7 High-Yield Dividend Value Stocks to Buy
Dividend stocks provide a reliable income stream.
While near-term fluctuations in the stock market can be unpredictable, dividends are one of the few reliable sources of market returns. Stocks with high dividend yields can serve as a great foundation for a long-term investment portfolio. One of the best places to start when identifying the best value stocks to buy is to look for companies with a track record of consistently boosting dividends over time. Here's a list of seven stocks to buy with solid dividend yields, attractive price-to-earnings ratios and strong dividend growth rates.
Comerica (ticker: CMA)
Comerica is a bank based in Michigan with more than 90% of its loans derived from commercial lending. Many of its loans are sensitive to interest rate changes, and that has weighed on CMA shares given the Federal Reserve has cut rates recently. But earnings are set to recover significantly in 2021 thanks in part to its payments and wealth management fee revenue. And as hopes of a broader economic recovery grow, shares of CMA have stabilized significantly since March's stock market sell-off. The stock currently yields 8.5%.
AbbVie (ABBV)
AbbVie is a biopharmaceutical company that offers drugs to patients worldwide. Its largest revenue generators include the anti-inflammatory treatment Humira, but the company's recent mega-buyout of Allergan for more than $60 billion ensures AbbVie has plenty of other potential products in the pipeline. With treatments that cover chronic conditions ranging from hepatitis to leukemia to HIV, ABBV can depend on steady sales to people who rely on these drugs, fueling steady dividend growth over time. ABBV currently yields 5.2%.
Interpublic Group of Companies (IPG)
Interpublic is one of the four largest advertising companies in the world. Shares softened up in early 2020 after the pandemic-inspired market sell-off, but this dividend payer is increasingly looking like a good value investment. Solid organic revenue growth, a steady acquisition strategy and an increasing focus on high-growth emerging markets and online advertising should pay off well in the months and years ahead. The stock currently yields 6.4%.
KeyCorp (KEY)
Regional bank KeyCorp has seen its dividends surge from 29 cents in 2015 to what will be 74 cents total by the end of 2020, even without another increase this year. Part of the reason for this growth is the company's 2016 acquisition of First Niagara, which helped add deposits as well as local market share. More importantly, the deal allowed KeyCorp to cross-sell its products. Subsequent acquisitions of technology-based companies HelloWallet and Laurel Road could turn into savvy long-term moves as well. KEY currently yields 7.3%.
Morgan Stanley (MS)
Despite the current capital market volatility, there's still a lot to like about Morgan Stanley. MS management has a track record of taking a conservative approach to expenses and guidance, and a long-term view on the business that helps see the investment bank through trouble spots. Despite falling interest rates, lower economic growth expectations and trade uncertainty, Morgan Stanley is projecting return on equity of as much as 15% through 2022, rising to as much as 17% after that. The stock currently yields 3.6%, whereas 10-year U.S. Treasurys yield around 0.7% today.
Eastman Chemical (EMN)
Tennessee-based Eastman is a specialty additives and materials company -- meaning it offers a host of custom chemicals used across the industrial sector. These include pigments and colorings, fungicides and herbicides and polymers and resins used in everything from windows to auto parts. Steady demand of this diverse array of products has helped the company's dividend surge from $1.66 paid out in 2015 to $2.52 per share in 2019. What's more, EMN still remains fairly valued with a forward price-to-earnings ratio of less than 11. The stock current yields 4.2%.
Valero Energy (VLO)
Oil refiner Valero is a remarkably stable investment in the energy sector right now, even as crude oil prices plummet in 2020. That's because the company sees input costs drop in kind as it refines this raw material into petrochemicals, such as gasoline for automobiles. Capital discipline initiatives have increased free cash flow generation in recent years, too, and recent history shows a commitment to dividend growth as annual payouts have surged by triple digits in the last five years. VLO currently yields 6.1%.
Top high-yield dividend value stocks:
-- Comerica (CMA)
-- AbbVie (ABBV)
-- Interpublic Group of Companies (IPG)
-- KeyCorp (KEY)
-- Morgan Stanley (MS)
-- Eastman Chemical (EMN)
-- Valero Energy (VLO)
More From US News & World Report
