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3 Stocks With Robust Dividend Growth That Pay Investors Handsomely
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It’s been anything but smooth sailing in the market throughout 2022. Valuations have been slashed, and bears have had the upper hand all year. Buyers have entirely retreated, and for understandable reasons – we’ve found ourselves in a very unique economic environment coming out of a once-in-a-lifetime pandemic.
With inflation at levels we haven’t seen in decades, the Fed has been forced to become aggressive, cranking borrowing rates to alleviate the issue impacting the pockets of consumers.
Tech has been hit the hardest, and for understandable reasons – valuation levels became somewhat unreasonable during the initial phases of the pandemic in the low-interest-rate environment.
During times of market weakness, it’s beneficial to have a solid income stream from your investments. After all, who doesn’t enjoy getting paid?
We’re here to look at three stocks – Arbor Realty Trust (ABR - Free Report) , Golden Ocean Group Limited (GOGL - Free Report) , and Gerdau SA (GGB - Free Report) – that have high dividend yields paired with solid dividend growth rates.
The year-to-date chart below shows the performance of all three stocks while blending in the S&P 500 as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have performed relatively well when compared to the S&P 500, undoubtedly a positive. Let’s get into why these three stocks would be a solid bet for investors looking to add an income stream to their portfolio amid a challenging economic environment.
Gerdau SA
Gerdau SA (GGB - Free Report) is the leading company in the production of long steel in the Americas and one of the major suppliers of specialty long steel in the world. The company transforms millions of metric tons of scrap into steel each year. GGB resides within the Zacks Steel – Producers Industry, which currently ranks in the top 10% of all Zacks Industries.
The company has robust dividend metrics. GGB’s annual dividend yield sits at an enticing 6.1%, with a payout ratio sitting very sustainably at 9% of earnings. On top of that, the company has been rapidly increasing its dividend, with 11 increases in just five years, giving it a five-year annualized dividend growth rate of a massive 65%. Additionally, the yield is much higher than that of the S&P 500.
Image Source: Zacks Investment Research
GGB also has an enticingly low 3.5X forward earnings multiple, nicely below highs of 6.6X earlier in 2022. The value is well below the S&P 500’s forward P/E ratio of 17.4X, reflecting a staggering 80% discount relative to the general market. GGB boasts a Style Score of a B for Value.
GGB is a Zacks Rank #2 (Buy).
Golden Ocean Group Limited
Golden Ocean Group Limited (GOGL - Free Report) is a leading international dry bulk shipping company. The company provides customers with flexible and reliable transportation services and develops strong industry relations with partners and customers. It resides within the Zacks Transportation – Shipping Industry, which is in the top 12% of all Zacks Industries.
GOGL enjoys rewarding its shareholders via its 14.9% dividend yield - much higher than the S&P 500’s 1.5% annual yield. Additionally, the company is committed to increasingly rewarding its shareholders, as displayed by its eight dividend increases in the past five years and a five-year annualized dividend growth rate of a massive 56%.
Image Source: Zacks Investment Research
The company’s forward earnings multiple sits on the low side at 5.5X, well below highs earlier this year of 10.3X, and much lower than the S&P 500’s value – shares trade at a deep 68% discount relative to the general market. The company sports a Style Score of an A for Value.
GOGL is a Zacks Rank #2 (Buy).
Arbor Realty Trust
Arbor Realty Trust (ABR - Free Report) is a specialized real estate finance company investing in real estate-related bridge and mezzanine loans, preferred equity, mortgage-related securities, and other real estate-related assets.
ABR’s annual dividend yield sits pretty in the double-digits at 10%, with a payout ratio sitting at 75% of earnings. What sticks out to me is the company’s commitment to rewarding shareholders – the company has increased its dividend a jaw-dropping 16 times over the last five years and has a five-year annualized dividend growth rate in the double-digits of 15.5%. The yield is much higher than that of the S&P 500.
Image Source: Zacks Investment Research
ABR has enticing valuation levels, further displayed by its Style Score of B for Value. Its forward earnings multiple sits nicely at 8.4X, well below highs of 13.3X in 2019, and well below the five-year median of 10.3X. In addition, shares trade at a steep 51% discount relative to the S&P 500.
Image Source: Zacks Investment Research
ABR is a Zacks Rank #2 (Buy).
Bottom Line
Investing for an income stream is a popular way for investors to balance out a portfolio. During times of overall market weakness, income-related stocks provide a reliable cash flow, undoubtedly easing drawdowns.
All three companies above have robust dividend metrics, solid valuation levels, and all carry a high Zacks Rank. These three stocks would be great places to start for investors with an appetite for income.
