Sure Dividend

Sure Dividend

Sure Dividend (https://www.suredividend.com/) is a newsletter and research service that focuses on finding high quality dividend growth stocks for the long run. The service tracks over 600 US stocks, assigning them dividend risk scores and conducting detailed fundamental analysis to pick out potential winners. Each month, The Sure Dividend Newsletter has 10 recommendations that you can use to build a diversified, dividend-paying portfolio.  https://www.suredividend.com/subscribe/
 
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Stocks: (MCD) McDonald’s, Johnson & Johnson (JNJ), Procter & Gamble (PG) - 3 Blue Chips For Safe Dividends

Sure Dividend Sure Dividend 24.06.2022 11:32
Investors are facing great challenges this year due to the surge of inflation to a 40-year high and the onset of a bear market. Not only have the portfolios of most investors bled due to the 22% decline of the S&P 500 this year, but the actual value of most portfolios has been eroding due to the surge of inflation. Blue Chips are great candidates for the portfolios of risk-averse, income-oriented investors, as they are likely to continue raising their dividends during the ongoing downturn while their stock prices are less volatile than the broad market in principle. In this article, we will discuss the prospects of three high-quality Blue Chips, namely Johnson & Johnson (JNJ), Procter & Gamble (PG) and McDonald’s (MCD), which offer safe dividends. Johnson & Johnson Johnson & Johnson is a diversified pharmaceutical giant. It was founded in 1886 and generates 49% of its sales from its pharmaceutical segment, 34% of its sales from medical devices and 17% of its sales from its well-known consumer products. Johnson & Johnson belongs to the best-of-breed group of Dividend Kings, with 60 consecutive years of dividend growth. It is well known for its consumer products but its pharmaceutical segment is by far the most profitable segment, as it generates approximately 75% of the earnings of the company. Johnson & Johnson has 28 brands/pharmaceutical platforms that generate more than $1 billion in annual revenues. The company has a dominant position in its markets, as it generates approximately 70% of its revenues from the Nr 1 or Nr 2 market share position. Moreover, Johnson & Johnson is the fifth-largest company in the U.S. and the eighth-largest company in the world in the amount spent on Research & Development (R&D). Thanks to its exceptional R&D department, the pharmaceutical giant has an admirable performance record. It grew its adjusted operational earnings for 36 consecutive years until 2020, when the pandemic caused a benign 7% decrease in its earnings per share. Despite the minor decrease in earnings in 2020, Johnson & Johnson has proved resilient throughout the coronavirus crisis. The company grew its earnings per share 22% in 2021, to a new all-time high, and has provided guidance for record earnings per share of $10.15-$10.30 in 2022, implying 4% growth at the mid-point. Overall, Johnson & Johnson is in a reliable long-term growth trajectory. The exceptional earnings growth record and the resilience of the company to downturns are the key factors behind its exceptional dividend growth streak. The stock is currently offering a 2.6% dividend yield, which is typical for this high-quality stock that attracts numerous dividend-growth investors. Given its solid payout ratio of 44% and its healthy balance sheet, Johnson & Johnson is likely to continue raising its dividend for many more years. Thanks to its rock-solid business model, the stock is a great candidate for the investors who seek resilience and low volatility in results and stock price during the ongoing bear market. Procter & Gamble Procter & Gamble is a consumer products giant that sells its products in more than 180 countries and generates approximately $76 billion in annual revenues. Its brand portfolio includes several well-known brands, such as Pampers, Luvs, Tide, Gain, Bounty, Charmin, Puffs, Gillette and Head & Shoulders. Procter & Gamble stagnated during 2011-2016 due to increased price sensitivity of consumers and a boom of private label products. The company was also negatively affected by numerous laggards in its brand portfolio, which were exerting a strong drag to its overall performance. Fortunately, Procter & Gamble implemented a drastic restructuring program and thus it managed to turnaround. It divested nearly two-thirds of its brands and thus got rid of the slow-growth, low-margin products while it maintained the ones with the