5 Growth Stocks That are Likely to Pay Solid Dividends
Growth investors are primarily focused on stocks with aggressive earnings or revenue growth, which should lead to higher stock prices. We often find small-cap stocks in this category because these are typically newer companies in the early part of their growth cycle. But we also find plenty of mid-caps and large-caps.
While, investors looking for income-producing stocks prefer those that have stable earnings growth and pay a solid dividend. These companies are typically more mature and no longer have the kind of spectacular growth rates like some of the smaller companies, or like they themselves had when they were earlier in their growth cycle.
Dividend-paying stocks make regular distributions to their shareholders, usually in the form of cash payments. Dividends can be a useful source of income as investors can make a profit without selling their shares.
This article is a blend of both investing styles. We will discuss five growth-and-income stocks that investors might want to consider.
With the help of the Zacks Stock Screener, we have selected stocks that have a Growth Score of A or B, and a dividend yield of greater than 3 percent. Each of our picks either carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
We recommend Canadian Natural Resources Limited CNQ, Gerdau S.A. GGB, ZIM Integrated Shipping Services Ltd. ZIM, Yara International ASA YARIY and EVRAZ plc EVRZF.
Canadian Natural Resources Limited: Headquartered in Calgary, Canadian Natural is a major oil and natural gas production company, with operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore Africa. The company’s diverse product mix provides it a competitive advantage, as it can allocate capital to the highest return projects without being dependent on any one commodity. Its efficient operations along with disciplined capital allocation help the company in generating substantial free cash flow, which delivers significant shareholder returns through dividends and share repurchases.
The Zacks Consensus Estimates for its current-year EPS indicates year-over-year growth of 1,085.4% against the industry’s figure of -1.6%. Canadian Natural has a Growth Score of B and a dividend yield of 4.5%. Year to date, the stock has gained 74.9%. CNQ is a Zacks Rank #2 stock.
Gerdau S.A.: Based in Sao Paulo, Gerdau is a Brazilian multinational and one of the main global long and special steel producers. It is the largest recycling company in Latin America, transforming 11 million tons of scrap yearly, accounting for 73% of the steel it produces. Its North American operations supply the agriculture, energy, industrial, automotive and manufacturing markets. The company has been benefiting from the positive trend in the steel industry and the portfolio of higher value-added products optimized by it over recent years.
The consensus estimates for its current-year EPS indicate year-over-year growth of 474.1% against the industry’s figure of -6.1%. Gerdau has a Growth Score of B and a dividend yield of 21.8%. Year to date, the stock has inched up 3.2%. GGB is a Zacks Rank #2 stock.
ZIM Integrated Shipping Services Ltd.: Headquartered in Haifa, Israel, ZIM is a leading global container liner shipping company. Its outstanding performance is a result of the team’s strong execution capitalizing on the highly attractive market and differentiated approach. The company has been allocating capital to enhance its commercial prospects and unlock shareholder value. It has a strong outlook and extremely positive container liner market fundamentals. It remains focused on executing its global-niche strategy to achieve superior long-term profitability while maintaining fleet flexibility.
The consensus estimates for its current-year EPS suggest year-over-year growth of 661.3% against the industry’s figure of -10.8%. ZIM has a Growth Score of A and a dividend yield of 18.6%. Since its IPO earlier this year, the stock has rallied 377.9%. ZIM is a Zacks Rank #1 stock.
Yara International ASA: Headquartered in Oslo, Yara provides environmental and industrial solutions in Norway and globally. Its leading food solutions and ammonia positions are well-placed to address business opportunities from global challenges, as the twin demands of increased resource efficiency and lower environmental footprint require transformations within agriculture and the hydrogen economy. The company’s market environment appears positive, with higher nitrogen prices globally reflecting strong demand and a tight supply situation.
The consensus estimates for its current-year EPS indicate year-over-year growth of 64.9% compared with the industry’s figure of 28.5%. Yara has a Growth Score of B and a dividend yield of 7.1%. Year to date, the stock has returned 22.6%. YARIY is a Zacks Rank #1 stock.
EVRAZ plc: Based in London, EVRAZ, together with its subsidiaries, produces and distributes steel and related products globally. It operates through four segments — Steel; Steel, North America; Coal; and Other Operations. The company has been benefiting from higher production volumes at EVRAZ North America. In fourth-quarter 2021, iron ore production volumes are expected to increase following the completion of repairs at EVRAZ KGOK’s burning furnaces and crushing complex.
The consensus estimates for its current-year EPS suggest year-over-year growth of 244.8% against the industry’s figure of -6.1%. EVRAZ has a Growth Score of A and a dividend yield of 4.9%. Year to date, the stock has appreciated 32.8%. EVRZF is a Zacks Rank #1 stock.
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Gerdau S.A. (GGB) : Free Stock Analysis Report
Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report
Yara International ASA (YARIY) : Free Stock Analysis Report
EVRAZ (EVRZF) : Free Stock Analysis Report
ZIM Integrated Shipping Services Ltd. (ZIM) : Free Stock Analysis Report
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