In terms of a higher dividend yield, the following stocks are thrashing the S&P 500 index, which granted 1.94% at market close on Aug. 16.
Sell-side analysts on Wall Street issued positive recommendation ratings ranging between hold and overweight, indicating the following securities are expected to continue to outperform.
The first company is GlaxoSmithKline PLC (GSK, Financial), whose shares closed at $40.19 on Friday with a market capitalization of $100 billion. The stock’s forward dividend yield of 4.62% was 268 basis points higher than the S&P 500 Index’s dividend yield. The industry median is 1.62%.
Based in the United Kingdom, the drug major has paid dividends since January 1985.
On Oct. 10, GlaxoSmithKline will pay a quarterly dividend of 46.4 cents per common share.
The stock has a price-earnings ratio of 18.72 versus the industry median of 19.18, a price-book ratio of 22.86 versus the industry median of 2.08 and a price-sales ratio of 2.61 compared to the industry median of 2.43.
The stock declined 3% over the past 12 months through Aug. 16. Shares are trading below the 200-, 100- and 50-day simple moving average lines. The 52-week range is $36.41 to $42.47.
GuruFocus assigned the company a financial strength rating of 4.1 out of 10 and a profitability and growth rating of 5 out of 10.
Wall Street issued an average target price of $41.60, reflecting 3.5% growth to hit within 52 weeks. Analysts recommend holding GlaxoSmithKline.
The 14-day relative strength index of 44 suggests the stock is neither oversold nor overbought.
The second company is Southern Co. (SO, Financial). The stock closed at $57.48 per share on Friday and the market capitalization was $60.08 billion.
The Atlanta-based regulated electric company has a forward dividend yield of 4.31%, which was 237 basis points higher than the S&P 500 Index’s dividend yield. The industry median is 3.39%.
Southern Co. has paid dividends since March 1986. On Sept. 6, the company will distribute a quarterly dividend of 62 cents per common share to shareholders of record as of Aug. 19. The ex-dividend date was Aug. 16.
The stock also has a price-book ratio of 2.21 versus the industry median of 1.43 and an enterprise value-Ebitda ratio of 9.38 compared to the industry median of 10.05.
Gaining 23% over the past 12 months through Aug. 16, the share price is above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $42.50 to $58.78 per share.
GuruFocus assigned a rating of 3.4 out of 10 for the company's financial strength and a 5 out of 10 rating for its profitability and growth.
Wall Street issued an average target price of $56.32 per share of Southern Co. Analysts recommend holding the stock.
The 14-day relative strength index of 55 suggests the stock is neither oversold nor overbought.
The third company is Veolia Environnement SA (VEOEY, Financial), whose shares closed at $24.33 on Friday with a market capitalization of approximately $13.48 billion. The forward dividend yield was 4.23%, or 229 basis points higher than the S&P 500 index’s yield and 117 basis points above the industry median of 3.06%.
The French provider of water, waste and energy management solutions to worldwide customers has paid annual dividends since April 2004.
Veolia paid an annual dividend of $1.02 per common share on May 31.
The stock also has a price-earnings ratio of 25.91 versus the industry median of 17.63, a price-book ratio of 2.22 versus the industry median of 1.44 and a price-sales ratio of 0.48 compared to the industry median of 1.09.
The stock climbed 18% over the past year through Aug. 16. The chart below shows the share price is above the 200- and 100-day simple moving average lines, but below the 50-day line. The 52-week range is $18.90 to $25.79.
GuruFocus assigned a rating of 4.1 out of 10 for the company's financial strength and a rating of 5 out of 10 for its profitability and growth.
Wall Street issued an average target price of $26.16 per share of Veolia Environnement, reflecting 7.7% upside from the closing share price on Friday. Analysts have an overweight recommendation rating for Veolia Environnement.
The 14-day relative strength index of 45 suggests the stock is neither overbought nor oversold.
Disclosure: I have no positions in any securities mentioned.
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