Recession gave juicy dividend yields to these 3 buyers

If there’s a silver lining to it bear marketIt is that income investors have higher dividend returns at their disposal. – MarketBeat

While it’s hard to know whether or not this week’s stock rally will survive, we do know that many stocks are heavily discounted. And that those that pay generous dividends are swinging at attractive returns that could limit further upside.

When Income Investors Look dividend yield Out of 3%, 4%, or more, they generally don’t last very long. Such stocks eventually bid up to the point where the return approaches the market average.

The current S&P 500 yield has climbed to around 1.7%. Its more than 50 components offer yields that are at least twice that.

Yet only going after the highest yields is not a winning strategy. Companies that have long-term growth prospects to support dividend payouts are ideal.

Which Energy Stock Pays a Big Dividend?

Enbridge Inc. ,NYSE: ENB, is an energy infrastructure company that pays an annual dividend of $2.65. This equates to a forward yield of 6.4%, following the stock’s sharp decline from its 2022 highs. by comparison, average energy sector The yield is about 4.2%.

With Enbridge, income investors are getting not only above-average quarterly cash payments, but above-average fundamentals as well. The company’s diverse network of oil and gas pipelines transport most of Canadian oil exports coming from the US and about a fifth of US natural gas. It generates steady cash flow and profits which are shared with the investors.

Over the past 20 years, Enbridge shareholder distributions have grown at a rate of 12%. This growth is likely to continue based on an evolving plan to increase capacity on its main shipping line. Meanwhile, there are more synergies to be obtained from the Spectra Energy merger that should lead to stronger bottom-line results.

What is particularly unique about Enbridge is that it has a growing regulated utility business that serves more than 3 million retail customers. This makes it somewhat of a utility company under the guise of an energy company, with a slew of wind power assets off the coasts of Canada and Europe.

Management expects EBITDA to grow about 9% this year which bodes well for its 65% target payout ratio. The stock has been pulled lower amid rising rates and fears of a recession, but the dividend remains safe and durable.

What is a good defensive telecom stock?

BC Inc. (NYSE: BC, Canada’s largest telecommunications company. It’s now one of the largest dividend payers in the country, claiming a 6% yield with a stock below $50. This is a return that is more than twice that of the average communication stock.

As the namesake of Bell Canada, BCE provides wireless, landline and media services to residential and business customers nationwide. About 70% of the country’s people get their local and long distance phone service through Bell Canada.

stock is one outperformer This year because of its reliable cash flow generation and defensive nature. Wherever the North American economy goes in the second half of the year, BCE’s services will continue to be in demand. Its management forecast earnings per share (EPS) growth of 2% to 7% for 2022. It is a wide range that reflects the uncertainty of the current economic environment, but also reflects confidence in stable financial growth.

Despite the influx of competition in its core wireless market, BCE continues to perform well due to its superior scale, expense management and focus on customer service. Given reliable growth and a rising dividend to match it, it may be time to take a call on BCE.

Is Gilead Stock a Buy and Hold?

Gilead Sciences, Inc. ,NASDAQ: Gilded, It has failed to find its footing in the post-pandemic market. shares of Biotechnology The company is down 17% this year, the risk-off mode is not a favorable background for the growth-oriented sector.

Recent concerns surrounding Gilead include a reduced contribution by remdesivir, the first COVID-19 treatment approved in the US, as the pandemic turns into an endemic. But that doesn’t mean it’s the end of the road for growth opportunities.

With the core HIV/Hepatitis business as the backbone, Gilead is also foraying into an oncology market, which is expected to be the business’s long-term growth driver. Therapeutic candidates for blood cancer, leukemia and breast cancer have posted positive results in clinical trials this year. A new partnership with Dragonfly Therapeutics to advance an immunotherapy program targeting solid tumors also holds promise.

As Gilead’s oncology pipeline progresses, its flagship HIV and hepatitis franchises will continue to generate solid profits. Management’s confidence in this two-pronged growth strategy is evident. It recently raised its quarterly dividend to $0.73, marking the seventh consecutive year of dividend growth.

On an annualized basis, Gilead’s dividend yield is 4.8%, which ranks among the best S&P 500 healthcare names. This should continue to create a floor for the stock until the market recognizes the growth potential of various oncology programs.