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Laila Maidan
- Dividend payouts hit a record high during the first quarter of 2024.
- Dividends are expected to rise again for the full year.
- Below are 14 names with the highest yields among buy-rated stocks, according to TipRanks.
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If you were invested in a dividend-paying stock at the start of this year, you've probably seen some nice returns by now.
Amid rising profits, US companies paid a record $164.3 billion in dividends to shareholders in the first quarter, according to the Janus Henderson Global Dividend Index. Multi-billion-dollar payouts from Meta, Walt Disney, and T-Mobile drove much of the increase in dividends in Q1. And there's more to come: S&P 500 companies are forecast to increase dividend payments by 6% this year, a step up from the 5.1% growth last year, according to S&P Dow Jones Indices.
Meta is, of course, one of the Magnificent Seven stocks that have been largely responsible for the market's gains over the past year. As these stocks keep climbing, the consensus remains that they're part of an overcrowded trade: "Long Magnificent 7" was picked as the most crowded trade for a 15th straight month, according to Bank of America's June Global Fund Manager Survey.
If you're waiting for a market pullback to get a chance to enter the most popular stocks at a better price, you may be on the sidelines for a while. An alternative strategy is to find strong dividend payers with price upside, even if they are smaller and less popular.
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But not all dividend stocks are created equal, and just because a company has a higher dividend yield — its dividend payout relative to its stock price — doesn't mean it's a better bet. Sometimes, it could mean you're taking more risk because a high dividend yield could result from a low or falling stock price. Companies that make the big payouts could have a harder time maintaining them long-term, and dividend cuts could hurt stock prices if investors see them as a sign of financial weakness.
If you're unsure where to start, below are 14 stocks compiled by TipRanks, a financial data firm that uses analyst ratings, price targets, and other data to create lists of top stocks. The names below have the highest dividend yields among those with a "strong buy" analyst consensus rating.
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1. Copa Holdings
Ticker: CPA
Analyst Price Target - upside/downside: 65.65%
Dividend Yield: 5.08%
Market Cap: $3.98B
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2. Hasi
Ticker: HASI
Analyst Price Target - upside/downside: 16.94%
Dividend Yield: 5.16%
Market Cap: $3.53B
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3. GeoPark
Ticker: GPRK
Analyst Price Target - upside/downside: 36.85%
Dividend Yield: 5.16%
Market Cap: $543.38M
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4. Bank of NT Butterfield & Son
Ticker: NTB
Analyst Price Target - upside/downside: 13.57%
Dividend Yield: 5.22%
Market Cap: $1.58B
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5. Viper Energy
Ticker: VNOM
Analyst Price Target - upside/downside: 19.02%
Dividend Yield: 5.73%
Market Cap: $6.42B
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6. AT&T
Ticker: T
Analyst Price Target - upside/downside: 18.85%
Dividend Yield: 6.15%
Market Cap: $129.42B
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7. Sunoco
Ticker: SUN
Analyst Price Target - upside/downside: 10.93%
Dividend Yield: 6.24%
Market Cap: $8.25B
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8. Rio Tinto
Ticker: RIO
Analyst Price Target - upside/downside: 16.47%
Dividend Yield: 6.55%
Market Cap: $112.82B
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9. HSBC Holdings
Ticker: HSBC
Analyst Price Target - upside/downside: 15.25%
Dividend Yield: 6.93%
Market Cap: $164.28B
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10. Enterprise Products Partners
Ticker: EPD
Analyst Price Target - upside/downside: 17.51%
Dividend Yield: 7.17%
Market Cap: $61.46B
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11. Ladder Capital
Ticker: LADR
Analyst Price Target - upside/downside: 13.43%
Dividend Yield: 8.27%
Market Cap: $1.42B
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12. Frontline
Ticker: FRO
Analyst Price Target - upside/downside: 35.11%
Dividend Yield: 8.79%
Market Cap: $5.49B
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13. Rithm Capital (New Residential Investment)
Ticker: RITM
Analyst Price Target - upside/downside: 16.96%
Dividend Yield: 8.98%
Market Cap: $5.38B
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14. Blackstone Secured Lending Fund
Ticker: BXSL
Analyst Price Target - upside/downside: 1.36%
Dividend Yield: 9.55%
Market Cap: $6.06B
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