High-yield dividend stocks stand as the stalwart sentinels of financial stability and growth potential in the tempestuous waters of today’s economic uncertainty. For investors yearning for a bountiful financial harvest, these high-yield dividend companies beckon like beacons in the dark, promising not just security but also substantial returns. The seven companies profiled in this article have etched their names in the annals of industry leadership, serving as the cornerstone for a well-fortified retirement plan. Their robust performance, strategic initiatives, and burgeoning dividend yields are a clarion call for savvy investors, offering both the cushion of stability and the tantalizing allure of growth.
Altria (MO) – Breathing Life into Retirement Portfolios
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Altria (NYSE:MO) lures investors with a juicy forward dividend yield of nearly 10%, coupled with a commendable 5-year growth rate of around 5% and an illustrious 54-year dividend growth streak. The company’s solid bottom-line performance is the bedrock supporting its robust dividend payouts. The recent uptick in its adjusted diluted earnings per share (EPS) by 2.3% (Q4 2023) demonstrates a firm commitment to fattening the wallets of its shareholders. In 2023 alone, dividends and share repurchases reached a hefty $7.8 billion, a testament to Altria’s unwavering dedication to rewarding its faithful investors.
What about the future? Well, the crystal ball appears fairly promising for Altria. With an expected adjusted diluted EPS growth of 1% to 4% in 2024, hovering between $5 to $5.15, this old tobacco warhorse seems primed to seize the opportunities that lie in wait. Moreover, its recent acquisition of NJOY, a smoke-free product company, echoes its strategic maneuvering to fortify supply chains and broaden product distribution. With an eye on the shifting tides of consumer preferences away from traditional tobacco products, Altria’s investments in smoke-free products epitomize a company that isn’t content to dwell in the past but rather, stoically embraces the winds of change.
Healthpeak (PEAK) – The High-Yield Prodigy Mastering the Art of Prosperity
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Healthpeak (NYSE:PEAK) flaunts a tempting forward dividend yield of 7%. The bedrock of Healthpeak’s operational prowess lies in its portfolio performance and leasing activity. Throughout Q4 2023, the company flaunted robust leasing activity across its outpatient medical and lab segments, clinching leases for a gargantuan 1.1 million square feet, with 743K square feet in outpatient medical spaces and 312K square feet in labs. This leasing spree is a resounding testament to the resounding demand for Healthpeak’s properties, instilling confidence in its future prospects.
Moreover, Healthpeak achieved positive leasing spreads on both its outpatient medical and lab leases for the entire year of 2023, notably registering a commendable +4% cash release spread on outpatient leases and a jaw-dropping +23% cash release spread on lab leases. These positive leasing spreads vividly signal an impending corridor of higher rental rates upon lease renewals, a harbinger of the potential riches awaiting Healthpeak and its stakeholders in the years ahead.
KeyCorp (KEY) – The Timeless Maestro Orchestrating the Symphony of High-Yield Dividends
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KeyCorp (NYSE:KEY) stands as a timeless maestro orchestrating the symphony of high-yield dividends, beckoning investors with open arms and promises of prosperity. The company’s dividend yield (forward) of leaps and bounds at 7%, a mouthwatering testament to its prowess. The compelling allure of KeyCorp lies in its robust leasing activity and the undeniably positive spreads across Outpatient Medical and Lab segments.
This company clinched noteworthy success in its leasing activity during the Q4 of 2023, leasing a whopping 1.1 million square feet. Furthermore, the company obtained positive leasing spreads, with a +4% cash release spread on outpatient leases and a staggering +23% cash release spread on lab leases. The prospect of higher rental rates upon lease renewals is a tantalizing harbinger of the sunshine that lies in KeyCorp’s future.
Financial Giants Tune Up Strategies to Win Over Investors
(NYSE:KEY) stands as a paragon of financial prowess, offering a compelling forward dividend yield of nearly 6% and a 5-year growth rate of 8%. Moreover, its remarkable 13-year dividend growth streak sets it apart. With a keen focus on optimizing its balance sheet and bolstering capital, KeyCorp has taken substantial steps to enhance its liquidity and capital adequacy, adroitly navigating changes in interest rates and regulatory requirements.
Strategic Loan Reduction to Propel Capital Efficiency
In a strategic move, KeyCorp judiciously reduced its loans by an astonishing $7 billion in 2023, optimizing its balance sheet and stepping up capital efficiency. This reduction, centered on de-emphasizing credit-only and non-relationship business lines, is a testament to the company’s pledge to prioritize full relationships and elevate the quality of lending. Moreover, the slashing of risk-weighted assets (RWAs) by $14 billion, surpassing the optimization goal of $10 billion for 2023, positions KeyCorp favorably to continue augmenting its capital strength, ensuring the sustainability of dividends and enhancing its market valuations.