widest margins and the strongest growth potential. In addition, thanks to the high-grading of its portfolio, Procter & Gamble was able to focus much more efficiently on its most promising brands. Thanks to its restructuring project, Procter & Gamble has returned to its multi-decade growth trajectory. It grew its earnings per share by 7% per year on average between 2016 and 2019 and accelerated its performance in 2020-2021 thanks to a strong tailwind from the pandemic, which forced people to spend much more time at home and thus increased their consumption of the products of Procter & Gamble. Thanks to the nature of its products and the strength of its brands, Procter & Gamble has always proved rock-solid during recessions and bear markets. Just like most companies, Procter & Gamble is currently facing a strong headwind due to the surge of cost inflation to a 40-year high. However, Procter & Gamble can pass its increased costs to consumers much more easily thanks to the unparalleled strength of its brands. It is thus one of the most resilient consumer products companies in the highly inflationary environment prevailing right now. Moreover, thanks to the consistent growth of its premium products and its expansion in international markets, Procter & Gamble has accomplished an exceptional dividend growth record. The company is a Dividend King, with 66 consecutive years of dividend growth. Moreover, due to its correction, along with the broad market, the stock is currently offering a 10-year high dividend yield of 3.7%. Given its reasonable payout ratio of 62%, which is in line with its historical average, and its resilient business model, Procter & Gamble can easily continue raising its dividend for many more years. McDonald’s McDonald’s is the largest foodservice retailer in the world, with more than 40,000 locations in over 100 countries and annual revenues of nearly $24 billion. Approximately 93% of the stores are independently owned and operated. McDonald’s has one of the strongest brands in the investing universe. The restaurant chain stagnated in 2014-2015 due to intense competition in its business and a somewhat obsolete menu. However, thanks to a change in management, the company managed to reignite growth by offering all-day breakfast and drastically improving its menu via the addition of healthier options. Thanks to its strong brand and its affordable menu offerings, McDonald’s has proved extremely resilient during recessions. In fact, the company proved one of the most resilient companies in the Great Recession. While most companies saw their earnings collapse in that crisis, McDonald’s kept growing its earnings and its dividend at a fast pace. As a result, the stock outperformed the S&P 500 by an impressive margin in the Great Recession and its shareholders never felt the impact of the worst financial crisis of the last 90 years. Thanks to its relentless expansion abroad and its resilience during recessions, McDonald’s has an impressive dividend growth record. The company has raised its dividend every single year since it initiated its dividend, in 1976. In other words, it has raised its dividend for 46 consecutive years. On the other hand, the stock is currently offering a nearly 10-year low dividend yield of only 2.3%. The poor yield has resulted primarily from the awareness of the investing community that McDonald’s is one of the most resilient companies during downturns. To be sure, the stock has declined only 9% this year, whereas the S&P 500 has plunged 22%. Overall, investors should rest assured that McDonald’s will easily endure a potential recession and the ongoing bear market. On the other hand, they should be aware that the market has already appreciated the resilience of this unique restaurant chain and hence the stock seems almost fully valued right now. Final Thoughts Investors are facing a perfect storm this year due to 40-year high inflation and a potential recession, which may be caused by the aggressive interest rate hikes of the Fed. During such tumultuous periods, most investors look for resilient companies, which will easily endure the downturn and will keep raising their dividends. The above three stocks undoubtedly fit this description. They have exceptional growth records thanks to their strong brands and have proved rock-solid during recessions. Investors should rest assured that these dividend stalwarts will continue raising their dividends for many more years.
Check Out These Oil Stocks! BP, (ENB) Enbridge, ONEOK (OKE) - 3 Dividend Oil Stocks With High Yields | Sure Dividend

