3 High-Yield Dividend Stocks to Buy Now and 2 to Avoid Despite the Yield
Three consumer stocks yield up to 4.4% and keep raising the payout. Two others yield more, and that is exactly the problem.
Three consumer companies stand out as high-yield dividend stocks to consider purchasing: PepsiCo (PEP), Best Buy (BBY), and Philip Morris International (PM). Each of these companies has a strong track record of raising dividends, either for 54, 21, and 17 consecutive years respectively. PepsiCo's dividend stands at $1.48 per quarter, while Best Buy's is $0.96 per quarter and Philip Morris International's is $1.60 per quarter.
These yields range from 4.4% to 3.2%, but the key factor that sets them apart is their ability to grow earnings faster than their dividends, ensuring the dividends remain sustainable.
In contrast, two companies on the list do not present the same level of reliability. Kraft Heinz (KHC) has a yield of 6.5%, but its dividend has remained stagnant at $0.40 per quarter for seven years, with declining sales and operating income. Universal Corp. (UVV), another yielder at 8.4%, is faced with a 12% drop in first-quarter revenue and a net loss, driven by oversupply in the tobacco market. Investing in these stocks based on their yield alone can lead to potential value traps.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
