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3 Highly-Ranked Stocks Income Investors Can't Ignore
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Income investing is a lucrative strategy that many investors love. After all, it’s for a reason that makes plenty of sense – we love getting paid.
During times of overall market weakness, an income stream helps alleviate drawdowns within positions.
And, of course, there are few things sweeter than having your investments pay you.
Surprisingly enough, there are plenty of stocks out there displaying remarkable strength in 2022 paired with hefty dividend payouts, such as Sociedad Quimica y Minera (SQM - Free Report) , HSBC Holdings (HSBC - Free Report) , and Enterprise Products Partners (EPD - Free Report) .
Below is a chart illustrating the YTD performance of all three stocks with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have been notably stronger than the general market in 2022, telling us that buyers have been out in full force.
In addition, all three stocks carry either a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy), making them appear even more attractive.
Let’s take a deeper dive into each one.
Sociedad Quimica y Minera
Sociedad Quimica y Minera (SQM - Free Report) produces and distributes specialty plant nutrients, iodine, lithium, potassium chloride and sulfate, industrial chemicals, and other products and services.
The company sports a Zacks Rank #2 (Buy) paired with an overall VGM Score of an A.
SQM's earnings outlook has turned visibly bright over the last several months.
Image Source: Zacks Investment Research
SQM’s dividend metrics would thrill any income investor - the company’s annual dividend yields a steep 8.9% paired with a staggering five-year annualized dividend growth rate of 12%.
In addition, the yield is much higher than its Zacks Sector average. Further, SQM has impressively increased its dividend payout ten times over the last five years.
Image Source: Zacks Investment Research
SQM’s forward earnings multiple resides above its Zacks Basic Materials Sector average of 6.9X. However, the current value of 8.2X is a fraction of its 25.9X five-year median and is nowhere near highs of 58.1X in 2021.
The company rocks a Style Score of an A for Value.
Image Source: Zacks Investment Research
Enterprise Products Partners
Enterprise Products Partners (EPD - Free Report) is a partnership that provides services to producers and consumers of commodities that are natural gas, natural gas liquids, oil, and refined petrochemical products.
EPD carries a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
To little surprise, analysts have raised their earnings outlook significantly over the last several months.
Image Source: Zacks Investment Research
EPD is dedicated to rewarding its shareholders, and here’s why – EPD’s annual dividend yields a steep 7.3%, much higher than its Zacks Sector average.
In addition, EPD has increased its dividend payout 13 times in the last five years, with a five-year annualized dividend growth rate of nearly 2%.
Image Source: Zacks Investment Research
Enterprise Product Partners has consistently exceeded bottom-line estimates, surpassing the Zacks Consensus EPS Estimate in seven of its last ten prints.
Top-line results have also been stellar; EPD has chained together eight consecutive revenue beats. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
HSBC Holdings
HSBC Holdings (HSBC - Free Report) is a major global banking and financial services firm operating through an international network of offices in Europe, North America, the Middle East, and several other locations.
HSBC rocks a Zacks Rank #1 (Strong Buy) with an overall VGM Score of a B.
Like SQM and EPD, the company’s earnings outlook has improved significantly over the last several months.
Image Source: Zacks Investment Research
It’s hard to ignore HSBC’s dividend metrics – HSBC’s annual dividend yields an attractive 4.4%, nearly double its Zacks Finance Sector average.
Further, HSBC Holdings has upped its dividend payout four times over the last five years, with a sustainable payout ratio sitting at 37% of earnings.
Image Source: Zacks Investment Research
To put the cherry on top, HSBC Holdings shares trade at rock-solid valuation levels, further displayed by its Style Score of a B for Value.
HSBC’s forward earnings multiple sits at a cheap 8.8X, not even close to its five-year median of 11.5X and representing a steep 38% discount relative to its Zacks Sector average.
Image Source: Zacks Investment Research
Bottom Line
Investing for an income stream is a lucrative and widely-deployed strategy by investors. During times of broader market weakness, an income stream limits drawdowns in other positions, providing flexibility.
Generally, investors like to target stocks with high dividend yields, precisely what the three stocks above provide.
In addition to steep dividend payouts, all three stocks sport a strong Zacks Rank, telling us that business is fruitful and their near-term earnings outlook is bright.
To top it all off, all three stocks have enjoyed stellar price action YTD, alluding that buyers have been out in full force, defending the stocks at a much higher level than most.
For those looking for stocks with attractive dividend yields paired with a bright earnings picture, Sociedad y Quimica Minera (SQM - Free Report) , HSBC Holdings (HSBC - Free Report) , and Enterprise Product Partners (EPD - Free Report) all deserve a watchlist spot.
