3 High-Dividend Stocks to Buy Before the Holiday Season
Thanksgiving is approaching. It's time you considered the three companies below for your portfolio.
They offer robust dividends and strong growth prospects. All of them have performed consistently and have sound fundamentals. They also have strategies in place that should give investors confidence.
data by
1. Mattel (MAT) - Get Report
Toymaker giant Mattel possesses a large portfolio of popular brands, propelling it to the top of its segment.
Mattel's stock goes ex-dividend on Nov. 23. The company is paying 38 cents a share or $1.52 for 2015, translating into a dividend yield of 6.4%.
While the stock hasn't scorched Wall Street this year, the company (which is on track for a turnaround) continues to maintain its dividends. In fact, over the last six years, dividends have grown at a CAGR of 10.6%. For dividend lovers, here's a stock that's maintained or hiked quarterly dividends for more than four consecutive years. After 2015's sell-off, the stock looks attractive in its valuation (at 16 times forward earnings).
With Mattel ahead of its cost savings target and pushing its products in emerging markets, it's making all the right moves and makes for a solid "buy" now.
data by
2. Sun Life Financial (SLF) - Get Report
Sun Life Financial is a leading provider of diversified financial services. Its operations are spread across Canada, the U.S., the UK and Asia.
The stock, which goes ex dividend on Nov. 23, is paying CAD 0.39 this quarter, taking total annual payments to CAD 1.51. Cash outgo for dividend payouts has remained steady between $700 million-$900 million every year for the past five years, even as free cash flow has been largely healthy, barring 2012 and 2013.
The third-quarter report card reflected stability and movement -- underlying net income was $528 million, up from $517 million in the same period last year and underlying return on equity was 11.6%. Expected profit grew 9%, while assets under management grew to $846 billion.
The company announced a $0.01 increase in quarterly common share dividends. This dividend hike, coupled with the increase announced in the first quarter, represents a total increase of 8% in dividends over 2015.
The figures reflect business momentum and a strong capital position, and they're in line with management's target dividend payout range of 40%-50%.
Sun Life recently announced the acquisition of Assurant'sAIZ U.S. Employee Benefits business and completed the acquisitions of Bentall Kennedy and Prime Advisors. The acquisitions, when combined with strong execution and organic growth, should propel Sun Life in 2016. It will also help the company, which trades at 11.5 times forward earnings, deliver on its medium-term objectives for EPS growth and ROE.
data by
3. Johnson & Johnson (JNJ) - Get Report
S&P 500 and Dow member Johnson & Johnson is a 129-year-old, multinational medical devices, pharmaceuticals and consumer packaged goods manufacturer.
This is a solid dividend-creator, offering a yield of 2.8%. For now, ignore its tepid third-quarter earnings that were marred by currency headwinds. Nearly three-fourths of the company's sales are from products that stand among the top two global market share holders. With the demand for health care products rising outside the U.S., half the company's revenues are derived from overseas components.
Johnson & Johnson has delivered a stable return on invested capital over the last decade. The company goes ex dividend on Nov. 20. It's set to pay a total of $2.95 in dividends for 2015, a good 7% rise from 2014. This is higher than its 5.5% dividend CAGR for the past five years.
Johnson & Johnson has also repurchased shares worth $2.5 billion-$7 billion every year over 2010-2014. At the same time, it's paid out dividends worth $5.8 billion-$8 billion over the same period.
Free Cash Flow (FCF) generation is between $12 billion-15 billion, ensuring dividend yields are protected and safe. At 15.5 times forward earnings, this is a fabulous "buy-and-hold-forever" blue chip.
As the market gyrates wildly this year, a group of promising growth stocks should keep their footing in 2016 and beyond. These stocks are undervalued with strong fundamentals. To get a chance to invest in these attractive equities before the crowd, click here for the full report.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.