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3 Stocks With Robust Dividend Growth That Pay Investors Handsomely
It’s been anything but smooth sailing in the market throughout 2022. Valuations have been slashed, and bears have had the upper hand all year. Buyers have entirely retreated, and for understandable reasons – we’ve found ourselves in a very unique economic environment coming out of a once-in-a-lifetime pandemic.
With inflation at levels we haven’t seen in decades, the Fed has been forced to become aggressive, cranking borrowing rates to alleviate the issue impacting the pockets of consumers.
Tech has been hit the hardest, and for understandable reasons – valuation levels became somewhat unreasonable during the initial phases of the pandemic in the low-interest-rate environment.
During times of market weakness, it’s beneficial to have a solid income stream from your investments. After all, who doesn’t enjoy getting paid?
We’re here to look at three stocks – Arbor Realty Trust (ABR - Free Report) , Golden Ocean Group Limited (GOGL - Free Report) , and Gerdau SA (GGB - Free Report) – that have high dividend yields paired with solid dividend growth rates.
The year-to-date chart below shows the performance of all three stocks while blending in the S&P 500 as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have performed relatively well when compared to the S&P 500, undoubtedly a positive. Let’s get into why these three stocks would be a solid bet for investors looking to add an income stream to their portfolio amid a challenging economic environment.
Gerdau SA
Gerdau SA (GGB - Free Report) is the leading company in the production of long steel in the Americas and one of the major suppliers of specialty long steel in the world. The company transforms millions of metric tons of scrap into steel each year. GGB resides within the Zacks Steel – Producers Industry, which currently ranks in the top 10% of all Zacks Industries.
The company has robust dividend metrics. GGB’s annual dividend yield sits at an enticing 6.1%, with a payout ratio sitting very sustainably at 9% of earnings. On top of that, the company has been rapidly increasing its dividend, with 11 increases in just five years, giving it a five-year annualized dividend growth rate of a massive 65%. Additionally, the yield is much higher than that of the S&P 500.
Image Source: Zacks Investment Research
GGB also has an enticingly low 3.5X forward earnings multiple, nicely below highs of 6.6X earlier in 2022. The value is well below the S&P 500’s forward P/E ratio of 17.4X, reflecting a staggering 80% discount relative to the general market. GGB boasts a Style Score of a B for Value.
GGB is a Zacks Rank #2 (Buy).
Golden Ocean Group Limited
Golden Ocean Group Limited (GOGL - Free Report) is a leading international dry bulk shipping company. The company provides customers with flexible and reliable transportation services and develops strong industry relations with partners and customers. It resides within the Zacks Transportation – Shipping Industry, which is in the top 12% of all Zacks Industries.
GOGL enjoys rewarding its shareholders via its 14.9% dividend yield - much higher than the S&P 500’s 1.5% annual yield. Additionally, the company is committed to increasingly rewarding its shareholders, as displayed by its eight dividend increases in the past five years and a five-year annualized dividend growth rate of a massive 56%.
Image Source: Zacks Investment Research
The company’s forward earnings multiple sits on the low side at 5.5X, well below highs earlier this year of 10.3X, and much lower than the S&P 500’s value – shares trade at a deep 68% discount relative to the general market. The company sports a Style Score of an A for Value.
GOGL is a Zacks Rank #2 (Buy).
Arbor Realty Trust
Arbor Realty Trust (ABR - Free Report) is a specialized real estate finance company investing in real estate-related bridge and mezzanine loans, preferred equity, mortgage-related securities, and other real estate-related assets.
ABR’s annual dividend yield sits pretty in the double-digits at 10%, with a payout ratio sitting at 75% of earnings. What sticks out to me is the company’s commitment to rewarding shareholders – the company has increased its dividend a jaw-dropping 16 times over the last five years and has a five-year annualized dividend growth rate in the double-digits of 15.5%. The yield is much higher than that of the S&P 500.
Image Source: Zacks Investment Research
ABR has enticing valuation levels, further displayed by its Style Score of B for Value. Its forward earnings multiple sits nicely at 8.4X, well below highs of 13.3X in 2019, and well below the five-year median of 10.3X. In addition, shares trade at a steep 51% discount relative to the S&P 500.
Image Source: Zacks Investment Research
ABR is a Zacks Rank #2 (Buy).
Bottom Line
Investing for an income stream is a popular way for investors to balance out a portfolio. During times of overall market weakness, income-related stocks provide a reliable cash flow, undoubtedly easing drawdowns.
All three companies above have robust dividend metrics, solid valuation levels, and all carry a high Zacks Rank. These three stocks would be great places to start for investors with an appetite for income.