• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

3 Dividend Stocks With 4%+ Yields for Income Investors

These names have strong business models, industry leadership positions, and attractive yields.
By BOB CIURA
Sep 10, 2022 | 07:30 AM EDT
Stocks quotes in this article: INTC, MMM, KHC, BRK.A, BRK.B

The disappointing performance of the stock market has a silver lining, which is that dividend yields are rising across the market. Many stocks that had low dividend yields due to their soaring stock prices have seen their dividend yields elevate. Even quality companies with stable business models are seeing their dividend yields reach multi-year highs.

The following three large-cap stocks have strong business models, leadership positions in their industry, and have high dividend yields above 4%.

Intel Corp.

Intel (INTC) is the largest manufacturer of microprocessors for personal computers, shipping about 85% of the world's microprocessors. Intel also manufactures products like servers and storage devices that are used in cloud computing. Intel employs more than 120,000 people worldwide and has a current market capitalization of $149 billion. The company generates about $67 billion in annual sales.

On July 28, Intel reported second-quarter results on for the period ending June 30, 2022. Revenue declined 22% to $15.3 billion and was $2.6 billion below estimates. On an adjusted basis, revenue fell 17%. Adjusted earnings per share of $0.29 compared to $1.24 in the prior year and was $0.41 less than expected.

Revenue for the PC-Centric business decreased 25% to $7.7 billion for the quarter, primarily due to component shortages as well as the modem ramp down. Datacenter and AI Group was lower by 16% to $4.6 billion. Network and Edge Group grew 11% to $2.3 billion due to the ongoing recovery from Covid-19. Mobileye and Accelerated Computing Systems and Graphics Group grew 41% and 5%, respectively. Intel Foundry Services fell 54%.

Intel now expects to see revenue of $65 billion to $68 billion for the year, below consensus of $74.4 billion. The company is now projected to earn $2.60 per share in 2022, down from $4.16 and $3.79 previously.

Even though Intel's profits are down this year, the company generates more than enough cash flow to continue to raise its dividend. On January 26, 2022, Intel increased its dividend 5%. Intel generated $11.3 billion in free cash flow in 2021 and returned $8 billion to shareholders last year. While Intel paused its dividend growth in 2014, the company has increased it every year since. Overall, the dividend has a CAGR of 5.3% since 2012. The shares currently yield 4.8%.

3M Co.

3M (MMM) sells more than 60,000 products that are used every day in homes, hospitals, office buildings and schools around the world. It has about 95,000 employees and serves customers in more than 200 countries.

On February 8, 3M announced it was raising its quarterly dividend 0.7% to $1.49, extending the company's dividend growth streak to 64 consecutive years.

3M is facing several lawsuits, including nearly 300,000 claims that its earplugs used by U.S. combat troops and produced by a subsidiary were defective. On July 26, 3M announced that Aearo Technologies had filed for bankruptcy as it looks to conclude lawsuits related to its combat ear plugs.

Meanwhile, the company continues to report strong profitability. In the second quarter, revenue decreased 2.8% to $8.7 billion, but was in line with expectations. Adjusted EPS of $2.48 compared to $2.59 in the prior year, but was $0.04 above estimates. Organic growth for the quarter was 1% as a stronger U.S. dollar offset gains. The company also announced that it would be spinning off its Health Care segment into a standalone entity, which would have had $8.6 billion of revenue in 2021. The transaction is expected to close by the end of 2023.

3M provided an updated outlook for 2022, with the company now expecting adjusted EPS of $10.30 to $10.80 for the year. With an annualized dividend payout of $5.96 per share, 3M's dividend is sufficiently covered by EPS. 3M is not recession proof, but the company has proven itself to be resilient during the difficult times in the economic cycle. While dividend growth has outpaced earnings growth in recent years, 3M's dividend track record is virtually second to none. When the next recession occurs, it is likely that growth will slow, though we don't feel the dividend is in any danger of being cut.

The shares currently yield 4.9%.

Kraft Heinz

Kraft Heinz (KHC) is a processed food and beverages company which owns a product portfolio that includes food products such as condiments, sauces, cheese & dairy, frozen & chilled meals, and infant diet & nutrition. The company was created in 2015 in a merger between Kraft Food Group and H. J. Heinz Company, orchestrated by Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) and 3G Capital.

Kraft Heinz reported its second-quarter earnings results on July 27. The company's revenues totaled $6.6 billion during the quarter, which was down 1% compared to what it generated during the previous year's period. This was still slightly better than what the analyst community had expected.

Kraft Heinz' organic sales were up by 10%. Organic sales growth was possible thanks to price increases, whereas volumes were down slightly. Forex headwinds and M&A were responsible for reported revenue being down.

The company generated EPS of $0.70 during the second quarter, which slightly beat the consensus estimate. EPS were down 10% versus the previous year's quarter, being impacted by a difficult comparison and adverse currency rate movements. Kraft Heinz' management stated that they see organic net sales rising at a high-single digits pace in 2022, and is forecasting EBITDA to come in between $5.8 billion and $6.0 billion during the current year.

Kraft Heinz' brands are strong and recognized by most consumers, and demand for food is not cyclical or dependent on economic conditions. The company therefore should be able to remain profitable in economic downturns, as do most consumer staples companies. Kraft Heinz' brands function as a competitive advantage.

The company does not have a long dividend history. The dividend looks sustainable at the current level, with a payout ratio of 60%.

The shares currently yield 4.3%.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Ciura had no positions in any securities mentioned.

TAGS: Dividends | Fundamental Analysis | Investing | Markets | Stocks | Trading | Value Investing | U.S. Equity

More from Stocks

Trading Like It's 1999!

James "Rev Shark" DePorre
Jan 27, 2023 4:46 PM EST

The mood was bubbly as speculative investors piled into stocks with any minor exposure to Artificial Intelligence.

More Good Dividend Stocks With Pretty Charts

Bruce Kamich
Jan 27, 2023 1:31 PM EST

In this second part of a two-part series, we look at the final five of 10 stocks with the best of the both worlds.

Even Some Out of Fashion Names Are Now Back in Style

Jonathan Heller
Jan 27, 2023 12:30 PM EST

Sure, we're only one month in to 2023, but so far these stocks are starting the new year with a bang.

I'm Making Small Bets With These 2 Stocks

Bret Jensen
Jan 27, 2023 11:30 AM EST

While I remain cautious on the overall market, I continue to act upon the limited opportunities I'm finding in the current market.

Chevron Is Crushing It and for My Portfolio Too: Here's the Trade

Stephen Guilfoyle
Jan 27, 2023 10:51 AM EST

The only reason to exit the stock now is profit-taking.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:48 AM EST REAL MONEY

    Watch Doug Kass on the Daily Rundown!

    In today's Action Alerts PLUS Daily Rundown, Doug ...
  • 11:03 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend On Real Money

    It's time to start using this power to build great...
  • 03:06 PM EST BOB LANG

    LEAPS Webinar

    This week, I offered a free webinar session talkin...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login