Philip Morris (PM) Sails Ahead with Smoke-Free Products
Philip Morris (NYSE:PM) emerges as a stalwart, presenting a forward dividend yield of around 6%, coupled with a 5-year growth rate of nearly 3% and boasting a remarkable 15-year dividend growth streak. Notably, the company has witnessed robust growth in its smoke-free products segment, registering the third consecutive year of positive volumes and high single-digit organic top-line growth.
This burgeoning segment has emerged as a fulcrum of profitability, contributing significantly to both top-line and gross profit. For instance, the organic increase of 19% in smoke-free gross profit in 2023 cogently underscores the accelerating acceptance and adoption of smoke-free alternatives. ZYN, Philip Morris’ oral smoke-free product, has delivered spectacular growth, particularly in the U.S. market, with pro forma volumes surging by over 60% for the year and over 75% in Q4 2023. Meanwhile, the company’s flagship smoke-free product, IQOS, continues to deliver commendable results, signifying potential value expansion amid its substantial market share.
International Paper (IP) Sharpens Competitive Edge
International Paper (NYSE:IP) has been acutely focused on enhancing its dividend yield (forward) of over 5% through astute cost-reduction initiatives across its operations. By strategically lowering fixed costs within its mill system and industrial packaging business, the company has achieved significant progress in its “Building a Better IP” initiative, delivering $260 million in earnings benefits in 2023.”
International Paper has displayed operational agility in optimizing costs, with a notable 12% year-over-year reduction in fixed costs (approximately $500 million) in 2023. This reduction is predicated on the optimization of its manufacturing footprint, involving the closure of three underperforming facilities and the consolidation of operations in core regions, promising to strengthen its competitive edge by enhancing margins and overall performance.
Citizens Financial (CFG) Sails Ahead
Citizens Financial (NYSE:CFG) offers an enticing over 5% forward dividend yield with a 5-year growth rate above expectation, underlining its steadfast commitment to rewarding investors. Through a judicious and tactical approach, the bank continues to fortify its dividend sustainability and market position, providing a compelling proposition for discerning investors.
Steady Performers in a Volatile Market
Investing in Citizens Financial Group (CFG)
With a forward dividend yield above O percent and a dividend growth streak of 2 years, Citizens Financial Group (CFG) presents itself as a reliable investment in an increasingly erratic trading landscape. Maintaining a robust liquidity position, as indicated by a loan-to-deposit ratio of 82%, this financial institution demonstrates the ability to sustain operations and support lending activities. The lower-than-100% loan-to-deposit ratio is a significant indicator of its capacity to manage deposits resourcefully.
Furthermore, boasting a pro forma Category 1 Liquidity Coverage Ratio (LCR) of 117% and a liquidity coverage of uninsured deposits at 156%, the company’s liquidity position appears to be in an enviable state. This is a vital aspect that not only reflects an apt ability to meet short-term obligations using high-quality liquid assets but also suggests readiness to confront liquidity risks.
Given the company’s solid liquidity position and capacity to handle unexpected outflows, it is poised to attract depositors and maintain high valuations. In a market fraught with uncertainties, CFG stands firm, embodying reliability and potential for growth.
Assessing VICI Properties Inc. (VICI)
VICI Properties Inc. (VICI) has carved out a reputation as a stalwart with a forward dividend yield surpassing 5.5% and an impressive 5-year growth rate of 10.05%. Moreover, it boasts a robust 5-year dividend growth streak. The recent announcement of a dividend increase reaffirms the company’s commitment to rewarding shareholders even in the face of adverse conditions in commercial real estate.
This commitment to returns is further underlined by the annualized dividend growth rate, which has outperformed the largest net lease Real Estate Investment Trust (REIT) over the same period. In addition, the considerable growth in adjusted funds from operations (AFFO) per share earnings in Q3, with a year-over-year increase of 10.7%, underscores the company’s operational prowess and revenue-generating capabilities.
With an ability to consistently grow AFFO per share, VICI Properties Inc. demonstrates astute property management, the capability to maintain high occupancy rates, and the agility to capitalize on market demand even in adverse economic conditions. These factors unequivocally support the sustainability of its dividends.
On the date of publication, Yiannis Zourmpanos did not hold (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.
