The spike in unemployment combined with a vaccine rollout that will take upwards of half a year to complete has made the stock market somewhat volatile. It’s possible the market could reach new heights as the new year arrives, or it could contract due to a shrinking GDP and concerns over the vaccine.

If you are uncertain whether this is the best time to invest in growth stocks, you are not alone. It might be a better time to put your money in high-yield dividend stocks.

Here is a quick look at four high-yield dividend stocks worth owning as we segue to a new year: Philip Morris International (PM), Toronto Dominion Bank (TD), Rio Tinto (RIO), and BHP Group (BBL).

Philip Morris International (PM)

It is not often you find a stock with fairly low volatility that provides nearly 6% in annual dividend payments. PM’s dividend yield is 5.65%.

Though PM has certainly received its fair share of flak for selling tobacco products, the company also deserves credit for its reduced-risk products, or RRPs for short, that keep customers happy while posing a lesser health risk. The fact that nearly one-quarter of PM revenue is derived from such RRPs is music to investors’ ears. In particular, PM’s IQOS device, a small unit that heats tobacco, is especially popular, constituting nearly 10% of PM’s total RRP revenue.

When it comes to the POWR Ratings, PM is nearly flawless, earning “A” grades in the Buy & Hold Grade and Trade Grade components, along with “B” grades in the Industry Rank and Peer Grade components. PM is ranked first out of nine stocks in the Tobacco industry.

Analysts have high hopes for PM, setting an average price target of $96.20, indicating a potential 14% upside. PM’s current price of $85 is all the more attractive, considering it has a relatively low forward P/E ratio of 16.65. 

Toronto Dominion Bank (TD)

If you’re receiving pennies per year in interest in your savings account, why not consider allocating some money to a stock with a 4.21% yield, such as TD? TD is a financial services provider that offers banking solutions to everyday people as well as commercial entities. TD even provides wealth management services along with wholesale services/products.

TD has “A” grades in the Buy & Hold Grade, Peer Grade, and Trade Grade components. The stock is ranked third out of 44 stocks in the Foreign Banks industry. Analysts have set an average price target of $58.60, indicating a potential 4% upside. If that doesn’t whet your appetite, this will: TD has a forward P/E ratio of a mere 12.13, indicating it is likely underpriced at its current trading level.

TD’s previous earnings report beat analyst estimates, coming in with a profit above $5 billion. TD quarterly profits are up 80% from this time last year. Add in the fact that TD’s CEO has made it clear he is open to a merger, and investors have all the more reason to consider this stock.

Rio Tinto (RIO)

Though mining companies are not exactly the sexiest investments, they are certainly worthy of your consideration when they pay a handsome dividend. RIO is one such mining company, with an attractive 4.18% dividend yield. This international mining business mines aluminum, zinc, silver, lead, tin, titanium, zircon, diamonds, gold, and more. The company’s operations are positioned throughout Europe, South Africa, Canada, Australia, and New Zealand.

Take a look at RIO’s POWR Ratings, and you will find they are perfect with “A” grades in the Peer Grade, Trade Grade, Industry Rank, and Buy & Hold Grade components. RIO is ranked second out of 33 stocks in the Industrial – Metals industry. RIO’s low forward P/E ratio of 10.13 indicates that the stock is currently undervalued.

BHP Group (BBL)

If you are hesitant to invest in a mineral production business simply because there is the potential for any given mineral’s price to plummet, consider a well-diversified mining company such as BBL. BBL has a 4.17% dividend yield, made possible by its extensive mining operations ranging from copper to iron ore, uranium, coal, gas, and oil.

The POWR Ratings show BBL has “A” grades in the Trade Grade, Industry Rank, and Buy & Hold Grade components. BBL is ranked 4th out of more than 30 stocks in the Industrial – Metals industry. 

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PM shares were trading at $84.19 per share on Tuesday morning, down $0.21 (-0.25%). Year-to-date, PM has gained 3.94%, versus a 15.54% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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