Check Out These Oil Stocks! BP, (ENB) Enbridge, ONEOK (OKE) - 3 Dividend Oil Stocks With High Yields | Sure Dividend

Sure Dividend Sure Dividend 12.05.2022 17:46
By Aristofanis Papadatos for Sure Dividend Inflation has soared to a 40-year high this year due to the immense fiscal stimulus packages offered by the government in response to the pandemic. Consequently, income-oriented investors are struggling to protect their portfolios from losing real value. High-dividend stocks are great candidates for income-oriented investors under the current circumstances, though investors should perform their due diligence to make sure that the dividends of these stocks are safe. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM In this article, we will discuss the prospects of three high-yield stocks that benefit from high oil and gas prices, namely BP (BP), Enbridge (ENB) and ONEOK (OKE). BP BP is one of the largest oil and gas corporations in the world, with a market capitalization of $97 billion. It operates in two segments: upstream and downstream (mostly refining). BP has accumulated an excessive debt load, mostly due to its catastrophic accident in the Gulf of Mexico in 2010, which has cost the company approximately $70 billion so far. As this amount is 72% of the market capitalization of the stock, it is easy to understand its impact on the company. The high debt load of BP has also resulted from the extremely generous dividends of BP, which has maintained its shareholder-friendly character even under the most adverse business conditions. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Fortunately, BP is thriving right now. The price of oil has rallied to a 13-year high this year thanks to the recovery of global demand from the pandemic and the sanctions of western countries on Russia for its invasion in Ukraine. As Russia produces 10% of global oil output, the oil market has become extremely tight. A similar situation is evident in the natural gas market. European gas prices have skyrocketed to all-time highs in recent months due to tight supply from Russia, which provides approximately 40% of natural gas consumed in Europe. In addition, Europe has begun to import LNG cargos from the U.S. aggressively in an effort to shift away from Russia and thus the U.S. natural gas market has become extremely tight. As a result, the U.S. natural gas price has surged to a 13-year high. The above conditions are ideal for BP, which is highly leveraged to the prices of oil and gas, especially given its high debt load. Thanks to its excessive profits in the current environment, BP has been reducing its debt load at a fast pace in recent quarters and thus it has added another growth driver, namely lower interest expense. In the most recent quarter, BP more than doubled its earnings per share, from $0.78 in last year’s quarter to $1.92, and exceeded the analysts’ consensus by an impressive $0.55 (40%). The earnings per share of BP were the highest of the company in the last decade. Moreover, as the sanctions are not likely to be removed anytime soon, BP is expected to post 10-year high earnings this year. BP cut its dividend by 50% in 2020 due to the impact of the pandemic on its business but it is still offering an attractive 4.4% dividend yield. The company has a payout ratio of only 27%, which provides a wide margin of safety to the dividend. BP raised its dividend by 4% last year and stated that it can continue raising its dividend by 4% per year until 2025 as long as the price of oil remains above or around $60. BP also expects to be able to repurchase approximately $1.0 billion of shares per quarter. As this buyback rate corresponds to a 4% annual reduction of the share count, it provides a meaningful boost to the bottom line. Read next: (TSLA) Tesla Stock Prices Facing Trouble Amidst Rising Prices| FXMAG.COM Overall, as long as oil prices remain above $60, BP will continue offering excessive shareholder distributions, namely a 4.4% dividend that will grow by 4% per year, and meaningful share repurchases. On the other hand, investors should be aware that the stock of BP is likely to come under pressure whenever the war in Ukraine comes to an end. Enbridge Enbridge is a midstream oil and gas company, which is headquartered in Canada and operates in four segments: Liquids Pipelines, Gas Transmission, Gas Distribution and Green Power. These segments generate 53%, 29%, 13% and 5%, respectively, of the total EBITDA of the company. Enbridge is an immense midstream company. Through its vast pipeline networks, the company transports approximately 25% of North America’s crude oil and 20% of the natural gas consumed in the U.S. It is also the largest distributor of natural gas in the U.S. by annual volumes. Most companies in the energy sector are highly cyclical due to the wild swings of the prices of oil and gas. This is not the case for Enbridge, which has one of the most resilient business models in the sector. Enbridge has a toll-like, fee-based model, which involves charging fees to customers for the products they transport through the pipeline networks of Enbridge. The contracts have minimum-volume requirements and hence Enbridge enjoys reliable cash flows even during downturns, when its customers transport lower volumes than usual. Enbridge greatly benefits from the aforementioned favorable prices of oil and gas. The company expects to grow its distributable cash flow per share by about 8% this year, from $3.91 to a new all-time high of $4.21. On the other hand, due to its defensive business model, Enbridge benefits less than most oil companies during boom times. Overall, Enbridge is one of the most resilient energy companies during downturns but it has less upside than most of its peers during boom times. Enbridge has grown its dividend (in CAD) for 27 consecutive years, at a 10% average annual rate. It is also offering an attractive 6.3% dividend yield. The company has a healthy payout ratio of 64% and is likely to continue growing its distributable cash flow thanks to a series of growth projects, which are related to the expansion of its network. Therefore, the stock is offering an above-average 6.3% dividend, which is likely to keep rising for many more years. ONEOK ONEOK engages in the gathering and processing of natural gas, it provides services in the business of natural gas liquids (NGLs) and owns natural gas pipelines (interstate and intrastate). ONEOK has a 40,000-mile network of NGLs and natural gas pipelines and provides midstream services to producers, processors and customers. Its assets are ideally positioned in the major shale basins, Permian and Bakken. More than 10% of the total U.S. natural gas production goes through the network of ONEOK. ONEOK has a volatile performance record but it has greatly improved its performance in the last four years thanks to the completion of a series of growth projects, such as pipelines and fractionation services in the Permian Basin, and the significant contribution of these projects to the cash flows of the company. ONEOK is currently offering a 6.1% dividend yield. The company had a high payout ratio in 2020 due to the impact of the pandemic on its business but it is on track to post record distributable cash flow per share this year thanks to the favorable commodity prices and the recovery of the U.S. gas production. As a result, ONEOK currently covers its dividend with a wide margin of safety, with a healthy payout ratio of 68%. It is also worth noting that a significant portion of the cash flows of ONEOK are fee-based or hedged. This means that ONEOK is more defensive during downturns than most energy companies. On the other hand, the business model of ONEOK is less resilient than the model of Enbridge. Final Thoughts The energy sector is by far the best-performing sector of the stock market this year, mostly thanks to the 13-year high prices of oil and gas, which have resulted from the sanctions of western countries on Russia. Despite the breathtaking rally of the energy sector, there are still energy stocks that offer markedly high dividend yields. The above three stocks offer exceptionally high yields with a wide margin of safety. Nevertheless, investors should be aware of the material downside risk of the entire energy sector whenever its next downcycle begins.
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Monthly Dividend Stocks You Should Check Out! ORC Stock, AGNC Stock And AVAL

