Investing a thousand dollars currently? Consider these 3 Dividend Stocks that Present Solid Value Opportunities
In the current market, even though it's near its all-time highs, there are some stocks that have been temporarily discounted for savvy investors. Three such high-yielding stocks on sale rack include Vici Properties, Coca-Cola, and Hormel Foods. Let's dive into why these trio of dividend stocks are worth considering:
1. Vici Properties: A Focused, High-Yield, And Reliable Choice
REIT, Vici Properties, is majorly focused on experiential properties with a revenue focus on its casino assets. Despite the concentration risk, Vici sailed through the COVID-19 pandemic and even raised its dividend throughout that challenging period. With an average of over 40-year remaining rent term and 90% rent coverage by leases with Consumer Price Index (CPI)-linked rent increases, Vici offers a stake in a good sector with long-term protections. The concentration in the gaming industry combined with the tailwind of a growing economy has pushed the dividend yield to a robust 5.8%.
2. Coca-Cola: A Reliable Dividend Stock with Long-Term Growth Potential
One of the largest beverage companies globally, Coca-Cola, has a 62-year dividend streak with a stable and growing annual return. Despite its fairly-priced share cost with a yield of 3.1%, it's a great pick for conservatively-minded investors looking for a steady income stream. While the price-to-sales ratio and price-to-earnings ratio are lower compared to its 5-year average, Coca-Cola represents a reliable dividend stock worth considering for its steady income.
3. Hormel: A Historically High-Yield Turnaround Play
A long-term favorite dividend stock with a rich history, Hormel Foods brings a unique proposition as a Dividend King in the consumer staples space. Although the stock has experienced a decrease in price of around 15% from its 52-week high, it's currently trading with a historically high yield of 3.6%. With challenges such as passing rising costs on to consumers and weak regional markets, Hormel presents itself as a turnaround situation for long-term investors who are comfortable with near-term volatility.
Bottom Line
While the overall market is riding high, there are still attractive opportunities in the dividend space to consider. Each of Vici, Coca-Cola, and Hormel present their unique strengths and weaknesses. Whether you are a risk-averse investor or looking for a high-yield turnaround, these three dividend stocks offer compelling potential purchasing points.
Enrichment Data:
VICI Properties:- Interest Rate Concerns: Rising interest rates can intensify borrowing costs, making the REIT less attractive compared to risk-free Treasury yields, thereby impacting dividend yield expectations.- Industry-Specific Risks: The company's revenue mainly stems from its casino assets, making it vulnerable to regulatory shifts, economic downturns, and adversities within the gaming sector.- Uncertainty in REIT Markets: The markets' uncertainty due to fluctuating interest rates and uncertain credit conditions remain as key concerns for VICI Properties.
Coca-Cola:- Currency Fluctuations: The company is projected to witness a 3% to 4% cut in net revenues, attributable to currency fluctuations, affecting their comparable earnings growth.- Tariff Impacts: Coca-Cola faces rising costs due to tariffs, an example being the 25% tariff on aluminum imports, which can increase its input costs.- Market Sentiment: Market sentiment - shaped by economic policies, inflation, and interest rates – can greatly influence stock prices.
Hormel Foods:- Typical Factors: Price drops for Hormel Foods can be ascribed to factors such as changes in consumer preferences, competition, geopolitical concerns, and regulatory changes. Without adequate data sources, specific reasons cannot be pinpointed.
- Investors looking for protection against potential interest rate increases might consider Vici Properties, as its high-yield ratio suggests that it can withstand such increases due to its long-term lease agreements with CPI-linked rent increases.
- Despite the current market conditions, Coca-Cola's relatively low price-to-sales and price-to-earnings ratios, along with its 62-year dividend streak, could provide attractive opportunities for investors seeking a stable income stream.
- The temporary discount on Hormel Foods stocks, which currently offers a historically high yield of 3.6%, could provide a appealing opportunity for investors who are comfortable with near-term volatility in the consumer staples market.
- The concentration risk in Vici Properties' gaming industry and potential impact of tariffs on Coca-Cola's input costs are among the financial considerations that may warrant further investigation before making investment decisions.
