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.

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 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 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, 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 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 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 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 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 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. is an American food company that produces a wide range of food products, including syrups, maple candies, and fruit syrups.

B&G Foods, Inc. 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. 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. 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., 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. 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. 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., 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., AbbVie Inc., and Exxon Mobil Corporation, Altria Group, Inc. is also one of the most notable dividend stocks, offering attractive yield.

5. Camping World Holdings, Inc. (NYSE:CWH)

Dividend Yield as of July 22: 8.44%

Camping World Holdings, Inc. (NYSE:CWH) is an Illinois-based retail company that specializes in recreational vehicle parts and vehicle services. The company also sells supplies for camping.

At the end of Q1 2022, Camping World Holdings, Inc. had nearly $140 million available in cash and cash equivalents. The company’s total assets amounted to over $4.7 billion, up from $4.37 billion in the previous quarter. Its free cash flow also remained strong at $542 million and the dividend is protected by a 21% payout ratio. Camping World Holdings, Inc. offers a quarterly payout of $0.625 per share, raising it by 25% in February. In addition to this, the company also has a history of paying special dividends to shareholders. As of July 22, the stock’s dividend yield came in at 8.44%.

According to Insider Monkey’s database for Q1 2022, 16 hedge funds owned stakes in Camping World Holdings, Inc., with a collective value of nearly $360 million. In the previous quarter, 22 hedge funds held stakes in the company, worth $386.5 million. With over 5.1 million shares, Abrams Capital Management was the company’s leading shareholder in Q1.

4. Glatfelter Corporation (NYSE:GLT)

Dividend Yield as of July 22: 9.00%

Glatfelter Corporation (NYSE:GLT) is a North Carolina-based manufacturing company that specializes in food and beverage applications, personal hygiene, and packaging products.

In the first quarter of 2022, Glatfelter Corporation generated $78.5 million in free cash flow, up tremendously from $11.4 million recorded during the same period last year. The company’s total assets came in at over $1.74 billion. Glatfelter Corporation has been paying dividends for a considerable period of time and raised its dividends consecutively in the last two years. It currently offers a dividend of $0.14 per share every quarter, with a dividend yield of 9.00%, as of July 22.

At the end of Q1 2022, 10 hedge funds in Insider Monkey’s database owned stakes in Glatfelter Corporation, up from 7 in the previous quarter. The collective value of these stakes is over $50 million.

3. OneMain Holdings, Inc. (NYSE:OMF)

Dividend Yield as of July 22: 9.21%

OneMain Holdings, Inc. (NYSE:OMF) is an American financial services holding company that focuses on consumer finance and insurance.

OneMain Holdings, Inc. started paying dividends in 2019 and has maintained its dividends since then. At the end of March 2022, the company had $640 million available in cash and cash equivalents, up from $541 million in the previous quarter. Its dividend payment seems sustainable, as the cash flow payout ratio stands at 20%. In the last five years, its operating cash flow grew from $1.3 billion to $2.2 billion.

OneMain Holdings, Inc. pays a quarterly dividend of $0.95 per share, raising it by 35% in February. As of July 22, the stock’s dividend yield came in at 9.21%.

In July, Barclays lowered its price target on OneMain Holdings, Inc. to $62, highlighting the ongoing inflation and possibility of a recession. However, the firm kept an Overweight rating on the stock.

The number of hedge funds tracked by Insider Monkey owning stakes in OneMain Holdings, Inc. stood at 37 in Q1, declining from 44 in the previous quarter. The collective value of these stakes is nearly $866 million. Parsifal Capital Management was the largest stakeholder of the Indiana-based company, owning over 2 million shares.

ClearBridge Investments mentioned OneMain Holdings, Inc. in its Q4 2021 investor letter. Here is what the firm has to say:

“Similar to the energy sector, the financials sector is also trading at very depressed multiples relative to the market. While the sector’s strong fundamentals received some recognition in 2021, it was rewarded with substantially lower valuations than it should have had. Despite earnings growing over 30% and exceeding the overall market’s, financial stock multiples stayed flat and are currently selling at a discount of roughly 9x forward earnings.

Consumer lender OneMain is an excellent representation of the divide between perception and reality. Similar to the market’s outlook on natural gas prices for EQT, the outlook for consumer credit metrics are worse than the current reality. It is inevitable that record-low delinquencies and loss rates will rise. However, the market’s perception of these headwinds to future earnings growth has been excessive. Higher loan losses are just one piece of a larger pie, and we believe that accelerating loan growth and associated operating leverage provides a buffer to allow OneMain to continue to compound earnings for the foreseeable future. Concerns about credit have completely overshadowed these positive drivers and have resulted in the stock trading at just 5x its projected cash earnings for 2022.”

2. Heritage Insurance Holdings, Inc. (NYSE:HRTG)

Dividend Yield as of July 22: 9.72%

Heritage Insurance Holdings, Inc. (NYSE:HRTG) is a Florida-based insurance company that provides personal and commercial residential insurance products to meet consumers’ needs.

In Q1 2022, Heritage Insurance Holdings, Inc. returned $6.7 million to shareholders, covering dividends and repurchase of shares. The company had cash and cash equivalents of over $286 million at the end of the quarter, with total assets amounting to nearly $2 billion. Heritage Insurance Holdings, Inc. has raised its dividends just once since the inception of its dividend policy in 2015. However, the company maintained its payouts since then and currently offers a quarterly dividend of $0.06 per share. The stock’s yield was recorded at 9.72%, as of the close of July 22.

At the end of Q1 2022, 14 hedge funds tracked by Insider Monkey reported owning stakes in Heritage Insurance Holdings, Inc., up from 11 in the previous quarter. These stakes are collectively valued at nearly $21 million, compared with $11.8 million worth of stakes owned by hedge funds in Q4 2021.

1. Ellington Financial Inc. (NYSE:EFC)

Dividend Yield as of July 22: 11.47%

Ellington Financial Inc. (NYSE:EFC) is an American real estate credit company that provides services related to retirement, investment, and insurance planning.

Ellington Financial Inc. reported cash and cash equivalents of $363.2 million at the end of Q1 2022, compared with $92.6 million in the previous quarter. It distributed dividends worth $11.6 million during the quarter, up from $10.3 million at the end of December 2021. Ellington Financial Inc. started paying monthly dividends in 2019 and paid quarterly dividends steadily for seven consecutive years before that. It currently offers a monthly payout of $0.15 per share, with a yield of 11.47%, as of July 22.

In July, Keefe Bruyette reduced its book value estimates on mortgage real estate investment trust and downgraded Ellington Financial Inc. to Market Perform with a $14.75 price target.

Mike Vranos’ Ellington owned stakes worth over $16.4 million in Ellington Financial Inc., becoming the company’s leading shareholder in Q1 2022. Overall, 7 hedge funds in Insider Monkey’s database owned stakes in the company in Q1, the same as in the previous quarter. The collective value of these stakes is over $25.6 million.

You can also take a look at 9 Best Indian Stocks to Buy Right Now and 10 Dividend Stocks That Have Doubled Their Payouts

Follow Insider Monkey on Twitter

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

This article is originally published at Insider Monkey.