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High Dividends In Consumer Non-Cyclicals
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.
Beverages
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.
Bottom Line
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.
| Company | Yield | Market Cap |
| 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. | ||
Beverages
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.
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.
Bottom Line
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.
by
Peter Cherewyk
Peter Cherewyk has worked in the financial field for over 10 years. He completed his Bachelor of Commerce from the University of Alberta, and is currently working towards a Chartered Financial Analyst designation. He enjoys hockey and hiking and the opportunity to teach others.
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