The average dividend yield in the S&P 500 Index remains low at around 1.3%. As a result, many stocks have lower dividend yields than they did several years ago, due to rising share prices.
However, there are still quality dividend stocks with high dividend yields.
Importantly, the best high dividend stocks can maintain their dividends over time, even during recessions.
These 3 dividend stocks have yields above 5%, and have secure dividend payouts.
The First Bancorp (FNLC)
The First Bancorp, which is headquartered in Damariscotta, Maine, is the holding company for First National Bank, a full-service community bank that was founded in 1864.
First National Bank is a regional bank with 18 branches along Maine’s coast and 2 branches in the greater Bangor area. It provides a wide range of commercial and retail banking services; it has total assets of $3.1 billion.
The First Bancorp benefits from the economic growth of Maine’s coastal counties and downtown Bangor.
In late October, The First Bancorp reported (10/23/24) financial results for the third quarter of fiscal 2024. Loans grew 3% and deposits grew 5% sequentially. Net interest margin expanded from 2.21% to 2.32%, as higher yields more than offset high deposit costs amid intense competition among banks.
As a result, net interest income grew 8% and earnings-per-share grew 24%, from $0.55 to $0.68.
The First Bancorp grew its earnings-per-share every single year during 2014-2022. If the bank meets our forecast for earnings-per-share of $2.30 this year, it will have grown its earnings-per-share by 5.3% per year on average over the last decade.
The net interest margin of The First Bancorp is likely to recover from next year. Given also the somewhat low comparison base formed by the 6-year low expected earnings this year, we expect 5.0% average annual growth of earnings-per-share until 2029.
FNLC has increased its dividend for 12 consecutive years and the stock currently yields 5.5%.
Huntsman Corp. (HUN)
Huntsman Corporation manufactures and sells differentiated organic chemical products worldwide. It operates in four segments: Polyurethanes, Performance Products, Advanced Materials, and Textile Effects.
The company’s products are utilized in various industries, in manufacturing anywhere from aerospace, automotive, and construction products, to packaging, coatings, and power generation.
On November 4th, 2024, Huntsman released its Q3 and results for the period ending September 30th, 2024. For the quarter, revenues grew 2.3% year-over-year to $1.54 billion.
Specifically, Polyurethanes saw a revenue increase of 4%. Performance Products and Advanced Materials revenues grew by 1% and declined by 3% respectively. Still, the weak total increase in revenues wasn’t enough to lift margins.
On a per-share basis, this translates to adjusted income of $0.10 versus adjusted income of $0.15 in Q3 2023. This was despite buybacks notably lowering the per-share result.
Huntsman’s acquisitions have been unlocking synergies over the past decade, resulting in higher gross margins during this time, which has somewhat offset the declining sales.
While EPS has been volatile and is expected to continue to be so, we forecast growth of 5% from our earnings power base of $1.65 in the medium-term, powered by the company’s cost-cutting initiatives, acquisitions, rebounding sales growth trend, and share buybacks.
HUN stock currently yields 5.5%.
Carter’s Inc. (CRI)
Carter’s, Inc. is the largest branded retailer of apparel exclusively for babies and young children in North America. It was founded in 1865 by William Carter. The company owns the Carter’s and OshKosh B’gosh brands, two of the most known brands in the children’s apparel space.
Carter’s acquired competitor OshKosh B’gosh for $312 million in 2005. Now, these brands are sold in leading department stores, national chains, and specialty retailers domestically and internationally.
On October 26th, 2024, the company reported third-quarter results for Fiscal Year (FY)2024. The company reported a decline in third-quarter fiscal 2024 results, with net sales down 4.2% to $758 million compared to the previous year’s $792 million.
Carter's reaffirmed its fiscal 2024 outlook, projecting net sales between $2.785 billion and $2.825 billion and raising its adjusted diluted EPS outlook to $4.70–$5.15. Liquidity remains strong with $1.02 billion in available funds, and the company returned $138 million to shareholders through dividends and share repurchases.
Some of the growth prospects that will drive higher revenue and earnings will be that the company continues to lead in eCommerce. Over the next five years, the company expects eCommerce sales to grow to nearly 50% of its total U.S retail sales.
Another growth driver will come from the company's "Age Up" initiative. This initiative focuses on apparel sales for children ages four to 10 years old. This older age apparel market is larger than the combined baby and toddler apparel markets.
Disclosure: No positions in any stocks mentioned
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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.