Dividend investors may want to consider the following securities as they are significantly outperforming the S&P 500 Index in terms of a higher dividend yield. The dividend paid by the benchmark for U.S.-listed stocks yields 1.84% as of Nov. 22.
Altria Group
Shares of American tobacco giant Altria Group Inc. (MO, Financial) closed at $49 on Friday for a market capitalization of $91.54 billion.
Based on the quarterly dividend of 84 cents that Altria paid on Oct. 10, a 5% hike from the previous distribution, the stock offers a forward dividend yield of 6.88% and a trailing 12-month dividend yield of 6.61% as of Friday.
The current dividend yield of Altria is high compared to its historical values, indicating that the tobacco stock is a profitable investment.
The share price is above the 30-, 70- and 120-day simple moving average lines, though it has traded lower so far this year, returning -1%.
The 52-week range is $39.3 to $57.88.
The 14-day relative strength index of 67 suggests that shares of Altria are neither overbought nor oversold.
The stock has a price-earnings ratio of 52.13 versus the industry median of 13.9 and a price-sales ratio of 4.63 compared to the industry median of 2.04.
GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a high rating of 8 out of 10 for its profitability.
Wall Street issued an overweight recommendation rating for Altria. This means that analysts predict the tobacco giant will perform so well over the next couple of quarters that its stock will either top that of the average competitor by a wide margin or the S&P 500. Shares have an average price target of $52.32 per unit, reflecting a nearly 7% rise.
Japan Tobacco
The second company is Japan Tobacco Inc. (JAPAF, Financial). Shares of the Tokyo-based tobacco company closed at $22.65 on Friday for a market capitalization of approximately $40.59 billion.
Based on the semi-annual cash dividend of 77 yen (70.85 cents) the company will pay per common share in March 2020, the stock grants a 6.05% forward dividend yield and a 3.15% trailing 12-month dividend yield as of Friday. The industry has a median of 5.63% for both the forward dividend yield and the trailing 12-month dividend yield.
As you can see from the chart below, the current dividend yield of Japan Tobacco is quite high when compared to its performance over the past several years. This indicates that the Japanese tobacco company is profitable.
The share price has fallen 3% so far this year, but it is still above the 120-, 70- and 30-day simple moving average lines.
The 52-week range is $20.30 to $26.58.
The 14-day relative strength index of 53 suggests the stock is neither oversold nor overbought.
The stock has a price-earnings ratio of 11.98 versus the industry median of 13.9 and a price-sales ratio of 2.04, which is in line with the industry median.
GuruFocus assigned a moderate financial strength rating of 5 out of 10 and a very positive profitability rating of 7 out of 10.
Wall Street issued an overweight recommendation rating for shares of Japan Tobacco and issued an average target price of approximately $24.66, representing a 9% increase.
Kraft Heinz
The third company is The Kraft Heinz Co. (KHC, Financial), the Pittsburgh-based international manufacturer and marketer of food and beverage products. Its stock closed at $30.54 per share on Friday with a market capitalization of $37.29 billion.
Based on the quarterly cash dividend of 40 cents per common share that Kraft Heinz will pay to its shareholders on Dec. 13, the stock grants a 5.23% forward dividend yield and 5.29% trailing 12-month dividend yield as of Friday.
The stock is near a one-year low, but the dividend yield remains high when compared to its historical values back until July 31, 2015. This heightened the possibilities that we are in the presence of a profitable security.
The share price has decreased 29% so far this year, but it is still above the 120-, 70- and 30-day simple moving average lines.
The 52-week range is $24.86 to $51.86 per share.
The 14-day relative strength index of 49 suggests the stock is neither overbought nor oversold.
The stock has a price-earnings ratio of -3.44 versus the industry median of 19.7 and a price-sales ratio of 1.41 compared to the industry median of 0.87.
GuruFocus assigned a moderate rating of 4 out of 10 for the company's financial strength and a positive rating of 6 out of 10 for its profitability.
Wall Street issued a hold recommendation rating for shares of Kraft Heinz and has established an average target price of $31.35 per share, reflecting 2.7% upside.
Disclosure: I have no positions in any securities mentioned.
Read more here:
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