Sure Dividend Sure Dividend 01.04.2022 17:44
Many investors own equities in order to generate reliable income in an environment where treasuries and other fixed-income investments do not offer attractive yields. Stocks that offer monthly dividends can be especially attractive for income generation purposes, as that allows for more regular reinvesting for those that do not need the income now. Those that want to live off their dividends benefit from very regular, non-fluctuating proceeds on a month-to-month basis. In this article, we'll highlight the top three of the monthly dividend stocks from our coverage universe. 1: Orchid Island Capital Orchid Island Capital (ORC) is a mortgage real estate investment trust (mREIT). The company is valued at $600 million today, trading for slightly above $3 per share. Orchid Island Capital is externally managed, by Bimini Advisors. Generally, externally managed REITs are somewhat inferior compared to internally managed REITs due to a less competitive cost structure. But at the right price, externally managed REITs can still be a strong investment. Orchid Island Capital primarily invests in residential mortgage-backed securities, or RMBSs. This business has been quite profitable for Orchid Island in the recent past. During the most recent quarter, ORC generated net profits of $26 million, or more than $100 million on an annualized level. The company is sharing these strong profits with its owners. The current dividend stands at $0.045 per share per quarter. This makes for a dividend yield of 16% at the current share price. It should be noted that the dividend was reduced by 18% in March, prior to that, the dividend stood at $0.055 per month. Dividend reductions generally aren't positive, but since the yield is still very high, investors buying at current prices will likely still be happy with the result. In fact, even if Orchid Island Capital were to cut its dividend by another 18%, the dividend yield would still be pretty high, at 13%. We do not expect meaningful earnings growth from Orchid Island Capital. A flattening yield curve generally puts pressure on the earnings growth of mREITs, and in 2022 yield curves have compressed meaningfully so far. But even without any earnings growth, Orchid Island Capital could generate compelling total returns, thanks to its high dividend yield. Between some book value growth, some multiple compression, and its 16% dividend yield, we believe that Orchid Island Capital could easily deliver double-digit returns going forward. 2: AGNC Investment Corp. AGNC Investment (AGNC) is another mortgage REIT. With a market capitalization of $7 billion, it is considerably larger than ORC, however. AGNC Investment primarily owns agency mortgage-backed securities. Agency MBS are those created by Ginnie Mae, Fannie Mae, and Freddie Mac. Most of the MBSs AGNC Investment owns are comprised of mortgages with a 30-year maturity period, while counterparties for AGNC primarily are located in the US, with some exposure to European counterparties on top of that. Compared with some other mREITs, the long maturity period and agency nature of most of AGNC's MBSs makes AGNC Investment's portfolio less risky. Like Orchid Island Capital and other mREITs, AGNC will likely feel some headwinds from a flattening yield curve. The spread between the short-term rate at which AGNC borrows and the longer-term rate at which it lends compresses when the yield curve flattens, which leads to lower profitability, all else equal. Due to portfolio growth, AGNC could be able to offset these headwinds, however. We nevertheless calculate with a growth rate of zero. Even in that scenario, AGNC Investment looks like a solid income pick. The company currently yields 10.8%, based on a dividend of $0.12 per share per month. The dividend has been at that level for around two years, following a dividend reduction in early 2020. We do not believe that the dividend will grow going forward, as earnings growth will not be meaningful, and since AGNC Investment has not increased its dividend in a long period of time. Even without any dividend growth, payouts to investors will be attractive, thanks to a high initial yield. Between the yield of close to 11% and some multiple expansion potential, we believe that returns could easily be in the double-digit range going forward. 3: Grupo Aval Acciones y Valores S.A. Grupo Aval Acciones y Valores S.A. (AVAL) is a Colombian holding company. Its main assets include equity stakes in several banks, such as Banco de Bogota or Banco Popular. The holding company is majority-owned by one of Colombia's richest persons, Louis C. Sarmiento, who owns around 80% of AVAL. Being a Colombian company, AVAL makes its dividend payments in Colombian Pesos. For US-based investors, the size of the dividend thus fluctuates to some degree, as the COP/USD exchange rate impacts dividends once translated to US Dollars (the same holds true for other non-Colombian shareholders). AVAL has been making monthly dividend payments since 2014, i.e. for about eight years. Grupo Aval has not been able to grow its earnings-per-share reliably in the past. Instead, earnings-per-share moved up in some years, and down in other years. To some degree, this can be explained by the ups and downs in the Colombian economy over the last decade. The Colombian economy is quite exposed to commodity pricing around the world, as Colombia is an oil-exporting country. Other commodities that are exported from Colombia include agricultural products such as coffee and fruits, and metals and steel. With commodity prices rising rapidly in 2021 and early 2022, the Colombian economy should be in a good position this year. This should have a positive impact on the business environment for the banks that AVAL owns equity stakes in. In turn, this should lead to improving profitability for AVAL, which is why we believe that profits over the next couple of years will be higher compared to what we saw over the last couple of years. We forecast that AVAL's earnings-per-share will rise at a low-to-mid-single digits rate going forward. On top of that, investors should also benefit from some multiple expansion in the coming years, as AVAL is rather inexpensive today, trading for just 5x-6x its expected net profits. Add a dividend yield of around 6%, and it seems likely that AVAL will offer total returns of at least 10% annually going forward.
3M Stock (MMM), ABM Industries Incorporated (ABM) And Stanley Black And Decker, Inc. (SWK) Are In Focus In Monthly Top 3 Dividend Kings

3M Stock (MMM), ABM Industries Incorporated (ABM) And Stanley Black And Decker, Inc. (SWK) Are In Focus In Monthly Top 3 Dividend Kings

