10 High-Yield But Safe Dividend Stocks to Buy Now

In this article, we discuss 10 high-yield but safe dividend stocks to buy now. You can skip our detailed analysis of dividend stocks and go directly to read 5 High-Yield But Safe Dividend Stocks to Buy Now. 

Since the start of 2022, dividend stocks have fared well as compared to other market segments. Dividend companies falling into defensive sectors offer above-average dividend yields, which are favored by investors in this current market downturn. For example, stocks like JPMorgan Chase & Co. (NYSE:JPM), AbbVie Inc. (NYSE:ABBV), and Exxon Mobil Corporation (NYSE:XOM) have above-average yields and showed solid financials in their recent earnings reports. More importantly, none of these companies are expected to face a dividend cut in the current market situation, getting more preference from institutional investors.

Daniel Peris, a portfolio manager at Federated Hermes, said that picking the right stocks with solid dividend yields is essential in this environment. He further mentioned that investors should also focus on the average annual dividend growth rates of respective companies, which gives them a clear picture of their future income. Considering this, investors are pulling out of growth names and piling into dividend stocks. According to a report published by CNBC, dividend-focused ETFs took in nearly $50 billion in the first half of the year.

Image by Steve Buissinne from Pixabay

Our Methodology: 

As recession fears mount, investors are going hungry for dividend stocks. In this article we will mention some high-yield dividend stocks that are also safe. High-yield stocks aren’t always recommended because there are questions around their dividend safety and sustainability. However, for this article we researched and found relatively safe stocks with healthy payouts in dividends.

10 High-Yield But Safe Dividend Stocks to Buy Now

9. Big 5 Sporting Goods Corporation (NASDAQ:BGFV)

Dividend Yield as of July 22: 7.90%

Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is a California-based sporting goods company that operates 433 stores in 11 states. The company also provides athletic shoes, apparel, and sports-related accessories.

At the end of Q1 2022, Big 5 Sporting Goods Corporation (NASDAQ:BGFV) reported over $62 million in cash and cash equivalents with total assets standing at nearly $400 million. In March, the company authorized a new share repurchase program for the purchase of up to $25 million of the company’s common stock. Big 5 Sporting Goods Corporation (NASDAQ:BGFV) currently pays a quarterly dividend of $0.25 per share, raising it in May 2021 by 20%. The company also offered special dividends to shareholders twice in 2021. As of July 22, the stock’s dividend yield came in at 7.90%.

At the end of Q1 2022, 12 hedge funds in Insider Monkey’s database owned stakes in Big 5 Sporting Goods Corporation (NASDAQ:BGFV), down from 14 in the previous quarter. The collective value of these stakes is over $21.4 million. Among these hedge funds, Two Sigma Advisors held the largest stake in the company, worth $5.5 million.

8. Pioneer Natural Resources Company (NYSE:PXD)

Dividend Yield as of July 22: 7.92%

Pioneer Natural Resources Company (NYSE:PXD) is an American energy company that is engaged in the exploration of hydrocarbon, gas, and oil.

In Q1 2022, Pioneer Natural Resources Company (NYSE:PXD) generated $2.3 billion in free cash flow and returned 90% of its FCF to shareholders. The company’s cash flow from operating activities stood at $2.6 billion. It repurchased shares worth $250 million during the first quarter at an average share price of $237. On May 5, Pioneer Natural Resources Company (NYSE:PXD) declared a quarterly base-plus-variable dividend of $7.38 per share. In November 2021, the company also paid a special dividend of $3.02 per share to shareholders. As of July 22, the stock’s dividend yield stood at 7.92%.

In July, MKM Partners initiated its coverage of Pioneer Natural Resources Company (NYSE:PXD) with a Buy rating and a $264 price target, as oil prices are expected to rise more due to the war in Ukraine.

The number of hedge funds tracked by Insider Monkey owning stakes in Pioneer Natural Resources Company (NYSE:PXD) stood at 54 in Q1 2022, increasing from 43 in the previous quarter. The combined value of these stakes is over $1 billion.

Carillon Tower Advisers mentioned Pioneer Natural Resources Company (NYSE:PXD) in its Q1 2022 investor letter. Here is what the firm has to say:

“Pioneer Natural Resources (NYSE:PXD) performed well in a strong energy sector. Pioneer stood out recently with a pledge to return a large majority of free cash flow to shareowners through dividends and stock buybacks, and ended hedging to give shareowners more earnings and dividend potential should oil and gas prices continue to rise.”

7. B&G Foods, Inc. (NYSE:BGS)

Dividend Yield as of July 22: 8.11%

B&G Foods, Inc. (NYSE:BGS) is an American food company that produces a wide range of food products, including syrups, maple candies, and fruit syrups.

B&G Foods, Inc. (NYSE:BGS) ended the quarter with cash and cash equivalents of over $41.4 million, up from $33.6 million available in the previous quarter. The company paid $32.7 million in dividends to shareholders in Q1, compared with $32.5 million at the end of December 2021. Though B&G Foods, Inc. (NYSE:BGS) hasn’t raised its dividends since 2018, the company has been steadily paying dividends since 2004. The company currently offers a quarterly dividend of $0.475 per share. As of July 22, the stock’s yield stood at 8.11%.

In June, Piper Sandler upgraded B&G Foods, Inc. (NYSE:BGS) to Neutral but lowered its price target on the stock to $23.

As per Insider Monkey’s Q1 2022 database, 11 hedge funds owned stakes in B&G Foods, Inc. (NYSE:BGS), up from 10 in the previous quarter. The collective value of these stakes is over $43.2 million. Millennium Management held the largest stake in the New Jersey-based company in Q1, valued at $20.4 million.

6. Altria Group, Inc. (NYSE:MO)

Dividend Yield as of July 22: 8.38%

Altria Group, Inc. (NYSE:MO) manufactures tobacco, cigarettes, and related products. The company is one of the largest manufacturers of smokable products in the world.

In the first quarter of 2022, Altria Group, Inc. (NYSE:MO) repurchased shares worth $576 million, at an average share price of $50.69. The company expects to complete its share repurchase program by December 2022. It had cash and cash equivalents available of $5.3 billion at the end of the quarter, up from $4.5 billion in the previous quarter. Altria Group, Inc. (NYSE:MO) has raised its dividends consecutively for the past 52 years. In Q1, the company paid $1.6 billion in dividends and targets a payout ratio of approximately 80%. It pays a quarterly dividend of $0.90 per share, with a yield of 8.38%, as of July 22.

In July, BofA mentioned that higher interest rates and overall inflation can influence the company’s earnings. In view of this, the firm lowered its price target on the stock to $45, with a Neutral rating on the shares.

At the end of March 2022, 47 hedge funds in Insider Monkey’s database presented a bullish stance on Altria Group, Inc. (NYSE:MO), up from 39 in the previous quarter. These hedge funds owned a collective stake worth nearly $2 billion in the Virginia-based company.

Just like JPMorgan Chase & Co. (NYSE:JPM), AbbVie Inc. (NYSE:ABBV), and Exxon Mobil Corporation (NYSE:XOM), Altria Group, Inc. (NYSE:MO) is also one of the most notable dividend stocks, offering attractive yield.

Click to continue reading and see 5 High-Yield But Safe Dividend Stocks to Buy Now.

Suggested articles:

• Top 10 Stocks To Buy According to Ken Heebner’s Capital Growth Management
• 10 Best Stocks Under $10 in Cathie Wood’s Portfolio
• Top 10 Financial Stocks To Invest In

Disclosure. None. 10 High-Yield But Safe Dividend Stocks to Buy Now is originally published on Insider Monkey.