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3 Highly-Ranked Stocks Income Investors Can't Ignore
Income investing is a lucrative strategy that many investors love. After all, it’s for a reason that makes plenty of sense – we love getting paid.
During times of overall market weakness, an income stream helps alleviate drawdowns within positions.
And, of course, there are few things sweeter than having your investments pay you.
Surprisingly enough, there are plenty of stocks out there displaying remarkable strength in 2022 paired with hefty dividend payouts, such as Sociedad Quimica y Minera (SQM - Free Report) , HSBC Holdings (HSBC - Free Report) , and Enterprise Products Partners (EPD - Free Report) .
Below is a chart illustrating the YTD performance of all three stocks with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have been notably stronger than the general market in 2022, telling us that buyers have been out in full force.
In addition, all three stocks carry either a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy), making them appear even more attractive.
Let’s take a deeper dive into each one.
Sociedad Quimica y Minera
Sociedad Quimica y Minera (SQM - Free Report) produces and distributes specialty plant nutrients, iodine, lithium, potassium chloride and sulfate, industrial chemicals, and other products and services.
The company sports a Zacks Rank #2 (Buy) paired with an overall VGM Score of an A.
SQM's earnings outlook has turned visibly bright over the last several months.
Image Source: Zacks Investment Research
SQM’s dividend metrics would thrill any income investor - the company’s annual dividend yields a steep 8.9% paired with a staggering five-year annualized dividend growth rate of 12%.
In addition, the yield is much higher than its Zacks Sector average. Further, SQM has impressively increased its dividend payout ten times over the last five years.
Image Source: Zacks Investment Research
SQM’s forward earnings multiple resides above its Zacks Basic Materials Sector average of 6.9X. However, the current value of 8.2X is a fraction of its 25.9X five-year median and is nowhere near highs of 58.1X in 2021.
The company rocks a Style Score of an A for Value.
Image Source: Zacks Investment Research
Enterprise Products Partners
Enterprise Products Partners (EPD - Free Report) is a partnership that provides services to producers and consumers of commodities that are natural gas, natural gas liquids, oil, and refined petrochemical products.
EPD carries a Zacks Rank #2 (Buy) with an overall VGM Score of an A.
To little surprise, analysts have raised their earnings outlook significantly over the last several months.
Image Source: Zacks Investment Research
EPD is dedicated to rewarding its shareholders, and here’s why – EPD’s annual dividend yields a steep 7.3%, much higher than its Zacks Sector average.
In addition, EPD has increased its dividend payout 13 times in the last five years, with a five-year annualized dividend growth rate of nearly 2%.
Image Source: Zacks Investment Research
Enterprise Product Partners has consistently exceeded bottom-line estimates, surpassing the Zacks Consensus EPS Estimate in seven of its last ten prints.
Top-line results have also been stellar; EPD has chained together eight consecutive revenue beats. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
HSBC Holdings
HSBC Holdings (HSBC - Free Report) is a major global banking and financial services firm operating through an international network of offices in Europe, North America, the Middle East, and several other locations.
HSBC rocks a Zacks Rank #1 (Strong Buy) with an overall VGM Score of a B.
Like SQM and EPD, the company’s earnings outlook has improved significantly over the last several months.
Image Source: Zacks Investment Research
It’s hard to ignore HSBC’s dividend metrics – HSBC’s annual dividend yields an attractive 4.4%, nearly double its Zacks Finance Sector average.
Further, HSBC Holdings has upped its dividend payout four times over the last five years, with a sustainable payout ratio sitting at 37% of earnings.
Image Source: Zacks Investment Research
To put the cherry on top, HSBC Holdings shares trade at rock-solid valuation levels, further displayed by its Style Score of a B for Value.
HSBC’s forward earnings multiple sits at a cheap 8.8X, not even close to its five-year median of 11.5X and representing a steep 38% discount relative to its Zacks Sector average.
Image Source: Zacks Investment Research
Bottom Line
Investing for an income stream is a lucrative and widely-deployed strategy by investors. During times of broader market weakness, an income stream limits drawdowns in other positions, providing flexibility.
Generally, investors like to target stocks with high dividend yields, precisely what the three stocks above provide.
In addition to steep dividend payouts, all three stocks sport a strong Zacks Rank, telling us that business is fruitful and their near-term earnings outlook is bright.
To top it all off, all three stocks have enjoyed stellar price action YTD, alluding that buyers have been out in full force, defending the stocks at a much higher level than most.
For those looking for stocks with attractive dividend yields paired with a bright earnings picture, Sociedad y Quimica Minera (SQM - Free Report) , HSBC Holdings (HSBC - Free Report) , and Enterprise Product Partners (EPD - Free Report) all deserve a watchlist spot.