Sure Dividend Sure Dividend 24.02.2022 07:23
The Top 3 Dividend Kings Now Investors looking for the best place to put their hard-earned capital would do well to consider those companies that have the longest dividend increase streaks. There are plenty of lists and groups to categorize companies with dividend increase streaks, but the best of the best in terms of dividend longevity is certainly the Dividend Kings. This is a group of just 40 stocks that have all increased their dividends for at least 50 consecutive years, making them truly in a class of their own on that measure. These companies have stood the test of time in terms of economic conditions and competitive threats to produce reliable earnings growth. Importantly, that earnings growth is shared with shareholders via rising dividends over time. In this article, we’ll take a look at three Dividend Kings we like today for their dividends and long-term total return potential. Our first stock is ABM Industries, a company that provides integrated facility solutions primarily in the US, but it operates internationally as well. The company operates a number of segments, and through those it provides janitorial, facilities engineering, parking, custodial, landscaping, vehicle maintenance, and mechanical and electrical services. ABM was founded in 1985, employs 124,000 people globally, generates $7.5 billion in annual revenue, and trades with a market cap of $2.9 billion. ABM’s dividend streak stands at 54 years, but the combination of strong earnings growth and relatively smaller dividend increases has produced a payout ratio of just 23% for this year. That gives ABM exceptional dividend safety, particularly since it’s actually fairly recession resistant. ABM operates mostly essential services, so recessions have some impact on earnings, but for instance, the 2020 recession actually saw higher earnings year-over-year. The current yield is 1.8%, about 0.5% better than that of the S&P 500. We expect 5% earnings-per-share growth in the coming years, which we see as driven mostly by revenue growth, with the small potential for margin gains. ABM doesn’t buy back stock in any sort of meaningful quantity. The stock trades for just 12.5 times this year’s earnings estimates, which is nearly the lowest valuation the stock has had at any point in the past decade. It is also well under our fair value estimate of 17.5 times earnings. That could provide a nearly-7% tailwind to total returns in the coming years should it revert to that valuation. That puts total return potential at a very impressive 13.5% for ABM, which is why we rate it a buy. 3M Company (MMM) 3M is an engineering company that operates globally, providing consumers and businesses with an enormous variety of thousands of largely disposable products. 3M offers abrasives, autobody repair solutions, hygiene products, masks, packaging materials, respiratory, hearing, eye and fall protection, and much more. The company was founded in 1902, employs 95,000 people worldwide, generates $37 billion in annual revenue, and trades for a market cap of $84 billion. 3M’s dividend streak is world-beating at 63 years, putting it in rare company even among the Dividend Kings. The company’s payout ratio has climbed in recent years, but still remains below 60%. Given 3M’s recession resistance and reliable earnings, that is plenty safe in our view. The current yield of just over 4% is exemplary as well, more than tripling that of the S&P 500. Combined with the safety of the dividend, 3M is truly an outstanding income stock. We see 5% earnings growth in the years to come, which we see as attributable to higher revenue, roughly flat margins, and a small tailwind from share repurchases. The stock trades for 14.4 times this year’s earnings, which is well below our fair value estimate of 19 times earnings, which could provide a total return tailwind of almost 6% annually. In concert with the yield and earnings growth, that could see 3M producing 13.8% total annual returns in the coming years. Stanley Black & Decker, Inc. (SWK) Our final stock is Stanley Black & Decker, a company that designs, manufactures and sells a wide variety of products in the power tools, storage, and security businesses worldwide. The company’s brands include its namesake Stanley and BLACK + DECKER marques, as well as a wide variety of others. It offers products such as power tools, pneumatic tools, fasteners, lawn and garden products, commercial and residential security systems, and more. Stanley Black & Decker was founded in 1843, but has undergone major transformations since then through mergers and acquisitions. Today, it employs 60,000 people, generates $19.5 billion in annual revenue, and trades for a market cap of $26 billion. The dividend streak stands at 54 years, and terrific earnings growth in recent years has put the payout ratio at just 26%. Like the others on this list, the dividend is exceptionally safe and provides a very long runway for dividend increases in the years to come. The current yield is 2%, so Stanley Black & Decker remains a solid income stock when compared to the S&P 500’s yield of 1.3%. In addition, we see 8% earnings growth in the years to come, which will mostly be driven by revenue increases. The company has proven its ability over time to produce strong organic sales growth, in addition to its periodic acquisitions. We also expect a small measure of share repurchases to help boost earnings on a per-share basis. We see fair value at 16.5 times earnings, but shares trade today at just 13 times this year’s earnings. That means we could see a nearly-5% annualized return from the valuation alone. Combined with 8% earnings-per-share growth and the 2% yield, we see total returns at a very robust 14.8% in the years ahead. Final Thoughts We see the Dividend Kings as one of the best places to start a search for one’s next dividend stock purchase. The group has exceptional dividend reliability and longevity, but not all are created equal. The three we’ve highlighted here – ABM, 3M, and Stanley Black & Decker – all offer very low valuations, good yields, and long growth runways. Because of these characteristics, we see total return potential well into the double-digits for all three, and rate all of them a buy.
Leggett & Platt, Incorporated (LEG) - One Of The Top 3 Dividend Aristocrats Right Now

Leggett & Platt, Incorporated (LEG) - One Of The Top 3 Dividend Aristocrats Right Now

