Unlocking the Secret to High-Yielding Dividend Stocks
Income investors are often on the hunt for the perfect trifecta: solid income, attractive valuation, and strong share-price growth. While it may seem like a daunting task, finding stocks that check all these boxes is not impossible.
The Holy Grail of Dividend Stocks
UGI Corporation (NYSE: UGI), a utility company with a rich history dating back to 1882, offers an ultra-high-yield dividend stock that’s surprisingly affordable. With a forward dividend yield of 6.42%, the company has consistently paid dividends for 139 consecutive years and increased them for 36 consecutive years.
A Valuation That’s Hard to Resist
UGI’s valuation metrics are undeniably attractive. The stock trades at a mere 7.4 times forward earnings, with a price-to-sales ratio of 0.68 and a price-to-book ratio of 1.07. When compared to similar utility stocks, UGI’s valuation looks even more compelling, with the average forward price-to-earnings ratio for utilities in the S&P 500 standing at nearly 18.4.
Wall Street’s Bullish Outlook
Despite UGI’s underperformance this year, Wall Street analysts remain optimistic about the stock’s future. The average 12-month price target reflects an upside potential of 32%, with even the lowest target being 16% higher than the current share price.
Is UGI a Good Fit for Your Portfolio?
While growth investors may want to look elsewhere, value investors and income seekers could find UGI extremely appealing. The company’s capable new CEO and solid strategy to turn things around make it an attractive pick for those seeking a long-term winner.
Before You Invest…
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Disclosure
Keith Speights has positions in UGI. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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