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The Economy Is Turning Ugly: 6 High-Yield Dividend Giants to the Rescue

Lee Jackson

Published: September 3, 2024 6:12 am

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• With bond yields falling, high-yield dividend stocks look enticing now.
• The first rate cut from the Federal Reserve is slated for September.
• Take advantage of this free report now: Access 2 legendary, high-yield dividend stocks Wall Street loves.

Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.

Despite the roaring and ongoing bull market rally that has been driving shares of anything remotely AI-related higher for almost two years, some cracks are starting to appear and could be ominous. We had a brief recession in the first half of 2022, which by definition is two quarters in a row of negative GDP. That bullet was dodged, and the market took off in the fall and has never looked back, except for the recent massive sell-off spurred in part by the Japanese carry trade.

Revised employment numbers are expected to wipe out almost a million reported jobs over the past year. Layoffs are increasing, with major companies like Dell Technologies Inc. (NYSE: DELL) laying off a stunning 12.500 employees and Cisco Systems Inc. (NASDAQ: CSCO) cutting 7% of their workforce despite reporting solid results. The chances for a recession later this year or in 2025 have grown dramatically.

Given the worrisome outlook, we screened our 24/7 Wall St. high-yield dividend stock research database for companies in sectors and industries that typically perform well in recessions like consumer staples, health care and real estate. Six top stocks jumped out; all are rated Buy at top Wall Street firms and pay dependable and safe dividends to shareholders. Speaking of dividends, grab this free report today.

Altria

This tobacco company offers value investors a rich 7.62% dividend. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild brand
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev S.A. (NYSE: BUD), the world’s largest brewer. The company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of their holdings but still leaves a hefty 8% of the outstanding shares in their back pocket. They also announced a $2.4 billion stock repurchase plan partially funded by the sale.

BXP

Formerly known as Boston Properties, this quality real estate giant offers size, safety, and a hefty 5.81% dividend. BXP Inc. (NYSE: BXP) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets:

• Boston
• Los Angeles
• New York
• San Francisco
• Seattle
• Washington, D.C.

Including properties owned by joint ventures, BXP’s portfolio totals 53.5 million square feet and 187 properties, including 11 properties under construction/redevelopment.

BXP’s properties include 165 office properties, 14 retail properties (including two under construction/redevelopment), seven residential properties (including two under construction), and one hotel.

The company is well known in the industry for its in-house building management expertise and responsiveness to clients’ needs.

BXP has a superior track record of developing premium central business district (CBD) office buildings, successful mixed-use complexes, suburban office centers, and build-to-suit projects for diverse creditworthy clients.

Comerica

Based in Dallas, this fast-growing banking center giant pays a substantial 5.11% dividend. Comerica Inc. (NYSE: CMA) provides various financial products and services.

The company operates through:

• Commercial banking
• Retail banking
• Wealth management
• Finance segments

The Commercial Bank segment offers:

• Commercial loans and lines of credit
• Deposits
• Cash management
• Capital market products
• International trade finance
• Letters of credit
• Foreign exchange management services
• Loan syndication services
• Payment and card services for small and middle-market businesses, multinational corporations, and governmental entities

The Retail Bank segment provides:

• Personal financial services, such as consumer lending
• Consumer deposit gathering
• Mortgage loan origination and various
• Consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit
• Residential mortgage loans and commercial products and services to micro-businesses

The Wealth Management segment offers products and services comprising:

• Fiduciary
• Private banking
• Retirement
• Investment management and advisory
• Investment banking and brokerage services
• Annuity products and life, disability, and long-term care insurance products

The Finance segment engages in the securities portfolio and asset and liability management activities.

Comerica operates in:

• Texas
• California
• Michigan
• Arizona
• Florida
• Canada
• Mexico

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed over the last few years as many are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide and pays a hefty 5.81% dividend, which has risen yearly for the past 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
  Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Trading not far from its lowest split-adjusted level in thirteen years, the stock is an incredible bargain at current levels and pays a massive dividend. The company reported revenues of $13.3 billion in the quarter, a 3% year-over-year operational growth, despite an anticipated decline in COVID revenues, and a 14% year-over-year operational increase in revenues from the company’s non-COVID product portfolio.

In addition, Pfizer raised full-year 2024 revenue guidance by $1 billion at the midpoint to a range of $59.5 to $62.5 billion.

UPS

With the explosion of internet commerce, this company has enormous growth potential and offers a rich 5.06% dividend. United Parcel Service Inc. (NYSE: UPS) is a package delivery company that provides transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance services.

It operates through two segments:

• U.S. Domestic Package
• International Package

The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States.

The International Package segment provides guaranteed-day and time-definite international shipping services, comprising guaranteed-time-definite express options in:

• Europe
• Asia
• the Indian subcontinent
• the Middle East
• Africa
• Canada
• Latin America

UPS is not just a package delivery company. It also provides diverse services, including international air and ocean freight forwarding, post-sales, and mail and consulting services.

Furthermore, it offers:

• Truckload brokerage services
• Supply chain solutions to the healthcare and life sciences industries
• Financial and information services
• Fulfillment and transportation management services

This broad portfolio of services ensures the company’s stability and potential for growth, making it an attractive investment option.

Verizon

This top telecommunications company offers tremendous value, trading at 8.75 times estimated 2025 earnings and paying investors a strong 6.51% dividend. Verizon Communications Inc. (NYSE: VZ), through its subsidiaries, provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.

It operates in two segments:

• Verizon Consumer Group
• Verizon Business Group

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as smartphones, tablets, smartwatches, and other wireless-enabled connected devices.

The segment also offers wireline services in Mid-Atlantic, northeastern United States, and the District of Columbia through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice
• Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally

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