Three Outstanding Dividend Stocks Providing Yields Exceeding 6% Worth Considering in December
Three Outstanding Dividend Stocks Providing Yields Exceeding 6% Worth Considering in December
In recent years, the stock market has been on a rollercoaster ride, with the S&P 500 index soaring a monumental 57.1% since the close of 2022. Yet, finding high-yield dividend stocks within this bull run has become increasingly challenging. While the average stock in the S&P 500 index offers a paltry yield of just 1.2%, notable exceptions such as Pfizer (PFE -0.72%), W.P. Carey (WPC 0.07%), and Omega Healthcare Investors (OHI) offer dividend yields exceeding 6%. These three companies boast established businesses and robust strategies that ensure their dividends continue to rise with time, making them excellent additions to a well-diversified income portfolio for most investors.
Pfizer
A titan within the pharmaceutical sector, Pfizer is renowned for its patent-protected drugs that boast wide profit margins. The company's impressive run of increasing its dividend payout for 15 consecutive years is largely due to these lucrative medicines. In December 20XX, Pfizer boosted its dividend payout to $0.42 per share, delivering a staggering yield of 6.4% at the current price point. With another payout increase around the corner, investors can anticipate earning a 16th consecutive yearly increase.
Pfizer's management expects earnings to reach $2.85 at the midpoint of their guidance range for 20XX. This robust figure comfortably overshadows the $1.68 annual payout, providing ample wiggle room for further dividend hikes.
Despite the strong performance of Pfizer's top-sellers Xeljanz and Ibrance, these drugs have started to lose market share due to new competition. However, the company has a knack for developing new drugs to fill the gap, such as the nine blockbusters approved by the Food and Drug Administration in 20XX, which will bolster Pfizer's presence in the pharmaceutical industry for years to come.
W.P. Carey
W.P. Carey, a real estate investment trust (REIT), has faced tough times recently, focusing on net leases that transfer ownership costs to tenants. Despite the bumps in the road, such as a third-quarter earnings contraction and bankruptcy filing of one of its tenants, W.P. Carey continues to offer an appealing yield of 6.1% at recent prices.
W.P. Carey's largest tenant contributes only 2.7% of its annual rent stream, making it relatively easy for the company to replace lost income should the need arise. The REIT's management has closed deals worth nearly $1 billion since October 20XX, with another $500 million of deals expected by the end of the year. With this optimistic outlook, the payout set at $3.50 annually appears poised for a raise in the near future.
Omega Healthcare Investors
Omega Healthcare Investors, another net-lease REIT, operates nursing homes and assisted living facilities. Although the COVID-19 pandemic presented some challenges, Omega Healthcare has successfully maintained or raised its dividend payout since 2015. At current pricing, Omega Healthcare offers a lucrative yield of 6.6%, bringing a steady stream of passive income to investors.
The company's tenants have had a mix of successes and setbacks, such as LaVie Care Centers filing for Chapter 11 bankruptcy protection but also managing to make full rent payments from July 20XX to October 20XX. Despite these ups and downs, demand for nursing-facility beds remains steadily high, driven by an aging population.
While Omega Healthcare has managed to keep its payout at $2.68 annually, investors may want to monitor the company closely to see how recent developments impact its financial performance in the coming years.
In conclusion, Pfizer, W.P. Carey, and Omega Healthcare Investors offer attractive dividend yields and strong financial positions, making them ideal choices for income-seeking investors looking to diversify their portfolios. While Pfizer's high-margin drug portfolio and impressive dividend track record have driven its growth, W.P. Carey seems to have weathered recent challenges and is ready to capitalize on growth opportunities. Omega Healthcare Investors, with its steady dividend payout and solid tenant base, is well-positioned to continue delivering value to shareholders.
Investors looking to add high-yield dividend stocks to their portfolios might consider Pfizer, as its robust drug portfolio and consistent dividend increases have resulted in a yield of 6.4%. To maintain this high yield, Pfizer will likely increase its dividend payout again soon, continuing its streak of 15 consecutive years of dividend hikes.
Furthermore, W.P. Carey, a real estate investment trust (REIT), offers an appealing yield of 6.1%, despite facing challenges in recent times. The company's diverse tenant base and ongoing deal activities indicate a promising future, potentially leading to an increased dividend payout in the near future.