Maximizing retirement income is a very important goal for many investors. But building a retirement portfolio with a stable income stream that will last a lifetime remains a challenge for most investors, particularly in today’s low-interest-rate environment. However, high-yield dividend stocks can often generate much higher income than fixed-income instruments, especially currently.
While the stock market’s current fluctuations are a cause of concern for many income investors, betting on shares of established companies that have a long history of paying steady dividends and are fundamentally sound could be rewarding .
With their fundamental strength and potential to grow their dividends substantially over time, we believe high-yield stocks Broadcom Inc. (AVGO), AbbVie Inc. (ABBV), and B2Gold Corp. (BTG) are ideal holdings for a steady stream of retirement income.
Broadcom Inc. (AVGO)
AVGO is a developer and supplier of semiconductor infrastructure software solutions. Incorporated in 2018, the company operates through two segments – Semiconductor Solutions and Infrastructure Software. It also provides semiconductor devices, with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices worldwide.
In January, AVGO introduced its BCM4389 chip, which enables the world’s first Wi-Fi 6E phone—the Samsung Galaxy S21 Ultra. This unique chip was created specifically to unlock the value of Wi-Fi 6E for remote work, education, telemedicine, and gaming. Its development should establish Broadcom as a global technology leader in the semiconductor and infrastructure software solutions.
AVGO’s net revenue has increased 14% year-over-year to $6.66 billion in its fiscal first quarter ended January 31, 2021. Its net income grew 257.9% from its year-ago value to $1.38 billion, while its EPS has increased 312.2% year-over-year to $3.05. The company’s adjusted ebitda rose 20.7% from the prior-year quarter to $3.94 billion. And its cash and cash equivalents at the end of the first fiscal quarter were $9.55 billion, versus $7.62 billion at the end of the prior quarter.
AVGO has declared a dividend per share of $3.60 for the last quarter. The CAGR of its five-year dividend payout is 50.9%. The company has a dividend yield of 3.04%, and its stock’s four-year average yield is 2.9%.
A consensus EPS estimate of $6.57 for the next quarter, ending July 31, represents a 21.7% improvement year-over-year. Also, AVGO beat the Street’s EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $6.59 billion for the current quarter, ending April 30, represents a 14.2% increase from the same period last year. The stock has gained 144% over the past year.
AVGO’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
AVGO has a B grade of B for Growth, Momentum, and Quality. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #1 of 99 stocks.
In addition to the POWR Ratings grades I’ve just highlighted, you can see the AVGO ratings for Stability, Value, and Sentiment.
Note that AVGO is one of the few handpicked stocks currently in the Reitmeister Total Return portfolio. Learn more here.
AbbVie Inc. (ABBV)
Illinois-based pharmaceutical company ABBV develops and markets therapies including HUMIRA, RINVOQ and others that address a range of health conditions. The company’s products help treat migraine, lymphoma, psoriasis, rheumatoid arthritis, and more.
This month, the U.S. Food and Drug Administration extended the review period for ABBV’s supplemental New Drug Application (sNDA) for upadacitinib for the treatment of adult patients with active psoriatic arthritis. Last month, ABBV submitted a New Drug Application to the FDA for investigational AGN-190584 ophthalmic solution for the treatment of presbyopia. These recent therapy developments are expected to lead to significant gains for the company in the long run.
In the fourth quarter, ended December 31, 2020, ABBV’s worldwide net revenue climbed 59.2% year-over-year to $13.86 billion. The company’s global net revenues from its neuroscience portfolio were $1.389 billion, representing an increase of more than 100%. Its gross margin ratio was 66.2%, while its operating margin was 27.1%.
ABBV’s dividend payout has grown at a CAGR of 18.1% over the past five years. It has an annual dividend yield of 5.03%. The four-year average yield of the company’s stock is 4.4%.
Analysts expect ABBV’s revenue for the quarter ending March 31, 2021 to be $12.84 billion, representing 48.9% year-over-year growth. Its EPS is likely to increase at the rate of 4.8% per annum over the next five years. Also, ABBV has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. ABBV’s stock has gained 45.5% over the past year.
It is no surprise that ABBV has an overall B rating, which equates to Buy in our POWR Ratings system. It has an A grade for Value, and a B for Sentiment. Of 239 stocks in the Medical – Pharmaceuticals industry, it is ranked #15.
To see additional POWR Ratings for Stability, Growth, Momentum, and Quality for ABBV, click here.
B2Gold Corp. (BTG)
Incorporated in 2006, Canada-based BTG is a gold producer with operating mines in Mali, Philippines, and Namibia. It also holds an 81% interest in the Kiaka Project in Burkina Faso. In addition, it has evaluation and exploration assets in Mali, Namibia, Finland, Uzbekistan and Burkina Faso.
During the fourth quarter, ended December 31, 2020, BTG’s consolidated gold revenue was $479.53 million, representing an increase of 53% year-over-year, attributable to the increase in the average realized gold price and its increase in gold ounces sold. Its cash flow provided by its operating activities was $197 million, compared to $145 million in the fourth quarter of 2019, representing an increase of 36% over the fourth quarter of 2019. The company’s gross profit grew 99.6% from the prior-year quarter to $256.11 million.
For the last quarter, BTG declared a dividend per share of $0.04. The company pays an annual dividend of $0.16, which yields 3.42%. And its four-year average yield is 0.33%.
BTG’s revenue is estimated to increase 1.3% for fiscal 2022. Also, its stock has risen 55% over the past year.
BTG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. It has an A grade for Quality, and a B for Value and Momentum. In the B-rated Miners – Gold industry, the stock is ranked #11 of 45 stocks.
Click here to see the additional POWR Ratings for BTG (Stability, Sentiment, and Growth).
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AVGO shares were trading at $478.74 per share on Monday morning, up $4.28 (+0.90%). Year-to-date, AVGO has gained 10.19%, versus a 4.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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