In this article, we take a look at the 5 commodity dividend stocks with over 4% yield. If you want to read our detailed analysis the commodities industry, go directly to 10 Commodity Dividend Stocks With Over 4% Yield.
5. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of March 21: 6.86%
Number of Hedge Fund Holders: 51
Another high-yielding dividend stock from the energy sector is Devon Energy Corporation (NYSE:DVN), an independent oil and gas company based in Oklahoma. In February, the oil and natural gas company declared a quarterly dividend of $1 per share. In addition, Devon Energy Corporation (NYSE:DVN) increased cash returns in Q4 2021 by executing its share-repurchase program, where the company repurchased 14 million shares for a total cost of $589 million.
In 2021, Devon Energy Corporation (NYSE:DVN) generated $2.9 billion of free cash flow, the highest in the company’s 50-year history. The Oklahoma-based oil company also exceeded its volume guidance in the fourth quarter, with total production averaging 611,000 oil-equivalent barrels (Boe) per day.
Devon Energy Corporation (NYSE:DVN) attracted more hedge funds in the fourth quarter of 2021. 51 out of 924 elite funds tracked by Insider Monkey held stakes in the oil producer at the end of December 2021, up from 48 in Q3. Florida-based investment asset management firm GQG Partners increased its stake in Devon Energy Corporation (NYSE:DVN) in Q4 by 5%, bringing its total holdings to 14.5 million shares.
4. Sibanye Stillwater Limited (NYSE:SBSW)
Dividend Yield as of March 21: 7.38%
Number of Hedge Fund Holders: 10
With a yield of 7.38%, Sibanye Stillwater Limited (NYSE:SBSW) is one of the high-yielding dividend stocks from the mining sector. The South African mining company has a five-year dividend growth rate of 44.29%. In 2021, Sibanye Stillwater Limited (NYSE:SBSW) paid its shareholders a total of $1.23 billion in dividends and $575 million in share repurchases.
Given that Russia, one of the world’s largest mineral-producing countries, is in conflict with Ukraine, market analysts are optimistic about Sibanye Stillwater Limited’s (NYSE:SBSW) significant market share in the global precious metal and minerals sector. On March 10, Deutsche Bank analyst Liam Fitzpatrick increased his price target for Sibanye Stillwater Limited (NYSE:SBSW) to $21 from $18.50 and maintained his Buy rating on the shares. As of March 22, the mining stock gained 45% in the past three months.
Similarly, hedge funds increased their stake in Sibanye Stillwater Limited (NYSE:SBSW) during the fourth quarter, with 10 of the 924 funds tracked by Insider Monkey reported owning shares in the company in the period, up from 9 in the previous quarter.
In its Q3 2021 investor letter, Desert Lion Capital mentioned Sibanye Stillwater Limited (NYSE:SBSW) and discussed its stance on the firm. Here is what the fund said:
“Sibanye Stillwater is one of the largest PGM (platinum group metal) producers in the world with major operations in South Africa and the U.S. They also have gold mining operations in SA. There is significant upside optionality in their growing lithium, nickel, and uranium activities, which are not yet contributing to earnings and not recognized by the market in SSW’s price.
During the third quarter, the company reported record earnings for the interim period ended June 2021. TTM EPS was R12.03, placing the stock on a PE multiple of 4. Cash generation was excellent, and the company is effectively debt-free with surplus net cash. The management team continues to stay disciplined in their capital allocation, using cash profits to settle debt, repurchase 5% of the company’s shares at a discount, pay a healthy dividend (~11% annualized dividend yield), and expand their battery metals strategy with lithium and nickel acquisitions… (Click here to see the full text)
..Sibanye Stillwater is a well-managed, profitable business with excellent capital allocation discipline. I view it as a dividend-paying call option on the normalization of auto manufacturing, climate change initiatives, and inflation. The company’s lithium, nickel, and uranium activities also position them to participate in the continued drive towards “cleaner” energy, and so far, these options are not priced in at all.”
3. BHP Group Limited (NYSE:BHP)
Dividend Yield as of March 21: 10.17%
Number of Hedge Fund Holders: 21
BHP Group Limited (NYSE:BHP) is the biggest mining company in the world having a market cap of $255 billion as of March 22. The Australian miner offers a high dividend yield of 10.17% which draws more income investors. BHP Group Limited (NYSE:BHP) earned $9.4 billion in net income in the second half of 2021, allowing the mining company to declare a record interim dividend of $7.6 billion to shareholders in February.
The Australian miner produces iron ore, copper, nickel, and metallurgical coal in more than 90 locations around the world. In its Q4 earnings report, BHP Group Limited (NYSE:BHP) announced a $6.5 billion capital and exploration expenditure for full-year 2022. Recently, HSBC analyst Shilan Modi highlighted the miner’s operational improvements over the past five years and initiated a Hold rating for BHP Group Limited (NYSE:BHP). At the end of the fourth quarter of 2021, 21 funds had stakes in BHP Group Limited (NYSE:BHP), up from 18 at the end of the third quarter.
2. Rio Tinto Group (NYSE:RIO)
Dividend Yield as of March 21: 10.51%
Number of Hedge Fund Holders: 22
Rio Tinto Group (NYSE:RIO) is another high-paying dividend stock from the mining sector. The London-based miner pays its shareholders an annual dividend of $7.93 per share and has a five-year dividend growth rate of 36.04%. Last year, the company paid a total of $16.8 billion in dividends. Rio Tinto Group’s (NYSE:RIO) generous shareholder return program stems from the company’s dominant position in the thriving commodity sector. The company reported a net income of $21.1 billion in 2021, a 116% increase over the previous year.
Rio Tinto Group (NYSE:RIO) is in the process of terminating commercial relationships with Russian companies following the announcement by the Australian government of a ban on aluminum exports to Russia. As of March 22, Rio Tinto Group (NYSE:RIO) shares jumped 18% in the previous three months.
At the end of the fourth quarter of 2021, 22 hedge funds held stakes in Rio Tinto Group (NYSE:RIO), with total holdings amounting to $1.84 billion. While in the previous quarter, only 18 funds held stakes in the London-based mining company.
1. Vale S.A. (NYSE:VALE)
Dividend Yield as of March 21: 11.91%
Number of Hedge Fund Holders: 25
Vale S.A. (NYSE:VALE) is one of the biggest iron ore producers in the world. The Brazilian miner offers a dividend yield of 11.91%. In February, the mining behemoth declared $3.5 billion in interim dividends to shareholders. As of March 22, shares of Vale S.A. (NYSE:VALE) jumped 42% in the past three months.
As global economic activity returns to pre-pandemic levels, Vale S.A. (NYSE:VALE) is one of the iron ore producers that has benefited from increased iron ore demand. In 2021, the company’s iron ore production grew 5.1% from 2020. Vale S.A.’s (NYSE:VALE) net income came in at $22.4 billion, an increase of 360% year over year.
As of the end of December 2021, Fisher Asset Management holds the largest stake in Vale S.A. (NYSE:VALE) worth $434 million. Overall, 25 funds of the 924 elite funds tracked by Insider Monkey reported owning stakes in Vale S.A. (NYSE:VALE) at the end of the fourth quarter.
Miller Value Partners, in its Q3 2021 investor letter, mentioned Vale S.A. (NYSE:VALE) and discussed its stance on the firm. Here is what the fund said:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
You can also take a peek at the 10 Best High Dividend Stocks to Buy Now and Michael Burry’s Warning On Inflation and His Top 6 Stock Picks.