Sure Dividend Sure Dividend 13.01.2022 18:15
Our Top 3 Dividend Aristocrats Right Now Investors looking for dividend longevity and safety could begin their search with the Dividend Aristocrats. This is a select group of just 65 stocks that are components of the S&P 500, and have increased their dividends for at least 25 consecutive years. The Dividend Aristocrats have proven their ability to reward shareholders with excess cash through good times and lean times, but not all are created equal. In this article, we’ll examine our three favorite Dividend Aristocrats right now, based on their strong business models, growth catalysts, and high expected returns. Our first Dividend Aristocrat is Leggett & Platt, a manufacturer of engineered components worldwide. The company specializes in products such as bedding, furniture, flooring, and textiles. It was founded in 1883, generates about $5 billion in annual revenue, trades with a $5.6 billion market capitalization, and recently joined the list of Dividend Kings. Leggett’s competitive advantage is one of scale, mostly, given it operates in a somewhat commoditized business. Leggett has been able to grow its product portfolio into a deep and wide assortment of niche components that have little competition, and it has acquired its way to even more scale over the years. The company grew its earnings-per-share by a very robust 14% annually from 2009 to 2019, but that was on a very low base coming out of the Great Recession. We see the long-run growth rate at 5% annually, which we believe it can achieve through a combination of organic sales gains, acquisitions, and share repurchases. We note that Leggett’s earnings are cyclical and can suffer during recessions, so an economic downturn would likely derail that growth story, at least temporarily. That said, the company has managed to increase its dividend for 50 consecutive years, even during recessions, which indicates its high dividend safety. Leggett’s total expected returns come in at 9.3%, which is comprised of 5% estimated earnings growth, the current 4% dividend yield, and a small change from the valuation. The stock trades at 15.3 times earnings, which is just below our estimate of fair value at 16 times earnings. The stock has pulled back in recent weeks, which has improved the value proposition for buyers today. Archer-Daniels-Midland Company (ADM) Our next Dividend Aristocrat is Archer-Daniels-Midland, a company that procures, transports, stores, processes, and sells agricultural commodities globally. The company sells feed, oilseeds, grains, food ingredients, oils, and much more. Archer-Daniels-Midland was founded in 1902, generates about $82 billion in annual revenue, and trades with a market capitalization of $39 billion. The company’s dividend increase streak is nearly as long as Leggett & Platt’s at 46 years. The company’s primary competitive advantage stems from its very long operating history – which has built industry-leading brand recognition and expertise – but also in scale. Archer-Daniels-Midland sells commodities, so scale is everything, and the company has it. Because it sells commodities that are generally non-discretionary in nature, its recession resistance is quite good. We currently expect the company’s earnings to grow at 6% annually in the coming years, which would be attributable to a combination of slightly higher revenue, better profit margins, and a small measure of share repurchases. We note that Archer-Daniels-Midland has chosen acquisitions over share repurchases, and that’s certainly a possibility in the near future as well. Total returns are expected to be 8.7% annually for the foreseeable future. We see a combination of 6% expected growth, the 2.1% dividend yield, and a small tailwind from the valuation to drive returns to shareholders. Shares are reasonably priced today, going for 14.3 times earnings against our estimate of fair value at 15 times earnings. This, despite the fact that the stock has rallied strongly in the current environment of inflationary worries, and the stock having hit a new all-time high. Becton, Dickinson and Company (BDX) Our final stock is Becton, Dickinson and Company, which manufactures and sells medical supplies, medical devices, lab equipment, diagnostic products, and other related products. It sells to healthcare institutions, physician offices, researchers, laboratories, pharmaceutical companies, and consumers globally. Becton was founded in 1897, generates just under $20 billion in annual revenue, and trades with a market capitalization of $75 billion. The company also has a 50-year streak of dividend increases. Competitive advantages are tough to come by in the sector where Becton competes, mostly because the one-time-use products and other equipment the company sells are highly commoditized. However, the company helps differentiate itself with its more specialized diagnostic products and medical devices. Still, investors should be aware competitive advantages in this sector are more difficult to achieve. The company has shown impressive earnings growth in the past, and we expect that to continue. We see 10% annual earnings-per-share growth accruing in the coming years, stemming from a combination of organic sales growth, acquisition-driven top line gains, and modest share repurchases. Becton is definitely more of a revenue growth story, which it produces on its own, but it has also proven willing and able to acquire its way to growth. The company’s diagnostic business saw a sizable spike from COVID-19, but that has begun to wane. Still, we see its strong portfolio of diagnostic products as helping to drive growth in 2022 and beyond, after COVID-19 conditions have somewhat normalized. Total projected returns are 8.5%, which we see as being driven by a combination of strong 10% earnings-per-share growth, the relatively modest 1.3% dividend yield, and a headwind from the valuation. Shares go for 21 times earnings against a fair value estimate that is below 19 times earnings, so we see the stock as having gotten ahead of earnings growth slightly. Final Thoughts The Dividend Aristocrats offer a terrific starting point for an income investor looking for a high-quality dividend stock. All Dividend Aristocrats have proven their ability to generate reliable cash flows and return them to shareholders in growing amounts every year, irrespective of economic conditions. However, the three we’ve identified here – Leggett & Platt, Archer-Daniels-Midland, and Becton, Dickinson – have superior fundamentals to the rest of the group. All three Dividend Aristocrats offer strong total annual returns, dividend increase streaks of at least 46 years, reasonable valuations, and favorable growth outlooks.
High-Yield Dividend King: Altria Group, Inc. (MO)

High-Yield Dividend King: Altria Group, Inc. (MO)

