In this article, we discuss 5 high-yield dividend stocks for stable income. If you want to read our detailed analysis of dividend stocks and their performance in the past, go directly and read 10 High-Yield Dividend Stocks for Stable Income.
5. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of September 16: 6.71%
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company that specializes in the exploration of hydrocarbons. The company has been making consistent dividend payments for the past 29 years and has raised its payouts every year since 2016. On August 1, it announced a 22% hike in its quarterly dividend to $1.55 per share. As of September 16, the stock has a dividend yield of 6.71%.
In Q2 2022, Devon Energy Corporation (NYSE:DVN) reported strong results, with its revenue showing a 132% year-over-year growth at $5.63 billion. The company’s operating cash flow came in at over $2.67 billion, up from $1.8 billion in the previous quarter. Its free cash flow also jumped to $2 billion, from $1.2 billion in the preceding quarter. Devon Energy Corporation (NYSE:DVN) raised its production forecast by 3% for FY22 and expects its production per share to grow by 8% compared to 2021.
In August, Mizuho raised its price target on Devon Energy Corporation (NYSE:DVN) to $91 with a Buy rating on the shares, following the company’s quarterly earnings. The firm expects the company to report higher cash returns in comparison with the broader market.
At the end of Q2 2022, 57 hedge funds tracked by Insider Monkey owned stakes in Devon Energy Corporation (NYSE:DVN), compared with 66 in the previous quarter. These stakes are collectively valued at $1.48 billion. With roughly 15 million DVN shares, GQG Partners was the company’s leading stakeholder in Q2.
GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its Q2 2022 investor letter. Here is what the firm has to say:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
4. British American Tobacco p.l.c. (NYSE:BTI)
Dividend Yield as of September 16: 7.1%
British American Tobacco p.l.c. (NYSE:BTI) is a London-based multinational manufacturing company that specializes in the production of cigarettes and related products. According to Insider Monkey’s data, 17 hedge funds owned investments in the company in Q2 2022, down from 19 in the previous quarter. These investments are worth over $2.3 billion.
In the first half of 2022, British American Tobacco p.l.c. (NYSE:BTI) reported revenue of £12.8 billion, up 5.7% from the same period last year. The company’s operating cash flow also showed a 42.9% year-over-year growth at £3.2 billion. Its free cash flow for the first six months grew to £2.3 billion, from £1.2 billion in the prior-year period. Year-to-date, British American Tobacco p.l.c. (NYSE:BTI) returned £3.8 billion to shareholders, £2.5 billion of which accounted for dividend payments.
British American Tobacco p.l.c. (NYSE:BTI) has been raising its dividends for the past 23 years. It currently offers $0.735 per share in quarterly dividends and has a yield of 7.1%, as of September 16. In August, Barclays lifted its price target on the stock to 4,500 GBP and maintained an Overweight rating on the shares.
Distillate Capital Partners LLC mentioned British American Tobacco p.l.c. (NYSE:BTI) in its Q1 2022 investor letter. Here is what the firm has to say:
“Distillate Capital’s International FSV Strategy is less expensive, more fundamentally stable, and less levered than the benchmark All Country World Ex U.S. (ACWI-EX US) Index.The largest new position is British American Tobacco (NYSE:BTI), which was not owned previously due to leverage, but now passes that threshold and offers an 11% free cash flow to market cap yield.”
3. Magellan Midstream Partners, L.P. (NYSE:MMP)
Dividend Yield as of September 16: 8.05%
Magellan Midstream Partners, L.P. (NYSE:MMP) is a publicly traded partnership that owns ammonia and petroleum pipelines. The company also transports and distributes petroleum products. In June, Goldman Sachs upgraded the stock to Buy and also raised its price target on the stock to $59. The firm appreciated the company’s healthy balance sheet and its capital allocation potential and believes that it can survive inflation due to improvements in its refined product volumes.
Magellan Midstream Partners, L.P. (NYSE:MMP) reported revenue of $788.6 million, showing a 20.6% year-over-year growth. The company’s cash flow remained strong as its operating cash flow for the quarter came in at $297 million, up from $100.4 million in the previous quarter. Its free cash flow also showed an improvement from $55.5 million in the preceding quarter to $255.7 million in Q2 2022. For FY22, Magellan Midstream Partners, L.P. (NYSE:MMP) expects its free cash flow to reach $1.45 billion or $578 million after distributions.
Magellan Midstream Partners, L.P. (NYSE:MMP) currently offers a quarterly dividend of $1.0375 per share and has a yield of 8.05%, as of September 16. The company is one of the most prominent high-yield dividend stocks for stable income as it has been raising its dividends for the past 20 years.
At the end of Q2 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Magellan Midstream Partners, L.P. (NYSE:MMP), compared with 11 in the previous quarter. These stakes are collectively valued at $17.7 million. First Eagle Investment Management was the company’s leading stakeholder in Q2.
2. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of September 16: 8.95%
Altria Group, Inc. (NYSE:MO) is a Virginia-based producer and marketer of tobacco, cigarettes, and related products. The company has always remained committed to its shareholder return. In Q2 2022, it paid $1.6 billion in dividends to stakeholders and repurchased 10 million of its common shares for $507 million. At the end of June 2022, the company had $2.56 billion available in cash and cash equivalents, and its total assets amounted to over $36.7 billion.
On August 25, Altria Group, Inc. (NYSE:MO) declared a 4% increase in its quarterly dividend to $0.94 per share. This was the company’s 53rd consecutive year of dividend growth. As of September 16, the stock’s dividend yield stood at 8.95%. The company is determined to meet its dividend payout ratio target of 80%, as its five-year average payout ratio is 179.9%
As of the close of Q2 2022, 48 hedge funds tracked by Insider Monkey owned stakes in Altria Group, Inc. (NYSE:MO), worth over $1.8 billion. In the previous quarter, 47 hedge funds had investments in the tobacco company, with a total value of roughly $2 billion.
1. Oaktree Specialty Lending Corporation (NASDAQ:OCSL)
Dividend Yield as of September 16: 10.18%
Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a California-based specialty finance company. The company provides one-stop credit solutions to corporations with limited access to public or capital markets.
At the end of June 2022, Oaktree Specialty Lending Corporation (NASDAQ:OCSL) reported $34.3 million in cash and cash equivalents and $455 million of undrawn capacity under the credit facilities. The company’s dividends remained safe as it generated $23.7 million in free cash flow in fiscal Q3 2022 and paid $1 million in dividends.
On August 4, Oaktree Specialty Lending Corporation (NASDAQ:OCSL) announced a 3% hike in its quarterly dividend to $0.17 per share. With this increase, the company extended its dividend growth streak to 8 years. As of September 16, the stock’s dividend yield came in at 10.18%.
At the end of Q2 2022, 10 hedge funds in Insider Monkey’s database owned stakes in Oaktree Specialty Lending Corporation (NASDAQ:OCSL), up from 9 in the previous quarter. The collective value of these stakes is over $72 million. Howard Marks, Ken Griffin, and Israel Englander were some of the company’s most prominent stakeholders in Q2.
You can also take a look at 10 Blue Chip Dividend Stocks to Buy After the Market Selloff and 10 Monthly Dividend Stocks with Highest Yields
