Investing
4 Surprising Quality Growth Stocks That Pay at Least a 5% Dividend
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It gets harder every day to find quality yield in a world where most people are thinking that the “lower for longer” mantra is starting to become a reality. They have good reason to think that, because U.S. Treasury rates are among the highest investment grade sovereign debt yields in the world, and the 30-year bond is at a pathetic 2.26%. Not a very fair return for loaning the government money for 30 years.
At 24/7 Wall St. we are constantly on the lookout for stocks that pay good dividends, are not horribly overbought and are rated reasonably high by some of the top firms we cover. This week we found four companies that pay at least a 5% yield and are rated Buy by a top firm on Wall Street.
Frontier Communications
This is a rural local exchange carrier that the Merrill Lynch team has remained very positive on. Frontier Communications Corporation (NASDAQ: FTR) offers residential services, such as fiber-to-the-home and fiber-to-the-node broadband, as well as traditional copper-based broadband products; and commercial services, including Ethernet, dedicated Internet, multiprotocol label switching, time division multiplexing, data transport services, and optical transport services.
Frontier also provides the Frontier Secure suite of products for computer security, cloud backup and sharing, identity protection, equipment insurance and technical support. Its unified messaging services includes call forwarding, conference calling, caller identification, voicemail and call waiting services. It provides long distance network services and packages of communications services as well.
The company reported a better-than-anticipated first-quarter earnings before interest, tax, depreciation and amortization (EBITDA) number and guided in line to ahead of Wall Street estimates on post-Verizon deal cash flow. Frontier is the highest yielding non-energy component in the S&P 500.
Frontier investors a paid a huge 8.16% dividend. A Merrill Lynch analyst rates the stock a Buy with a $9 price target. The Wall Street consensus target price is lower at $6.07. The stock closed most recently at $5.15 a share.
Guess
This stock recently bounced off a 52-week low and could be heading higher. Guess? Inc. (NYSE: GES) designs, markets, distributes and licenses one of the world’s leading lifestyle collections of contemporary apparel and accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities. Its apparel is marketed under numerous trademarks, including Guess and Marciano.
The company’s lines include full collections of clothing, including jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear and intimate apparel. It also selectively grant licenses to manufacture and distribute a broad range of products that complement its apparel lines, including eyewear, watches, handbags, footwear, kids’ and infants’ apparel, outerwear, swimwear, fragrance, jewelry and other fashion accessories.
Guess shareholders are paid a huge 6.11% dividend. Wunderlich rates the stock a Buy, with its price target posted at a gigantic $27. The consensus target is set at $17.60, and the shares closed Tuesday at $14.74 apiece.
GlaxoSmithKline
This top global pharmaceutical could offer outstanding total return for investors as solid portfolio holding. GlaxoSmithKline PLC (NYSE: GSK) offers products in such therapeutic areas as respiratory, anti-virals, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterials, emesis, dermatology, rare diseases, immuno-inflammation, vaccines and HIV. It also provides consumer health care products in wellness, oral health, nutrition and skin health areas.
Last year the company announced that the dividend would stay at its current level through 2017, a solid pledge for those seeking security. In addition, the FDA approved the company’s Nucala add-on product for severe asthma with a very broad label. In addition, its ViiV Healthcare unit also reported promising data for its HIV treatments. GlaxoSmithKline plans to submit up to 20 new regulatory filings within the next five years, which confirms a very strong pipeline.
GlaxoSmithKline investors are paid an outstanding 5.12% dividend. The Merrill Lynch price target for the Buy-rated stock is $48. The Wall Street consensus price objective is set at $47. The shares closed most recently at $44.16.
Las Vegas Sands
While the gaming industry has had a tough year due to issues in Macau, this stock has hung in in reasonably well, although it remains way off highs printed in 2014. Las Vegas Sands Corp. (NYSE: LVS) is the world’s leading developer and operator of integrated resorts. Its properties include the five-diamond Venetian and Palazzo resorts and Sands Expo Center in Las Vegas, Sands Bethlehem in Eastern Pennsylvania and the iconic Marina Bay Sands in Singapore.
Through majority ownership in Sands China, the company owns a portfolio of properties on the Cotai Strip in Macau, including the Venetian Macao, the Plaza and Four Seasons Hotel Macao and Sands Cotai Central, as well as the Sands Macao on the Macao Peninsula.
The stock is trading at the cheapest levels in years, and the company recently reported that June was the first month since September 2014 that Macau mass volumes and revenues have increased. While many on Wall Street remain cautious, the long-term story remains very appealing.
Las Vegas Sands investors are paid a rich 5.7% dividend. The stock is rated Buy at Stifel, which has a $56 price target on it. The consensus target price is posted at $51.38. The stock closed most recently at $50.62.
Four great companies that at least one firm on Wall Street has a rating of Buy, and most have more. While they may be a touch risky for conservative accounts, they make good sense for long-term total return investors.
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