UPS - 2 High Yield Dividend Stocks For Income: One Yields More Than 5%
2024-07-11 18:00:00 ET
Summary
- I will introduce you to two high dividend yield companies that could be attractive additions to your dividend portfolio.
- Both companies unify dividend income and dividend growth, are financially healthy, and could be important key positions in your dividend portfolio.
- However, to reduce the company-specific concentration risk of your investment portfolio, I suggest setting an allocation limit of 2.5% for one and 4% for the other.
Investment Thesis
Even though some might state that Dividend Yields [FWD] of 4.86% and 5.38% might not be particularly high, I believe that such dividends can be attractive for investors if they prove to be sustainable.
This is the case as they not only help you to produce a significant amount of extra income via dividend payments while increasing this amount year-over-year, but they can also help you achieve an attractive Total Return when investing over the long term.
In this article, I have chosen two high dividend yield companies that had to meet specific criteria to be part of a pre-selection:
- Market Capitalization > $10B.
- Dividend Yield [FWD] > 4%.
- Average Dividend Growth Rate over the past 5 years > 2%.
- P/E [FWD] Ratio < 20 or P/AFFO [FWD] Ratio < 20.
- EBIT Margin [TTM] or Net Income Margin [TTM] > 5%.
- Return on Equity > 5%.