Unlocking the Power of High-Yielding Dividend Stocks
In today’s market, savvy investors are turning to strong companies with unusually high yields to bolster their portfolios. Two dividend stocks stand out for their impressive yields, making them worthy of consideration.
First, let’s look at Nike (NYSE: NKE), the iconic sports apparel giant generating $50 billion in annual revenue. Despite a 54% decline in stock price due to weak consumer spending, Nike’s forward dividend yield has surged to an above-average 1.83%. This marks the highest yield since 2009, based on a current quarterly per-share payout of $0.37. Although sales have fallen by double-digit rates year-over-year, Nike remains profitable, with a cushion to sustain dividends thanks to its current quarterly dividend being about half its quarterly earnings. The company’s new CEO, Elliott Hill, brings valuable experience in leading commercial and marketing operations, which should help engineer a turnaround. As Nike shifts its focus towards sports products, early progress is evident, with growth in men’s fitness, global football, and running footwear. With the global athletic wear market expected to reach $293 billion by 2029, investing in Nike could yield impressive returns and passive income.
Next, consider Verizon Communications (NYSE: VZ), a leading telecom operator boasting recurring revenue streams from wireless and broadband subscribers. Despite reporting healthy increases in postpaid phone net additions, Verizon’s shares still offer a high forward dividend yield of 6.16%, the highest in over a decade. The company’s growth strategy focuses on attractive add-on services, including deals on top digital entertainment subscriptions, to win and retain customers. With a 40-year history of paying dividends, Verizon’s current per-share quarterly dividend of $0.6775 represents a payout ratio of 60% based on adjusted earnings guidance for 2024. As AI-enabled smartphones drive strong sales, buying Verizon shares at their current high yield could lead to excellent returns for investors.
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