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5 High-Yield Dividend Stocks That Are Solid Buys in March

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Tirthankar Chakraborty
·5 min read
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U.S. stocks finished in the negative during the regular trading session on Mar 3 as a spike in bond yields took the steam out of the market rally. The 10-year Treasury Yield, in particular, jumped as high as 1.49% yesterday before slipping slightly. Lest we forget, the 10-year Treasury Yield touched a high of 1.6% last week.

In contrast, the broader S&P 500 and the Dow finished in the red, with the tech-laden Nasdaq dropping below the coveted 13,000mark. The index also notched its largest two-day percentage as well as point declines since Sep 8, 2020, per Dow Jones Market Data, as quoted in a MarketWatch article.

But why did the rise in bond yields spook stock investors? This is because an increase in bond yield easily reduces the attractiveness of stocks, especially growth-oriented ones, since they are perceived as riskier investments. Moreover, many are concerned that a rise in bond yields may compel the Fed to tighten monetary policy sooner than later, which certainly doesn’t bode well for stocks. After all, stocks have gained considerably for quite some time now on easy monetary policy since it helps in fuelling economic as well as job-market growth.

Nevertheless, it is also true that stretched valuations are impacting stocks at the moment, while a couple of discouraging economic data dampened investors’ confidence recently. Many anticipated the labor market to recoup this year following the harsh winter weather conditions. However, weaker-than-anticipated reading on private job additions indicated how hard it is for the US economy to recover jobs that have been lost due to the coronavirus pandemic vis-à-vis the strict shutdown measures imposed by the government.

As mentioned in a businessinsider article, per Automatic Data Processing, Inc.’s (ADP) monthly employment report, private payrolls in the United States increased by 117,000 last month, way less than analysts’ expectations of an increase of 200,000 payrolls.

Meanwhile, growth in the service side of the U.S. economy fell sharply last month, a tell-tale sign that the jobs market isn’t out of the woods yet. After all, it is the U.S. service sector, where most Americans work. The non-manufacturing index of the Institute of Supply Management came in at 55.3% in February, down 3.4% from January when service side activity almost touched a two-year high. Alarmingly, a sharp drop in new orders resulted in a much bigger-than-anticipated decline in the non-manufacturing index.

Such depressing developments, in fact, overshadowed optimism on the vaccine front. No doubt, the rate of vaccination has improved substantially in recent times. At the same time, the Biden administration’s $1.9-trillion coronavirus relief aid isn’t a done deal yet. The unemployment insurance part in the deal continues to remain a difference of opinion among the Democrats.

But amid all the hopelessness, one shouldn’t shun equities completely. In fact, one can invest in dividend payers without fretting over the stock market performance. This is because dividend payers are known for having sustainable business models and do have a long track of profitability. They are also unperturbed by market gyrations.

We have, thus, highlighted five such stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and provide high yields.

Alexanders, Inc. ALX is a real estate investment trust engaged in leasing, managing, developing and redeveloping properties. The company has a Zacks Rank #1. Alexanders has a dividend yield of 6.5%, while its five-year average dividend yield is nearly 5%. The company’s expected earnings growth rate for the current year is 22%.

Compass Diversified Holdings CODI was formed to acquire and manage a group of middle market businesses that are headquartered in North America. The company has a Zacks Rank #2. Compass Diversified has a dividend yield of 6%, while its five-year average dividend yield is 8.4%. The company’s expected earnings growth rate for the current year is 31.3%.

Exxon Mobil Corporation XOM explores for and produces crude oil and natural gas in the United States and internationally. The company has a Zacks Rank #2. Exxon Mobil has a dividend yield of 6.2%, while its five-year average dividend yield is almost 4.9%. The company’s expected earnings growth rate for the current year is 751.5%.You can see the complete list of today’s Zacks #1 Rank stocks here.

Lazard Ltd LAZ is one of the world’s major financial advisory and asset management firms. The company has a Zacks Rank #2. Lazard has a dividend yield of 4.6%, while its five-year average dividend yield is 4.4%. The company’s expected earnings growth rate for the current year is 10.8%.

Janus Henderson Group plc JHG is an investment management company. The company has a Zacks Rank #1. Janus Henderson Group has a dividend yield of nearly 4.9%, while its five-year average dividend yield is 4.8%. The company’s expected earnings growth rate for the current year is 15.3%.

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Lazard Ltd (LAZ) : Free Stock Analysis Report
 
Compass Diversified Holdings (CODI) : Free Stock Analysis Report
 
Janus Henderson Group plc (JHG) : Free Stock Analysis Report
 
Alexanders, Inc. (ALX) : Free Stock Analysis Report
 
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