High-dividend stocks are appealing for income investors, as the S&P 500 Index yields just 1.3% on average right now. But investors can still find high yields in the stock market without accepting excessive risks.
By contrast, the 3 high dividend stocks in this article all have current yields in excess of 4%, and have secure dividend payouts. These qualities make them attractive for income investors looking for high yields.
Arrow Financial (AROW)
Arrow Financial Corporation is a multi-bank holding company based in Glen Falls, New York. The company operates through two main subsidiary banks, the Glens Falls National Bank and Trust Company, and the Saratoga National Bank and Trust Company. Arrow Financial Corporation is also the parent company of North Country Investment Advisers and Update Agency, an insurance agency.
Arrow Financial has increased its dividend for 27 consecutive years and is a member of the Dividend Champions list.
Arrow posted first quarter earnings on April 30th, 2024, and results were worse than expected, as Arrow continued its streak of relatively poor performances. Earnings-per-share came to 45 cents, which was two cents light of estimates. Net interest margin was slightly improved at 2.60%.
Net interest income declined $1.6 million due to higher deposit costs, while noninterest income rose $1.2 million, and noninterest expense rose $1.7 million. Gross loans were up $50.5 million, or 6.1% on an annualized basis. Deposit balances were $3.8 billion, growing 2.5%, or $92 million.
AROW stock currently yields 4.1%. Arrow Financial is also very recession resistant. Its earnings-per-share declined by just -5% during the 2007-2009 financial crisis while many other financial institutions were going out of business.
Chevron Corporation (CVX)
Chevron is the fourth-largest oil major in the world based on its market cap of more than $300 billion. Chevron is predominantly an oil producer, although the company also produces natural gas, and operates chemicals and lubricants businesses as well.
The major acquisition of Hess last year will significantly boost the company’s upstream operations. On October 23rd, 2023, Chevron agreed to Acquire Hess (HES) for $53 billion in an all-stock deal. Thanks to this deal, Chevron will purchase the highly profitable Stabroek block in Guyana and Bakken assets and thus it will greatly enhance its production.
In late April, Chevron reported (4/26/24) financial results for the first quarter of fiscal 2024. The price of oil improved thanks to the Ukrainian crisis and the production cuts of OPEC and Russia while Chevron grew its production 12% thanks to its acquisition of PDC Energy, but gas prices decreased due to warm winter weather.
As a result, earnings-per-share dipped -17% over the prior year’s quarter, from $3.55 to $2.93, though they exceeded the analysts’ consensus by $0.03. Chevron will post strong production growth this year thanks to its recent acquisition of PDC Energy and its pending acquisition of Hess. The company has raised its dividend by 8% this year.
Chevron has increased its dividend for 37 years, making it a Dividend Aristocrat. Shares currently yield 4.1%.
Universal Health Realty Income Trust (UHT)
Universal Health Realty Income Trust operates as a real estate investment trust (REIT), specializing in the healthcare sector.
The trust owns healthcare and human service-related facilities. Its property portfolio includes acute care hospitals, medical office buildings, rehabilitation hospitals, behavioral healthcare facilities, sub-acute care facilities and childcare centers.
UHT reported net income of $5.3 million, or $0.38 per diluted share, for the three-month period ending March 31, 2024, compared to $4.5 million, or $0.32 per diluted share, for the same period in 2023.
Going forward, Universal Health will benefit from changing demographics. The U.S. is an aging society, with over 70 million Baby Boomers, those generally born between 1946 and 1964. As the sizable Baby Boomer generation ages, demand for healthcare facilities is poised to grow.
REITs that own healthcare properties, such as Universal Health, are in a prime position to capitalize on the changing demographic landscape. Universal Health’s growth will be accomplished by rising rents on existing properties, and by acquiring new properties.
Universal Health has a high dividend yield of 7.5%, and a secure payout. These are arguably the most important metrics for income investors. REITs are required to distribute at least 90% of their taxable income, and in exchange, do not pay income tax at the top level. The trust has also increased its dividend for over three consecutive decades.
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.