Amidst the volatility and declines on Wall Street, dividend stocks with high yields have become a prized commodity among investors. Growing fears that the economy is tipping into recession continue to draw investors into reliable stocks that offer passive income.
Most dividend payers are primarily concentrated in industries that consumers rely on throughout the year, regardless of the economic environment. Such sectors typically include utilities, infrastructure, consumer staples and telecommunications. We should also add real estate investment trusts (REITs) and master limited partnerships (MLPs) to the list of high-yield plays.
So far in 2022, dividend stocks have outperformed broader indices. For example, an exchange-traded fund (ETF) that tracks 75 high-dividend stocks, the iShares Core High Dividend ETF (NYSEARCA:HDV), has appreciated over 7% year-to-date (YTD). Conversely, the S&P 500 index has lost over 13% since January.
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With that information, here are seven high-quality dividend stocks with high yields that will provide a safe way to position investor portfolios amidst the uncertainty in the stock market.
Brookfield Infrastructure Partners
Walgreens Boots Alliance
Brookfield Infrastructure Partners (BIP)
Source: T. Schneider / Shutterstock
52-Week Range: $52.92 – $69.01
Dividend Yield: 3.5%
Brookfield Infrastructure Partners (NYSE:BIP) is one of the leading operators of infrastructure assets across the globe. Its portfolio includes communications towers, data centers, fiber optic cable, natural gas pipelines, storage, and processing facilities.
The infrastructure giant announced first-quarter metrics on May 4. Revenue increased 27% year-over-year (YOY) to $3.4 billion. Funds from operations (FFO) per unit increased 3% YOY to 96 cents. Cash and equivalents ended the period at $1.97 billion.
The company is capitalizing on soaring demand for infrastructure worldwide. As a result, its FFO was the highest in the partnership’s history.
In May, the company also announced a 3-for-2 stock split. It is expected to take place on June 10. Many investors focus on stock-splits as historically the move has provided positive momentum for such shares.
So far in 2022, BIP stock is trading almost flat. The stock generates a 3.5% dividend yield.
Shares are trading at 89 times forward earnings and 1.5 times sales. The 12-month median price forecast for Brookfield Infrastructure stock stands at $70.
EPR Properties (EPR)
Source: Vitalii Vodolazskyi / Shutterstock
52-Week Range: $41.14 – $56.38
Dividend Yield: 6.6%
EPR Properties (NYSE:EPR) is a specialty triple-net lease REIT focused on “experiential” real estate properties. They includes vacation resorts, theme parks, movie theaters and other entertainment-oriented sites.
The thematic REIT released Q1 results on May 4. Revenue increased 41% YOY to $157.5 million. Adjusted FFO per diluted share more than doubled to $1.10, up from 48 cents in the prior-year quarter. Cash and equivalents ended the period at $323.8 million.
Analysts concur that such venues could capitalize on the post-pandemic “travel revenge” momentum. Management projects adjusted FFO for 2022 to increase more than 42% to between $4.39 and $4.55.
The REIT generates a 6.6% dividend yield paid in monthly installments. It has a reasonable dividend payout ratio, standing at 75% of its adjusted FFO.
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EPR stock has returned over 5% YTD. Shares are trading at 23 times forward earnings and 6.55 times sales. The 12-month median price forecast for EPR Properties stock stands at $58.50.
Foot Locker (FL)
Source: shutterstock.com/philip openshaw
52-Week Range: $26.36 – $63.98
Dividend Yield: 4.9%
Foot Locker (NYSE:FL) operates footwear and apparel retail stores across the U.S. as well as globally. Wall Street has not been happy to hear that Nike (NYSE:NKE), a vital supplier to the retailer, has recently taken a direct-to-consumer business approach.
In other words, Nike is now selling a majority of products through its own channels. However, Foot Locker’s management seems confident in its ability to navigate this headwind.
The retail store chain issued Q1 numbers on May 20. Revenue increased 1% YOY to $2.18 billion. Adjusted earnings came in at $1.60 per share, down from $1.96 in the prior-year quarter.
Cash and equivalents totaled $551 million at the end of the period. The group also reaffirmed its guidance for 2022.
So far in 2022, FL stock has tumbled 25%. Nonetheless, it currently generates a juicy 4.9% dividend yield. Shares are changing hands at 7.2 times forward earnings and 0.36 times sales. The 12-month median price forecast for Foot Locker stock is at $32.
