In this article, we discuss 5 large-cap dividend stocks with over 5% yield. If you want to read our detailed discussion on large-cap dividend investing, go directly to read 10 Large-Cap Dividend Stocks with Over 5% Yield.
5. Kinder Morgan, Inc. (NYSE:KMI)
Dividend Yield as of August 18: 5.90%
Kinder Morgan, Inc. (NYSE:KMI) is a Texas-based energy infrastructure company that owns and controls oil pipelines and terminals. The stock’s price target was raised by Barclays in August to $21 due to the company’s improving fundamentals. The firm kept an Equal Weight rating on the shares.
In its Q2 2022 earnings, Kinder Morgan, Inc. (NYSE:KMI) reported revenue of $5.15 billion, presenting a 63.5% year-over-year growth. The company’s balance sheet remained strong during the quarter, with free cash flow generation of $1.2 billion, up from $677 million in the previous quarter. Moreover, its distributable cash flow stood at over $1.1 billion, growing from $1 billion in the same period last year.
On July 20, Kinder Morgan, Inc. (NYSE:KMI) declared a quarterly dividend of $0.2775 per share, consistent with its previous quarter. The company holds a 5-year streak of consistent dividend growth. Its dividend yield came in at 5.90%, as recorded on August 18.
As of the end of June 2022, 41 hedge funds owned stakes in Kinder Morgan, Inc. (NYSE:KMI), up from 40 in the previous quarter, as shown by Insider Monkey’s database. The stakes owned by these funds hold a value of over $1.2 billion. Orbis Investment Management held the largest stake in the company in Q2, worth $363.2 million.
4. Devon Energy Corporation (NYSE:DVN)
Dividend Yield as of August 18: 6.96%
Devon Energy Corporation (NYSE:DVN), an Oklahoma-based energy company, announced strong Q2 earnings on August 1. The company generated $5.6 billion in revenue, presenting a 132.6% year-over-year growth. For FY22, the company raised its production forecast by 3% to a range of 600,000 to 610,000 Boe per day and expects its production per share to grow by 8% compared to 2021.
Devon Energy Corporation (NYSE:DVN) has been a consistent dividend payer for the past 29 years and raised its payouts every year since 2016. On August 1, the company announced a 22% hike in its quarterly dividend to $1.55 per share, with a dividend yield of 6.96%, as of August 18.
In August, Mizuho lifted its price target on Devon Energy Corporation (NYSE:DVN) to $91 with a Buy rating on the shares, highlighting the sector’s cash returns in Q2 2022.
At the end of Q2 2022, 57 hedge funds tracked by Insider Monkey held positions in Devon Energy Corporation (NYSE:DVN), down from 66 in the previous quarter. The stakes owned by these funds hold a value of over $1.4 billion. Rajiv Jain’s GQG Partners was the company’s leading shareholder in Q2, with nearly 15 million shares.
3. Medical Properties Trust, Inc. (NYSE:MPW)
Dividend Yield as of August 18: 7.00%
Medical Properties Trust, Inc. (NYSE:MPW) is a healthcare-focused real estate investment trust, headquartered in Alabama, US. The company was a part of 15 hedge fund portfolios in Q1 2022, down from 16 in the previous quarter, according to Insider Monkey’s data. The stakes owned by these hedge funds are collectively valued at over $238.5 million.
On August 3, Medical Properties Trust, Inc. (NYSE:MPW) announced its Q2 earnings, posting an FFO of $0.46, which beat analysts’ estimates by $0.01. The company’s revenue for the quarter stood at $400.2 million, showing a 4.8% year-over-year growth. Medical Properties Trust, Inc. (NYSE:MPW) has been raising its dividends consecutively for the past 11 years. The company’s strong balance sheet and stable free cash flow generation indicate further dividend growth. It pays a quarterly dividend of $0.29 per share, with a yield of 7.00%. It has a payout ratio of 57%, improving from 115.6% in 2021.
Following the company’s Q2 2022 results, Barclays set a $23 price target on Medical Properties Trust, Inc. (NYSE:MPW) and kept an Overweight rating on the shares.
2. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of August 18: 7.98%
An American manufacturer of tobacco, Altria Group, Inc. (NYSE:MO)’s business has remained stable over the years, especially considering its shareholder commitment. In Q2 2022, the company paid $1.6 billion in dividends and repurchased over 10 million shares for $507 million. Moreover, it is determined to meet its dividend payout ratio target of approximately 80%.
Altria Group, Inc. (NYSE:MO) pays a quarterly dividend of $0.90 per share. The stock has a dividend yield of 7.98%, as recorded on August 18. The company holds one of the strongest track records of dividend growth, raising its payouts for 52 years straight.
In July, Jefferies set a $54 price target on Altria Group, Inc. (NYSE:MO) with a Buy rating on the shares, expecting a double-digit dividend yield in the coming years.
With over $1.8 billion worth of stakes, 48 hedge funds held positions in Altria Group, Inc. (NYSE:MO) in Q2 2022, according to Insider Monkey’s database. Arrowstreet Capital was the company’s largest stakeholder at the end of June, with stakes worth over $370.3 million.
1. Chesapeake Energy Corporation (NASDAQ:CHK)
Dividend Yield as of August 18: 9.25%
Chesapeake Energy Corporation (NASDAQ:CHK) is an American energy company that is engaged in the exploration of hydrocarbons. On August 2, the company declared its base and variable dividend of $2.32 per share, which will be paid to shareholders every quarter. The stock’s dividend yield stood at 9.25%, as of August 18.
In its recently announced Q2 results, Chesapeake Energy Corporation (NASDAQ:CHK) reported net cash provided by operating activities of $909 million, while its total net income came in at $1.2 billion. Its adjusted free cash flow stood at $494 million and due to this, the company raised its base dividend by 10% during the quarter. The company also doubled its share repurchase authorization to $2 billion.
In August, Benchmark initiated its coverage of Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $137 price target, appreciating the company’s improved capital intensity.
Chesapeake Energy Corporation (NASDAQ:CHK) remained popular among elite funds in Q2 2022, with 67 hedge funds in Insider Monkey’s database investing in the energy company, up from 59 in the previous quarter. These investments hold a value of over $3.5 billion.
ClearBridge Investments mentioned Chesapeake Energy Corporation (NASDAQ:CHK) in its Q1 2022 investor letter. Here is what the firm has to say:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.
Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market.
In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in Chesapeake to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis.”
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