The economic cycle is the underlying driver of consumer cyclical companies’ performances. Companies such as V.F and Best Buy offer goods and services that are luxuries, instead of absolute necessities, such as entertainment and gambling. In periods of growth, consumers benefit from higher discretionary income which drives these companies’ profitability. Dividend payouts are, in turn, positively impacted by this growth which means these companies could provide opportune income through dividends. I’ve identify the following consumer cyclical stocks paying high income, which may increase the value of your portfolio.
V.F. Corporation (NYSE:VFC)
VFC has a good dividend yield of 2.68% and the company has a payout ratio of 66.19% . In the case of VFC, they have increased their dividend per share from $0.58 to $1.84 so in the past 10 years. To the enjoyment of shareholders, the company hasn’t missed a payment during this period. Analysts are optimistic on the company’s future earnings growth, estimating a 65.14% increase in the next three years.
Best Buy Co., Inc. (NYSE:BBY)
BBY has a good-sized dividend yield of 2.47% and pays out 33.78% of its profit as dividends , and analysts are expecting a 37.77% payout ratio in the next three years. The company’s dividends per share have risen from $0.52 to $1.36 since it started paying dividends 10 years ago. They have been reliable as well, ensuring that shareholders haven’t missed a payment during this 10 year period.
L Brands, Inc. (NYSE:LB)
LB has an appealing dividend yield of 5.11% and distributes 69.74% of its earnings to shareholders as dividends . Dividends per share have increased during the past 10 years, but there have been a couple hiccups. However, they have historically always picked up again.
For more solid dividend payers to add to your portfolio, you can use our free platform to explore our interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.