High-yield dividend stocks offer a stable passive income stream for long-term portfolios in times of rising volatility. It’s not unusual for investors to search for the best dividend stocks to buy, with the markets struggling to gain value. Dividend stocks belong to businesses with safe and reliable operations.
So far this year, we have seen a shift from preferring growth to value stocks. Growth stocks have performed incredibly well over the past decade with the proliferation of tech companies. However, the market is looking towards safer investment options such as fixed-income securities and dividend stocks with rising interest and inflation rates.
Some economists expect more than seven interest rate hikes this year alone. Therefore, investing in high-yield dividend stocks is an effective strategy at this time to protect your portfolio from the growing market risk.
|BNS||The Bank of Nova Scotia||$61.09|
|AM||Antero Midstream Corporation||$9.14|
|SPG||Simon Property Group, Inc.||$96.42|
|VNO||Vornado Realty Trust||$28.46|
|IBM||International Business Machines Corporation||$135.99|
|LUMN||Lumen Technologies, Inc.||$10.47|
High-Yield Dividend Stocks to Buy: The Bank of Nova Scotia (BNS)
Dividend Yield: 5.13%
Payout Ratio: 46%
The Bank of Nova Scotia (NYSE:BNS) is the third-largest bank operating in Canada, which has been an incredible investment choice for dividend growth investors over the years.
Though its top and bottom lines took a hit during the pandemic, it has roared back with higher profits and return on tangible equity than its pre-pandemic levels. With a robust balance sheet and an improving credit quality, BNS will continue to raise its dividend.
Since last year, revenues and profits have recovered impressively with strong showings across all its key segments. Its banking segment saw a 32% increase in net income on a year-over-year basis, while other segments, including international banking, wealth management and markets performed strongly.
Consequently, earnings per share were up 14%, with its ROE at over 15%. Hence, with the snapback, BNS has in an excellent position to continue rewarding its shareholders.
Antero Midstream (AM)
Dividend Yield: 9.49%
Payout Ratio: 130.43%
Antero Midstream (NYSE:AM) is a U.S.-based owner and operator of midstream energy assets. It services natural gas and natural gas liquids for Antero Resources and has been an incredible performer over the past several years.
In the past couple of years, the focus has been on increasing cash flows, dividends and improving financial flexibility. Its effective capital management has led to a massive 600% increase in free cash flows from 2018.
Following the political shift due to the Russia/Ukraine conflict, Europe is looking elsewhere for gas supplies. Naturally, the U.S. stands to benefit immensely from the development, being one of the leading LNG exporters. Companies such as Antero could see a healthy uptick in demand, significantly boosting revenues and operating cash flows.
High-Yield Dividend Stocks to Buy: Simon Property Group (SPG)
Dividend Yield: 6.97%
Payout Ratio: 110.62%
Simon Property Group (NYSE:SPG) is one of the leading real estate investment trusts (REIT), owning the highest quality portfolio of malls. REITs have been great investments during periods of high inflation as these businesses aren’t capital intensive.
SPG owns over 232 properties in North America, Asia and Europe. Moreover, it also has a majority stake in the Taubman Realty Group, which owns 24 malls in the U.S. and Asian regions.
It has bounced back, seeing excellent demand across its portfolio. It reported a 4.5% bump in sales in the first quarter to $1.3 billion. Moreover, funds from operations from the quarter were up to $2.70 per share, a 9% increase from the prior-year period. Moreover, the occupancy rate increased to 93.3%, up from 90.8% during the first quarter of last year.
With SPG firing on all cylinders again, and its eye-catching dividend yield, it’s a strong wager at this point.
Dividend Yield: 5.85%
Payout Ratio: 65.27%
AT&T (NYSE:T) is a telecommunications business that recently spun off its media assets, Warner Bros. Discovery (NASDAQ:WBD). The goal was to improve its core businesses and unlock cash flows for expansion and shareholder rewards.
The company recently reported its first-quarter results, which showed that it’s core wireless business continues to perform exceedingly well. Its wireless revenues have risen 5.5% year-over-year to $20.1 billion. Moreover, it gained 691,000 new postpaid subscribers during the quarter, its highest first-quarter net addition in over a decade.
AT&T’s wireline business has been struggling amidst a transition towards faster fiber networks. Additionally, it expects its broadband business to grow significantly quicker than its wireless business due to the expansion of fiber networks.
It plans to invest $24 billion to expand its 5G and fiber networks in the next couple of years. Despite the accelerating spending, it expects its adjusted earnings per share (EPS) to rise 0% to 2% this year and 2% to 7% in 2023.
High-Yield Dividend Stocks to Buy: Vornado Realty (VNO)
Dividend Yield: 7.2%
Payout Ratio: 328.18%
Vornado Realty (NYSE:VNO) is a leading office building landlord focused in New York. It has interests in roughly 20 million square feet of office space, with a portfolio that includes some of the most popular names, including the Neuberger Berman headquarters, Bloomberg and others. The pandemic-led headwinds led to a substantial slowdown in VNO’s business, but the recent quarterly results point to a comeback.
Total revenues came in at $442 million during the first quarter, up 16% from the prior-year period last year and $20 million more than analyst estimates. Moreover, occupancy rates were up 92.1%, a 100 basis point improvement from the same quarter last year. Also, net income stood at an impressive $26.5 million, a marked improvement from the $4 million it generated last year.
Despite the positives of late, the market is hammering VNO, which offers over a 7.2% dividend yield.
International Business Machines (IBM)
Dividend Yield: 4.82%
Payout Ratio: 119.49%
International Business Machines (NYSE:IBM) has spent years transforming its business toward cloud computing and AI. Back in 2019, it acquired a hybrid cloud computing giant in Red Hat and completed the spin-off of IT infrastructure services business, Kyndryl (NYSE:KD) last November. Consequently, the business is leaner than ever and is back generating healthy revenues and cash flows.
First-quarter results came in at $14.2 billion, up from $13.85 billion last year adjusted for the Kyndryl spin-off. Moreover, its hybrid cloud sales in the trailing twelve months were $20.8 billion, a 17% improvement on a year-over-year basis.
With a focus on high-growth sectors, I expect the veteran tech giant to perform exceptionally well over the long term.
High-Yield Dividend Stocks to Buy: Lumen Technologies (LUMN)
Dividend Yield: 9.52%
Payout Ratio: 48.54%
Lumen Technologies (NYSE:LUMN) is a top telco operating in the U.S., which appears to be growing again. It has sold off a sizeable chunk of its U.S. telecom operations, which generate sales from sluggish DSL connections and phone service. Moreover, Lumen has been aggressively upgrading its telecom infrastructure from copper wires to fiber. It plans to expand its fiber footprint by 361.50% from 2.6 million addresses currently.
Fiber upgrades will be a major growth driver for Lumen’s broadband business, helping it acquire new customers at high prices. Also, Lumen plans to make a mark in edge computing, virtual reality, gaming and related services that require high bandwidth services.
Despite a healthy outlook, LUMN stock trades at just 0.57 times forward sales, with over a 9.5% yield.
On the date of publication, Muslim Farooque 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.