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| | With the OECD warning that President Trump's trade tariffs have caused global growth to slow to a pace last seen during the Covid-19 era, dividends stocks are becoming an increasingly attractive prospect. That's because they offer consistent returns during periods of volatility, something that has been in plentiful supply this year. | If you're ready to consider diversifying your portfolio, these dividend-paying stocks are worth a second look. |
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| | Diamondback Energy | FANG | | Dividend: $1.00 / 3.9% | This West Texas oil and gas company has established a name for itself as a key player in the US energy sector thanks to its commitment to high operational efficiency and successful growth initiatives. | FANG's base cash dividend is $1.00 per share with $864 million paid to shareholders in the first quarter of the year, the equivalent of approximately 55% of its free cash flow. Its dividend yield is around 3.9%. | Diamondback says it will reduce its capital spending over the next 18 months. This move will increase its free cash flow, but it doesn't expect its output levels to be noticeably impacted. | In addition to dividends, Diamondback actively repurchases shares, returning significant capital to shareholders. Thanks to a round of stock buybacks in April, the company is currently ahead of its stated target of a 50% minimum shareholder return. |
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| | First Community Bankshares, Inc. | FCBC | | Dividend: $0.31 / 2.7% | There's an old saying that goes 'slow and steady' wins the race. That could well be the case for FCBC shareholders. While a dividend of $0.31 may seem modest by some standards, it's worth noting that First Community Bankshares has paid dividends consistently for the last four decades. Moreover, the dividend yield has increased slowly but surely over the last 10 years. | With a dividend yield of 3.3%, FCBC is a solid prospect for investors seeking long-term stability and a low-risk pick. It's comfortably above the industry average yield of 2.7% and way higher than the 1.56% paid by the bottom 25% of the market. The yield is expected to remain stable at 3.3% over the next three years. |
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| | Two Harbors Investment Corp. | TWO | | Dividend: $0.45 / 16.81% | Two Harbors Investment Corp could fit the bill if you're searching for a dividend stock with a higher risk-to-reward ratio. TWO is an MSR-focused real estate investment trust which recently reported a strong start to the year in its Q1 earnings report. Its dividend of $0.45 per share represents a 4.4% quarterly economic return on book value. TWO's dividend yield of 16.81% makes it a top high-dividend stock, but this does come with an element of risk. | Operational in a range of markets, TWO is subject to volatility due to the uncertain macroeconomic environment. It's worth noting that the dividend of $0.45 hasn't increased since 2023. |
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| | ConocoPhillips | COP | | Dividend: $0.78 / 3.7% | Specializing in oil and gas exploration and production, ConocoPhillips beat analyst expectations in Q1 with a total of $2.5 billion distributed to shareholders. It's one of the higher dividends on this list but could be subject to volatility in the near term due to the uncertainty surrounding oil prices. | Despite this unknown, COP remains a very attractive option for dividend stock option in the longer term, given the firm's investment in new projects, prudent cash management, and rosy outlook for natural gas prices. | Shareholders have received dividends consistently across the last decade with a 34% increase in 2024. Its dividend yield of 3.6% to 3.7% is competitive within the sector. For those with an eye to the shorter term, COP plans to repurchase more than $20 billion in shares over the next three years. |
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| | Home Depot | HD | | Dividend: $2.30 / 2.5% | Home Depot is among the most recognizable names in the US retail sector. The home improvement retailer has taken a stand against price rises, stating it won't pass on increased tariff costs to customers. This stance could see it proving popular with budget-pressured shoppers weary of rising prices after years of high inflation. | While its Q1 financial performance wasn't spectacular, it was solid, and it remains on course to fulfil its projections for the full year. It has invested heavily in its online offering and is poised to grow that side of its business in the coming years. | Analysts consider it to offer a good balance of risk-to-reward for shareholders. With a current yield of 2.5% per annum, it's a solid choice that can offset risk elsewhere in the medium term. |
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| | Final Thoughts | Dividend stocks are particularly appealing for investors with high-risk exposure elsewhere, and there are some very compelling options on the table right now.From energy to home improvement, banking to real estate, there's a wide choice of stocks to suit every risk appetite. |
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| | That's all for today's edition of the Dividend Brief.
Thanks for reading, and if you have any feedback or dividend stocks you want me to take a look at, just reply to this email!
—Noah Zelvis
DividendBrief.com | |
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