Investing in dividends is never a guaranteed money maker. High-yield stocks could give your portfolio a lift as long as they keep getting paid. Looking at the company's distribution as a percentage of earnings could give hints of whether the dividend will be cut. A strong cash flow trend is also a benefit if the company is planning on paying its investors. Here are five stocks with dividend yields over 5% with a solid company behind them.
|Altria Group (NYSE:MO)||6.5%||44.3B|
|B&G Foods (NYSE:BGS)||6.7%||513M|
|British American Tobacco (ADR) (NYSE:BTI)||7.3||58.5B|
|Cal-Maine Foods (Nasdaq:CALM)||5.8%||776M|
|Compania Cervecerias Unidas (ADR) (NYSE:CCU)||7.6%||2.6B|
|Reynolds American (NYSE:RAI)||6.7%||15.2B|
|Data as of market close May 20, 2010.|
Compania Cervecerias Unidas (NYSE: CCU) is a beverage company, alcoholic and non, primarily operating in Chile and Argentina. In its fourth quarter of 2009 released March 17, 2010, net profit grew 18.8% to $1.01 per American depositary receipt (ADR). For the full year 2009, net profit grew 41.6% to $3.97 per ADR on sales of Ch$776,544. CCU has an expected long-term growth rate of 8.8%, which is 1% above the S&P 500, and a dividend yield which is much greater than that common to the industry.
Yields In Tobacco
British American Tobacco (ADR) (NYSE: BTI) currently pays a 5% yield in the trailing 12 months. Booker Group, a U.K.-based wholesaler, released financial year 2010 reports on May 21. Total tobacco sales were up 5.8% compared to a 1.5% decrease in the previous year.
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British American Tobacco currently has a trailing 12-month return on equity (ROE) of 37%. That is a good return on equity, but it isn't the highest on the list. That honor goes to Altria Group (NYSE: MO) with a 97% ROE, while Reynolds America (NYSE: RAI) is sitting at a 20% ROE. Reynolds America and Altria Group are both major players in the tobacco industry yielding around 6.5% each. (Both ROE and ROA measure performance, but sometimes they tell a very different story. This is why they're best used together. Learn more in ROA And ROE Give Clear Picture Of Corporate Health.)
Food And Grocery
B&G Foods (NYSE: BGS) and Cal-Maine Foods (Nasdaq: CALM) are in the food industry, which weathers economic turmoil but doesn't always give the best gains in a bull market. B&G Foods manufactures and sells food products mainly focusing on long shelf life; for example, vinegar, spices, canned foods or pickles. On May 18, B&G announced a regular quarterly dividend of 17 cents per share, payable July 30 to holders of record on June 30, 2010. At a share price hovering around $10, that's a 6.7% yield.
Dividends are not guaranteed, but when the markets are popping and locking, a stream of cash is welcome to any investor. These consumer stocks and non-cyclicals will not escape drops but could be worth a deeper look.