The equity markets have remained under pressure since the beginning of 2022, with benchmark indexes down double digits year-to-date. However…
markets are gradually absorbing the Fed’s tightening monetary policy, as evidenced by the S&P 500 index’s marginal gains over the past five days. Nonetheless, markets are expected to remain volatile, given the continuing geopolitical tensions and Fed’s aggressively hawkish tilt.
High-yielding dividend stocks are expected to shield investors from the ongoing market fluctuations. Their ability to pay steep dividends amid volatility indicates their financial strength. Furthermore, according to FactSet, dividends per share for the S&P 500 could grow 8% year-over-year, up from the 7% early January 2022 forecast. Investors’ interest in the high-yielding dividend stocks is evident in the iShares Core High Dividend ETF’s (HDV) 9.5% returns over the past six months.
Therefore, we think high-yielding dividend stocks British American Tobacco p.l.c. (BTI), Enterprise Products Partners L.P. (EPD) and BHP Group Limited (BHP) could be ideal bets.
British American Tobacco p.l.c. (BTI)
Headquartered in London, BTI provides tobacco and nicotine products to consumers worldwide. It offers vapor, tobacco heating, modern oral nicotine products; combustible products; and traditional oral products- such as snus and moist snuff.
On Feb. 11, 2022, Jack Bowles, Chief Executive, said, “The BAT of tomorrow will be a high-growth, consumer-centric, multi-category consumer goods company. We are confident in delivering a faster transformation, continued robust financial performance, and superior cash returns to shareholders.”
BTI has been paying dividends for 12 consecutive years. Its dividend payouts have grown at a 5.6% CAGR in the past five years. Its current dividend translates to a 6.93% yield, while its four-year average yield is 6.93%. On Feb. 11, 2022, BTI declared an interim dividend of 217.80p per ordinary share of 25p.
BTI’s adjusted revenue came in at £25.68 billion ($31.89 billion) for the year ended Dec. 31, 2021, up 6.9% year-over-year. Its adjusted profit from operations was £11.15 billion ($13.85 billion), up 5.2% year-over-year. Also, its adjusted EPS was 329.00p, up 6.6% year-over-year.
BTI’s revenue is expected to increase by 3.9% year-over-year to $34.33 billion for its fiscal year, ending Dec.31, 2023. Its EPS is expected to grow at 8.9% per annum for the next five years. Over the past six months, the stock has gained 24.7% in price to close yesterday’s trading session at $43.63.
BTI’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
BTI has a B grade for Stability and Sentiment. Within the B-rated Tobacco industry, it is ranked #4 of 10 stocks. Click here to see the additional POWR Ratings for Growth, Value, Momentum, and Quality for BTI.
Enterprise Products Partners L.P. (EPD)
EPD in Houston, Tex., provides midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services; and Petrochemical & Refined Products Services.
On Feb. 17, 2022, EPD completed a $3.25 billion acquisition of Navitas Midstream Partners, LLC. This move is expected to help the company generate…
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