TipRanks
3 ‘Strong Buy’ Stocks With at Least 6% Dividend Yield
There’s so much going on in the markets, that it’s hard to know where to start and what to look for. On the red side of the ledger, it’s clear that the headwinds are gathering. House Democrats are still rejecting the $1.8 trillion coronavirus aid and stimulus package put forth by the White House, saying that President Trump’s proposal does not go far enough. The House Dems are pushing their own $2.2 trillion stimulus. At the same time, both Eli Lilly and Johnson & Johnson have paused their coronavirus vaccine programs, after the latter company reported an “adverse event” in early trials. This has more than just investors worried, as most hopes for a ‘return to normal’ hang on development of a working vaccine for the novel virus.And earnings season is kicking off. Over the next several weeks, we’ll see Q3 results from every publicly traded company, and investors will watch those results eagerly. The consensus is, that earnings will be down year-over-year somewhere between 20% and 30%. With this in mind, we’ve used the TipRanks database to pull up three dividend stocks yielding 6% or more. That’s not all they offer, however. Each of these stocks has a Strong Buy rating, and considerable upside potential.Philip Morris (PM)First on the list is tobacco company Philip Morris. The ‘sin stocks,’ makers of tobacco and alcohol products, have long been known for their good dividends. PM has taken a different tack in recent year, with a turn toward smokeless tobacco products, marketed as cleaner and less dangerous for users’ health.One sign of this is the company’s partnership with Altria to launch and market iQOS, a heated smokeless tobacco product that will allow users to get nicotine without the pollutants from tobacco smoke. PM has plowed over $6 billion into the product. Given the regulatory challenges and PR surrounding vaping products, PM believes that smokeless heated tobacco will prove to be the stronger alternative, with greater potential for growth.No matter what, for the moment PM’s core product remains Marlboro cigarettes. The iconic brand remains a best seller, despite the long-term trend of public opinion turning against cigarettes.As for the dividend, PM has been, and remains, a true champ. The company has raised its dividend payment every year since 2008, and has reliably paid out ever quarter. Even corona couldn’t derail that; PM kept up its $1.17 quarterly payment through 2020, and its most recent dividend, paid out earlier this month, saw an increase to $1.20 per common share. This annualizes to $4.80, and gives a yield of 6%.Covering PM for Piper Sandler, analyst Michael Lavery likes the move to smokeless products, writing, “We remain bullish on PM’s strong long-term outlook, and we believe recent iQOS momentum throughout the COVID-19 pandemic has been impressive. iQOS has had strong user growth and improving profitability, and…
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