profitability and growth rating of 7 out of 10.

Wall Street issued an overweight recommendation rating for shares of China Mobile with an average price target of $54.63 per share, reflecting 19.8% upside from the share price at close Friday.

The 14-day relative strength index of 52 suggests the stock is neither oversold nor overbought.

The third company is the French integrated oil and gas operator Total SA ADR (NYSE:TOT), with a closing share price of $55.37 and a market capitalization of $144.64 billion at market close on Friday.

The stock has a forward dividend yield of 5.15% versus an industry median of 5.35%.

Total SA has not missed a dividend payment since 1992. The chart below shows that the dividend yield that Total SA ADR grants as of Friday 21 is compelling compared to the historical values. Thus, purchasing shares of total SA ADR should be a profitable investment.

89314ac0-9672-11e9-a932-dd34474d7b39.png

Currently, the company pays a cash quarterly dividend of approximately 71.3 cents per common share, which means a forward annual dividend of $2.852 per common share.

The share price has fallen 8% for the 52 weeks through June 21 to below the 200- and 100-day simple moving average lines. It is slightly above the 50-day SMA line. The 52-week range is $49.70 to $65.69 per share.

The stock has a price-book ratio of 1.23 versus the industry median of 1.18 and an enterprise value-Ebitda ratio of 4.97 versus an industry median of 6.79.

GuruFocus assigned a rating of 6 out of 10 for the financial strength and a rating of 5 out of 10 for the profitability and growth.

Wall Street recommends to buy shares of Total SA ADR and forecasts an average price target of $68.15 per share, representing a 22% increase from the share price at close Friday.

The 14-day relative strength index of 61 suggests the stock is neither oversold nor overbought.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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