High-Yield Dividend Stocks to Bank On
Trust is hard to earn in the stock market, especially with all of the different factors going on that have led to a turbulent start to the year for investors. The strongest companies one week could be facing heavy selling pressure the next, which is why it can really pay off to take a long-term view when seeking out new investment opportunities at this time. One example of the type of stocks that long-term investors might want to consider is dividend stocks, which offer extra income and typically need to be financially stable companies in order to maintain their payments.
Some investors have mixed views on high-yield dividend stocks, and rightly so. On one hand, high-yielding stocks are attractive given their strong payouts relative to their share price, which is all the more appealing given the rising inflation we are seeing in the economy. On the other, a high-yield stock could mean that the company is in distress and that the share price has fallen substantially in response to internal issues or gloomy prospects. That’s why it’s important to do your homework on any dividend stock with a yield that seems too good to be true.
The good news is that we’ve done some of that hard work for you and put together a list of 3 trustworthy high-yield dividend stocks to buy now. Let’s take a deeper look at them below.
Exxon Mobil Corp (NYSE: XOM)
Energy stocks have been some of the best performers in the market to start the year, and a high-yielding dividend payer like Exxon Mobil Corp stands out as an intriguing potential buy even after the recent rally. With Brent crude oil prices hitting 7-year highs and supplies expected to remain tight due to geopolitical tensions, many analysts are expecting big things out of the energy sector in 2022. This bodes well for Exxon Mobil, which is the world’s largest publicly traded integrated oil company that looks like it is in good shape to continue paying out its dividend thanks to spending reductions and the potential for oil prices to remain elevated.
Exxon is also worth a look thanks to the company’s development of new oil and gas fields in Africa and the Permian Basin and its investment in low-carbon solutions. The stock currently offers investors a 4.9% dividend yield, and there’s a good chance that oil prices are due for a pullback in the coming weeks, which could be an interesting buying opportunity for those investors that have been waiting for an attractive entry point. The bottom line here is that Exxon Mobil
is a leading company in the energy sector with a management team that recognizes the importance of protecting its dividend payout, which is why the stock makes this list.
Lockheed Martin Corp (NYSE: LMT)
Another high-yield dividend stock that investors should be looking at right now is Lockheed Martin. The massive defense, security, and intelligence firm is one of the better bargains in the S&P 500 as its trading at a forward P/E of 16.59. It’s also worth trusting that the company’s dividend is safe considering the fact that Lockheed counts the U.S. government as its biggest customer, which means investors can count on stable earnings for the company. Defense contracts are awarded to companies with a long history of innovation and success, so Lockheed has a strong competitive advantage among peers given its industry-leader status.
The Senate Armed Services Committee has passed a 5% defense budget increase, which bodes well for Lockheed in the coming years, while global supply chain issues that have weighed on the company’s earnings should be easing up towards the back half of 2022. Lockheed
also has plans to acquire rocket propulsion builder Aerojet Rocketdyne in Q1 2022 for $4.4 billion, which could be a strong growth driver over the long term as it expands the company’s propulsion systems portfolio. Finally, the company recently boosted its quarterly dividend payout by 8% and offers investors an attractive 3.01% yield at this time, which is higher than the industry average.
International Business Machines (NYSE: IBM)
Last but not least, we have IBM, a legacy tech company with an impressive 4.89% dividend yield. International Business Machines has carved out a very important role in the global enterprise IT hardware, software, and services industry over the years and has recently made some intriguing strategic moves. The company completed a spinoff of its managed infrastructure operations, which should allow IBM to focus on the areas of the business with more growth potential such as hybrid cloud and artificial intelligence going forward.
There’s also plenty to like about the company’s cash position, which was $8.4 billion at the end of Q3 last year. While the spinoff might change the company’s balance sheet figures, that large cash balance from last quarter is still an impressive figure that should help dividend investors to feel more confident about adding shares of Big Blue. If you’re interested in a cloud stock with an attractive payout and holding up well amidst market volatility, look no further than IBM
Before you consider Exxon Mobil, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Exxon Mobil wasn't on the list.
While Exxon Mobil currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
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