Kinder Morgan (KMI)
Source: JHVEPhoto / Shutterstock.com
52-Week Range: $15.01 – $20.19
Dividend Yield: 5.6%
Kinder Morgan (NYSE:KMI) is one of the largest midstream energy firms in North America. It specializes in transporting, storing, and processing natural gas and crude oil as well as refined products.
The midstream giant announced Q1 results on April 20. Revenue declined nearly 18% YOY to $4.29 billion. Adjusted earnings per share came in at 32 cents, down 47% from 60 cents in the prior-year quarter. Cash and equivalents ended the period at $84 million.
The spike in energy prices has allowed Kinder Morgan to secure attractive renewal rates and expansion projects. Moreover, management highlighted that the Russian invasion of Ukraine created more growth opportunities in its gas infrastructure business.
KMI stock currently generates a lucrative 5.6% dividend yield.
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Shares have gained almost 25% YTD. KMI stock is changing hands at 16.3 times forward earnings and 2.75 times sales. The 12-month median price forecast for Kinder Morgan stock stands at $20.
Kraft Heinz (KHC)
Source: Casimiro PT / Shutterstock.com
52-Week Range: $32.78 – $44.87
Dividend Yield: 4.4%
Food and beverage giant Kraft Heinz (NASDAQ:KHC) is the next of our dividend stocks with high yields. Along with its namesake brands, its product portfolio includes Oscar Mayer, Velveeta and Philadelphia brands.
The food manufacturer released Q1 numbers on April 27. Revenue declined 5.5% YOY to $6.05 billion. Adjusted earnings were 60 cents, down 16.7% from 72 cents a year ago. Cash and equivalents ended the period at $2.98 billion.
Kraft has been increasing prices to compensate for the rising costs of raw materials and transportation. With a large global portfolio, KHC stands out as an inflation-resistant stock. Moreover, the company raised its sales guidance for the fiscal year.
So far in 2022, KHC stock has gained over 2%. It supports an attractive 4.4% dividend yield. Shares have a modest valuation at 14.6 times forward earnings and 1.9 times sales. The 12-month median price forecast for Kraft Heinz stock is at $45.
Source: Postmodern Studio / Shutterstock.com
52-Week Range: $9.66 – $15.92
Dividend Yield: 4.1%
Viatris (NASDAQ:VTRS) is an important global generic drug manufacturer. It offers a substantial off-patent branded drug portfolio. It is known for a number of brands, including Lipitor, Xanax and Zoloft.
The pharma play issued Q1 results on May 9. Revenue declined 5% YOY to $4.18 billion. Adjusted earnings came in at $1.13 billion, or 93 cents per share, compared to $1.12 billion in the previous year. The company generated $1.07 billion of free cash flow.
Viatris expects to generate full-year revenues of around $17 billion. It is selling its biosimilars portfolio to Biocon Biologics for $3.3 billion as well.
Recently, Viatris announced the launch of Abevmy, a cancer drug, in Canada. The treatment was approved for use in treating certain types of colorectal, lung, ovarian and brain cancer. Abevmy represents the third cancer treatment that Viatris has had approved by Health Canada.
Earlier in the year, management approved a 9% increase in quarterly dividend, currently offering a yield of 4.1%. Moreover, the board authorized a “Dividend Reinvestment and Share Purchase Plan” in May.
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VTRS stock has declined 13% YTD. Shares look like a bargain at just 3.3 times forward earnings and 0.8 times sales. The 12-month median price forecast for Viatris stock stands at $13.50.
Walgreens Boots Alliance (WBA)
Source: saaton / Shutterstock.com
52-Week Range: $39.72 – $55.82
Dividend Yield: 4.4%
The last of our dividend stocks with high yields, retail pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA), needs little introduction. Over the past year, many Americans have visited one of its stores for Covid-19 vaccine shots. Management has been investing in full-service health clinics and specialty pharmacy management systems.
In late March, Walgreens released Q2 metrics. Revenue increased 3% YOY to $33.8 billion. Adjusted earnings came in at $1.59 per diluted share, up from $1.26 in the prior-year period. Cash and equivalents ended the quarter at $2.03 billion.
Walgreens reported a 14.7% growth in U.S. retail comparable sales, the highest in two decades. Moreover, its focus on digitization led to a 38% increase in online purchases.
This Dividend Aristocrat has raised its payout for over four decades and now has a 4.4% dividend yield.
So far in 2022, WBA stock has lost 17%. Shares are attractively priced at 8.1 times forward earnings and 0.3 times sales. Lastly, the 12-month median price forecast for Walgreens stock is at $48.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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