The Nasdaq-100 tracks the 100 largest non-financial companies on the Nasdaq stock exchange. It's not known for dividend stocks because most of its companies are in the tech sector, but it does have some solid dividend options.
As of the beginning of February, all three of the Nasdaq-100's highest-yielding stocks had a yield over 4.1%. High yields don't always mean good investments, but sometimes they make being patient worth it. Let's take a look at whether the Nasdaq-100's highest-paying dividend stocks are worth buying to begin the month.
| Company | Dividend Yield |
|---|---|
| Kraft Heinz (KHC +2.54%) | 6.74% |
| Comcast (CMCSA +2.52%) | 4.23% |
| Paychex (PAYX +1.37%) | 4.19% |
Source: YCharts. Dividend yield as of market open on Feb. 2.
Image source: Getty Images.
1. Kraft Heinz
With a yield of just over 6.7%, Kraft's stock looks attractive for income investors. The problem, though, is why its yield is so much higher: bad stock performance. The stock is down around 19% in the past 12 months (through Jan. 30).
Kraft is one of the largest food and beverage comapnies in the country, but it has been in a rough patch for a while. Consumers are shying away from traditional packaged foods (like its iconic Mac & Cheese) and choosing cheaper alternatives.
It also doesn't help that longtime Kraft shareholder Berkshire Hathaway may sell all its shares (27.5% stake). That's not exactly a stamp of confidence for a potential investor. Right now, I don't think Kraft is a buy.
NASDAQ: KHC
Key Data Points
2. Comcast
Comcast recently spun off its cable networks (such as CNBA, MSNBC, and USA) into a company called Versant Media Group. It did so to focus on its three money-making businesses: broadband internet, the Peacock streaming service, and theme parks.
You might not have thought of theme parks, but it's a pretty lucrative business for Comcast. In the latest quarter, theme park revenue increased nearly 22% to $2.9 billion.
NASDAQ: CMCSA
Key Data Points
Unfortunately, Comcast's broadband business -- which is typically its highest-margin business -- has been moving in the opposite direction. Last quarter, Comcast lost 181,000 broadband customers.
If you're an income investor looking for consistent dividends, Comcast delivers. Even though the stock finished January up 7.5%, I wouldn't bank on too much growth right now, but the dividend could help with some of the limited upside.
3. Paychex
Paychex specializes in payroll and HR for small to mid-sized businesses. Although its current yield is nearly 4.2%, Paychex's average yield over the past five years is 2.7%. It's high now because its stock has experienced a 30% drop over the past 12 months.
NASDAQ: PAYX
Key Data Points
Paychex's stock has struggled because of sentiment surrounding the job market and interest rates, but it's showing improvement on the business side. In the latest quarter, its total revenue, operating income, and earnings per share increased.
At its current price, Paychex seems like a good deal for long-term investors. I'd invest expecting slow growth -- especially with the slow labor market right now -- but the consistent income should make it worthwhile.
