Three Affordable Dividend Stocks Offering Returns Above Double the Typical S&P 500 Average
Investing in high-yield stocks can be a great way to secure a steady income flow, but with the S&P 500 average yield hovering around 1.3%, you might find yourself seeking greener pastures. Fortunately, there are several quality stocks that boast dividend yields significantly higher than this, and they don't require taking on excessive risk or draining your wallet. Let's explore three such stocks ideal for income-focused investors: Bristol Myers Squibb (BMY), Target (TGT), and Suncor Energy (SU).
1. Bristol Myers Squibb
When it comes to investing in the healthcare sector, Bristol Myers Squibb is a solid option. Its diversified business is starting to look more secure lately, thanks to the company's focus on research and development. Although some have raised concerns about patent cliffs and high debt, this company appears to be steering in the right direction.
In September 2024, the FDA approved Cobenfy, a drug for treating schizophrenia, which analysts predict could bring in a whopping $7.5 billion in revenue. Furthermore, the FDA also expanded the use case for cancer drug Breyanzi, generating around $2 billion in peak sales. Despite investor reluctance due to patent expirations and high debt, Bristol Myers Squibb's commitment to growth is becoming increasingly evident. With a dividend yield of an enticing 4.2%, Bristol Myers Squibb can provide a delightful source of recurring income for your portfolio.
2. Target
In recent times, consumers have scaled back on discretionary purchases due to increasing costs, leading investors to grow wary of retail stocks like Target. However, with the economy eventually expected to bounce back, the stock's current state of undervaluation presents an interesting opportunity.
In the last three quarters, Target's revenue has remained steady, despite stagnating, while earnings grew by over 8%. Although facing some near-term headwinds, the long-term prospects for Target are optimistic. Becoming a Dividend King by raising its payouts for more than 50 consecutive years, Target offers a 2.9% dividend yield that is unlikely to disappoint income-focused investors.
3. Suncor Energy
In the energy sector, Canadian-based company Suncor Energy is a noteworthy dividend stock option. With a focus on oil and gas, investing in Suncor can help you diversify your portfolio. Although the business is subject to volatility due to commodity prices, Suncor has consistently proved to be a reliable investment.
Over the past three years, Suncor has recorded an impressive 40% increase in value. With operating profits of $6.67 billion in the past 12 months and a robust financial position, Suncor can provide investors with a solid payout, yielding 4.1%. If you're looking to add a dividend stock to your portfolio with strong returns potential, consider Suncor Energy.
By incorporating these three dividend payers – Bristol Myers Squibb, Target, and Suncor Energy – into your investment portfolio, you can create a complementary mix of income-generating options suited to your needs.
After analyzing the financial performance of Bristol Myers Squibb, it's clear that despite patent cliffs and high debt, this healthcare company has shown commitment to growth and boasts an enticing 4.2% dividend yield, making it an attractive option for investors seeking income.
Similarly, with the economy forecasted to recover, Target's current undervaluation presents an intriguing opportunity for income-focused investors. As a Dividend King, regularly increasing its dividends for over 50 years, Target offers a reliable 2.9% yield, making it a worthwhile consideration in a diversified finance portfolio.