Sure Dividend Sure Dividend 16.12.2021 15:19
The 3 Highest-Yielding Dividend Kings Now By Josh Arnold for Sure Dividend Income investors are faced with many choices when it comes to selecting the stocks they wish to hold in their portfolio. These choices include high current yield, dividend growth potential, dividend safety, dividend longevity, and more. However, there are certain stocks that possess more than one of these qualities. It is the intersection of these characteristics where we believe we find the best dividend stocks. One place we like to start is with the Dividend Kings, a group of just 35 stocks that have increased their dividends for at least 50 consecutive years. This longevity implies these companies all have sustainable competitive advantages, as well as exemplary recession resistance. These 3 Dividend Kings have each raised their dividends for over 50 consecutive years, and are currently the highest-yielding Dividend Kings today. Our first stock is Altria, a manufacturer and distributor of cigarettes, oral tobacco, and more. The company sells the very famous Marlboro brand of cigarettes, Black & Mild cigars, and chew tobacco under the Copenhagen, Skoal, Red Seal, and Husky brands. Altria was founded in 1822, employs about 7,000 people, generates $21 billion in annual revenue net of excise taxes, and trades with a market capitalization of $83 billion. The company’s dividend increase streak stands at 52 years. Altria’s dividend yield is currently 7.9%. Altria reported its most recent earnings for the third quarter on October 29th, 2021, and results were weaker than expected on both the top and bottom lines. Total revenue was off 4.7% from the year-ago period, coming to $6.8 billion before excise taxes, which was entirely due to smokeable product revenue declining 5.4%. Earnings-per-share came to $1.22 on an adjusted basis, which was actually slightly higher than the $1.19 from last year’s comparable period. Management announced it repurchased 6.7 million shares during the quarter, and boosted its existing buyback authorization to try and offset declining volumes. Our estimate for this year now stands at $4.62 for earnings-per-share. Altria’s recession resistance is outstanding given its products are literally addicting to the company’s customers. Tobacco products in general hold up very well during recessions because even consumers on the margin prioritize tobacco. This affords Altria stable and predictable cash flows irrespective of economic conditions, which it has used over the past five decades to consistently increase its dividend payment. We expect a 78% dividend payout ratio for this year, which is quite comfortable for a tobacco company. More cyclical companies would like see a dividend cut during a recession with that kind of payout ratio, but tobacco stocks – including Altria – see minor impacts to earnings during tough economic periods. Therefore, we see that payout as safe under any reasonable recession scenario. High-Yield Dividend King: Universal Corporation (UVV) Our next stock is Universal, a company that processes and supplies leaf tobacco and plant-based ingredients to manufacturers worldwide. Unlike Altria, Universal doesn’t actually sell finished product to wholesalers; it is further down the supply chain and produces what amount to ingredients to create final products. This still ties Universal’s fortunes very closely with those that do sell the final products, but Universal isn’t beholden to a single brand name or product succeeding for this reason. Universal was founded in 1886, employs 9,000 people, generates $2 billion in annual revenue, and trades with a market capitalization of $1.2 billion. Universal’s dividend increase streak is currently 50 years. In addition, its dividend yield stands at 6.1%. Universal’s most recent earnings were reported on November 3rd, 2021, and results were strong compared to the same period a year ago. Total revenue came to $450 million, which was 22% higher than last year’s Q2, and gained 16% for the first half of the year. Last year’s comparable period was heavily impacted by the pandemic, but those conditions have normalized, resulting in what is certainly an unsustainable level of sales growth. Earnings-per-share came to 66 cents on an adjusted basis in Q2, which puts first half earnings at 96 cents per share. We currently expect $4.40 in earnings-per-share in fiscal 2022. Universal doesn’t face a huge amount of competition given its industry has been in decline for many years. As the demand for cigarettes and other tobacco products continues to wane, the need for tobacco leaf wanes as well. That means new entrants aren’t attracted to compete with Universal, and that means the need for constant investment doesn’t exist. Universal, therefore, has strong cash flows it can return to shareholders. The payout ratio stands at 71% for this year, which we find to be quite safe given the company’s stable earnings. We don’t see a huge amount of payout growth on the horizon given the structural challenges a tobacco leaf provider faces, but for the foreseeable future, we think Universal’s dividend will be reliable. High-Yield Dividend King: Northwest Natural Holding Company (NWN) Our final stock is Northwest Natural, a regulated natural gas utility based in Oregon. The company serves 2.5 million natural gas customers in 140 communities. It was founded in 1859, employs 1,200 people, generates about $830 million in annual revenue, and its market capitalization is $1.4 billion. Northwest’s dividend increase streak stands at 66 years, and its current yield is 4.2%. The company reported its most recent results on November 5th, 2021, and results were well ahead of expectations on both the top and bottom lines. Northwest reported revenue that grew 8.7% year-over-year to $101 million during the seasonally weak quarter. Northwest also added 12,000 new metered connections, and reaffirmed guidance for $2.40 to $2.60 in earnings-per-share for this year. Like other regulated utilities, Northwest enjoys what amounts to a monopoly in its service area. This allows it pricing power and high margins, as well outstanding recession resilience. That helps dividend safety, which we give the highest marks to Northwest for given its 66-year dividend increase streak. The payout ratio stands under 80% for this year, and we see that as plenty safe given the utility’s very stable and predictable earnings profile. Final Thoughts Investors with capital to invest today would do well to start with the Dividend Kings when making a dividend stock investment. We like the Dividend Kings for their inherent recession resistance, and dividend longevity. However, Altria, Universal, and Northwest Natural offer those benefits in addition to very strong current dividend yields.
Why Investors Should Consider Quality Dividend Stocks

