The stock market has had a tumultuous year, fostering fears of a potential recession among investors due to the soaring inflation and the Fed’s aggressive interest rate hikes. According to the World Bank, the global economic growth is expected to fall to 2.9% in 2022, from 5.7% last year.
Since the market volatility is not expected to ease anytime soon, investors shift toward dividend stocks to dodge the market risks. According to CNBC’s June survey, nearly 42% of the respondents said they would likely invest in dividend-paying stocks for the rest of the year.
Investing in quality dividend-paying stocks could help investors cushion their portfolios against market volatility and generate a steady income stream. Investors’ interest in dividend stocks is evident in the iShares Core High Dividend ETF’s (HDV) 5.4% returns over the past year.
Therefore, it could be wise to invest in quality dividend stocks Vodafone Group Public Limited Company (VOD), Gilead Sciences, Inc. (GILD), and BHP Group Limited (BHP). These companies possess an impressive history of paying dividends to their shareholders.
Vodafone Group Public Limited Company (VOD)
Headquartered in Newbury, the United Kingdom, VOD is a connectivity and digital services provider. It offers mobile, fixed-line services such as broadband, television (TV), and convergence services under the GigaKombi and Vodafone One names.
VOD’s four-year average dividend yield is 6.83%, and its forward annual dividend of $0.91 per share translates to a 6.36% yield. The company announced a dividend of $0.46 per share, payable on August 05, 2022.
During the fiscal year ended March 30, 2022, VOD’s total revenue increased 4% year-over-year to €45.58 billion ($46.49 billion). Its operating profit increased 11.1% year-over-year to €5.66 billion ($5.77 billion). The company’s net profit grew 389.6% from the year-ago value to €2.62 billion ($2.68 billion), while its EPS grew 1,786.8% from the prior-year quarter to 7.17c.
Analysts expect VOD’s revenue for fiscal 2023 to increase 1.1% year-over-year to $47.51 billion. Street expects its EPS to increase 72.2% per annum over the next five years. The stock has declined 3.7% year-to-date to close the last trading session at $14.38.
VOD’s POWR Ratings reflect solid prospects. It has an overall rating of B, translating to a Buy according to our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Growth and a B for Value and Stability. It is ranked #11 out of 47 stocks in the A-rated Telecom – Foreign industry. Click here to see the other ratings of VOD for Momentum, Sentiment, and Quality.
Gilead Sciences, Inc. (GILD)
GILD is a biopharmaceutical company focusing on developing and commercializing medicine for treating life-threatening diseases, including HIV, viral hepatitis, and cancer.
On August 4, 2022, GILD announced that it would acquire MiroBio, a U.K.-based biotechnology company. This acquisition provides the company with MiroBio’s unique platform technology and pipeline of immune checkpoint agonists. Its scientific approach to restoring immune balance for treating autoimmune diseases complements GILD’s inflammation research and development strategy.
GILD has been paying dividends for six consecutive years. Its dividend payouts have grown at a 6.3% CAGR in the past three years and a 7.8% CAGR in the past five years. Its forward annual dividend translates to a 4.72% yield, while its four-year average yield is 3.90%.
For the fiscal second quarter ended June 30, 2022, GILD’s total revenue increased marginally year-over-year to $6.26 billion. The company’s total product sales excluding Veklury increased 7% year-over-year to $5.69 billion.
For the quarter ending December 31, 2022, GILD’s EPS is expected to increase 104.4% year-over-year to $1.41. It has surpassed the EPS estimates in three of the trailing four quarters. Over the past three months, the stock has lost marginally to close the last trading session at $61.91.
GILD’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, translating to a Buy in our proprietary rating system.
It has an A grade for Value and a B for Sentiment and Quality. Out of the 401 stocks in the Biotech industry, it is ranked #8. To see the other ratings of GILD for Growth, Momentum, and Stability, click here.
BHP Group Limited (BHP)
Headquartered in Melbourne, Australia, BHP operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. It operates through Petroleum, Copper, Iron Ore, and Coal segments.
On June 1, 2022, BHP CEO Mike Henry said, “The merger of our petroleum assets with Woodside creates a leading global energy company with the scale and opportunity to help supply the energy needed for global growth and development in a rapidly decarbonizing world. Our shareholders will now be exposed to assets in two organizations, BHP and Woodside, each with a clear focus, strategy, and value proposition.”
BHP’s four-year average dividend yield is 7.23%, and its forward annual dividend of $6 translates to an 11.29% yield. Its dividends have grown at 43.7% and 45.3% CAGRs over the past three and five years, respectively.
For the half year ended December 31, 2021, BHP’s revenues increased 27% to $30.53 billion. Its operating profit increased 50.1% year-over-year to $14.85 billion. Its EPS came in at $186.20, up 143.4% year-over-year. Also, its profit after tax from continuing and discontinued operations came in at $10.51 billion, up 117.6% year-over-year.
For fiscal 2022, BHP’s revenue is expected to increase 7.9% year-over-year to $65.60 billion. Over the past month, the stock has declined 1.8% to close the last trading session at $53.13.
BHP’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. It has a B grade for Stability and Quality.
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VOD shares were trading at $14.65 per share on Friday morning, up $0.27 (+1.88%). Year-to-date, VOD has gained 0.84%, versus a -12.84% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...
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