If you're looking for some high-yielding dividend stocks, you're in luck. There are still many deals available, especially as tumbling share prices this year have sent yields up. While there are many high-risk investments out there that are offering unsustainable payouts, below are three stocks that provide attractive dividend payments and that are also safe, long-term buys.
1. Healthpeak Properties
Healthpeak Properties (PEAK -2.73%) is a real estate investment trust (REIT), and so it has to pay at least 90% of its income out as dividends. That means as long as Healthpeak's producing a profit, investors can expect a dividend. And with the company's focus on healthcare, it's one of the safer REITs that investors can invest in today. In its first-quarter results, which it released on May 5, Healthpeak's financials still looked strong for the period ending March 31.
Revenue of $585.2 million was up 34% from the prior-year period and the company's funds from operations (FFO) came in at $0.45 per share, up from $0.44 a year ago. FFO is what investors normally look at when evaluating a REIT as it more accurately reflects its performance than net income normally would.
In the earnings release, the company also noted that it's received at least 95% of April rent payments across its various property types, including life science, medical office, senior housing, and hospitals. For now, things still look stable for Healthpeak.
The COVID-19 pandemic hasn't impacted the company's financials significantly, but that could change as Healthpeak is battling outbreaks at some of its properties. As of April 30, a total of 54 of its properties had confirmed cases of COVID-19.
Currently, Healthpeak pays investors a quarterly dividend of $0.37, which on an annual basis is yielding around 6.1% -- well above the 2% yield that investors can expect from the typical S&P 500 stock.
Seagate Technology (STX) is a computer hardware company that provides consumers with data storage solutions to keep their information safe. And as more people are doing work from home and on the cloud, the need to perform more backups can ensure that the company's products will remain in strong demand during the COVID-19 pandemic.
The tech company released its third-quarter results on April 22, and there were no signs of trouble on its financials as a result of the pandemic. Sales were up 18% year over year, and the company's diluted per-share earnings of $1.22 were also up by 77%. That's great news for dividend investors as it makes the company's payout look very safe today. Seagate's payout ratio is currently less than 40%, which is very manageable. The Ireland-based company's recorded a strong profit margin of more than 10% in three of the past four quarters.
Currently, Seagate pays its shareholders a quarterly dividend of $0.65. On an annual basis, investors would be earning about 5.2%.
3. U.S. Bancorp
U.S. Bancorp (USB -0.24%) pays investors a quarterly dividend of $0.42 which means investors today can also earn 5.2% annually. That's an impressive yield, especially for a bank stock. It's not often that investors can get this high of a dividend from U.S. Bancorp:
There's a bit more risk involved with U.S. Bancorp's dividend only because it's going to be dependent on the strength of the economy. When the company released its first-quarter results on April 15, the bank's net income was down 31% from the prior-year period. However, the main driver behind the lower profit in Q1 was a result of the company increasing its provision for credit losses in anticipation of what could be a very unstable time in the economy.
The good news for investors is that the company's payout ratio remains manageable at around 42%, and so there aren't any immediate causes for concern. As long as U.S. Bancorp can continue producing profits and strong results, the dividend should remain safe. And that could turn out to be one heck of a deal for investors if they can lock-in a great price for a top bank stock, which is typically a great long-term investment all on its own, along with a high payout as well.
Which stock is the best of the three listed here?
All of the three dividend stocks above pay more than the average S&P 500 stock, but here's how they've done against the index this year:
They've all struggled relative to the markets, but that can make buying them now a great time while their prices are low.
But if you want to maximize safety, which would be a wise decision given how volatile the markets have been in 2020, then going with Seagate is your best bet today. You can get just as good a dividend with Seagate as you could with U.S. Bancorp without taking on as much risk. Healthpeak's also a bit riskier than Seagate only because it's having to deal with outbreaks of COVID-19 which could impact its business in the short term.
With its business still looking strong and facing relatively low risk, Seagate could be a great stock to hold both during and after the pandemic.