Why Investors Should Consider Quality Dividend Stocks

Sure Dividend Sure Dividend 01.02.2021 08:42
Investors can buy stocks that fall into a wide variety of categories. There are growth stocks, which represent companies that are quickly expanding their businesses and reporting high revenue and/or earnings-per-share growth. Then there are value stocks, typically those with low stock valuations, as measured by various ratios such as price-to-earnings or price-to-sales. Finally, there are dividend stocks, which are companies that distribute cash to shareholders through periodic dividend payments. We believe investors looking for superior long-term returns should focus on the best dividend growth stocks, which are companies that offer the best of both worlds. The best dividend growth stocks, such as the Dividend Aristocrats, pay dividends to shareholders with the added bonus of dividend growth each year. We believe investors looking to generate long-term wealth should consider the Dividend Aristocrats. Dividend Aristocrats Overview The Dividend Aristocrats are a group of 65 stocks that have increased their dividends for at least 25 years in a row. There are additional criteria that must be satisfied in order to become a Dividend Aristocrat. For example, a company must be in the S&P 500 Index, have a market capitalization of at least $3 billion, and its shares must have a daily average volume traded of at least $5 million. The relative scarcity of the Dividend Aristocrats—which total 65 stocks out of more than 500 stocks in the S&P 500 Index—demonstrates the difficulty in raising dividends each year for over 25 consecutive years. Such a long period of time will inevitably include recessions, and a variety of other global issues to deal with. For a company to be able to raise its dividend through so many challenges, it must have a strong business model that generates steady profits year after year. It must also have long-term growth potential, and a shareholder-friendly management team that understands the importance of raising dividends each year. Another advantage of the Dividend Aristocrats is that many of them have significantly higher yields than the broader market average. For instance, the S&P 500 Index as a whole currently has an average dividend yield of 1.5%. Meanwhile, the ProShares S&P 500 Dividend Aristocrats (NOBL), the major exchange-traded fund that tracks the Dividend Aristocrats, currently yields 2.2%. Investors can purchase a basket of all Dividend Aristocrats with NOBL, or purchase the individual stocks, many of which have even higher yields than NOBL. For example, People’s United Financial (PBCT) is a Dividend Aristocrat from the banking industry, with a high dividend yield of 5.2%. AT&T (T) is a Dividend Aristocrat with an even higher yield of 7%. Our top-ranked Dividend Aristocrat has an even higher yield than People’s United or AT&T. Our Top Dividend Aristocrat Today Exxon Mobil (XOM) is our top-ranked Dividend Aristocrat, and it is also the highest-yielding Dividend Aristocrat with a 7.7% yield. While higher-yielding stocks are often accompanied by elevated levels of risk, there are multiple quality Dividend Aristocrats with high dividend yields above 5%. In the case of Exxon Mobil, its abnormally high dividend yield is due to its plunging share price over the past few years alongside the drop in oil prices. The broader energy sector was under duress over the past few years, as a global supply glut put downward pressure on oil prices. Then, the coronavirus pandemic of 2020 had a major impact on global demand for oil, which served as an added headwind for oil stocks. Exxon Mobil has deployed aggressive cost-cutting to preserve its dividend in the short-term. The company announced plans to cut its capital expenses 30% in 2020. It also announced it will cut 15% of its global workforce to further cut costs. Over the long-term, the company expects the global oil price to rebound as the global economy recovers from the coronavirus pandemic. It is also betting its future on growing its production, which will be possible due to the company’s premier assets. The Permian will be a major growth driver, as the oil giant has about 10 billion barrels of oil equivalent in the area and expects to reach production of more than 1.0 million barrels per day in the area by 2025. Guyana, one of the most exciting growth projects in the energy sector, will be the other major growth driver of Exxon. The company has nearly tripled its estimated reserves in the area, from 3.2 billion barrels in early 2018 to nearly 9.0 billion barrels. Overall, Exxon Mobil expects to grow production by 25%, from 4 million barrels per day to 5 million barrels per day by 2025. We expect Exxon Mobil to grow earnings-per-share by 8% per year over the next five years, driven by a higher oil price as well as rising production. Although we view the stock as slightly overvalued at the present time, with a fair value price of $42 versus a current price of $46, we still see the stock as generating strong total returns. In addition to earnings-per-share growth, future returns will be driven by the high dividend yield of 7.7%. Overall, we see the potential for total returns to reach nearly 14% per year over the next five years, a highly attractive expected return for a Dividend Aristocrat. Final Thoughts Investors should not overlook the value of dividends. While growth stocks tend to receive much of the coverage in the financial media, dividend stocks have been proven to build wealth for shareholder over the long run. According to Standard & Poor’s, dividends have accounted for approximately one-third of the stock market’s total return since 1926. We believe the highest-quality dividend growth stocks, such as the Dividend Aristocrats, can generate superior long-term total returns.   By Bob Ciura of Sure Dividend

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