As Wall Street continues to digest second-quarter earnings reports, investors have been focusing on how the pandemic has reshaped many businesses in the first half of the year.
There are undeniably some names that have run into trouble; however, several standout stocks have not only bounced back from the early troubles of 2020 but continue to power higher – paying juicy dividends to their shareholders to boot.
If you're looking for a stock that yields better than the typical S&P 500 company and has momentum at its back, consider one of these high-flying dividend stocks to buy for August:
Cincinnati Financial Corp. (CINF)
Medifast (MED)
Taiwan Semiconductor Manufacturing (TSM)
Watsco (WSO)
Whirlpool Corp. (WHR)
After raising its quarterly payout
from 56 cents per share to 60
cents per share back in January,
Cincinnati Financial Corp. (CINF)
marked an impressive 59
consecutive years of increasing
dividends.
That's enough to make investors stand up and take notice, but the latest news in the last month or so has been the impressive results across all of this insurance company's business lines. This success has helped lift the stock to its highest levels since March, and CINF has rocketed up more than 80% from its 2020 lows.
Insurance premiums should keep flowing reliably for the foreseeable future, too, powering even more dividend increases down the road.
Current yield: 2.9%
Cincinnati Financial Corp.
While eating out has largely fallen
by the wayside and grocery sales
have spiked because of social
distancing, another interesting
nutrition trend has been the
renewed interest in weight loss
products like those offered by Medifast (MED).
After all, part of the Medifast strategy is meal replacement across 30-day windows – so the pandemic has been a great time for consumers to order these nutrition kits to try to lose a few pounds. Many Americans are doing exactly that, and as a result, revenue is on the rise in 2020 and expected to jump by more than 10% next year as many of these customers stick to their nutrition plans.
That trend should continue to power generous dividends to MED shareholders into 2021 and beyond.
Current yield: 2.7%
Medifast
In the tech sector, one
company's pain is often another
company's gain.
That harsh reality was on display
in July with a surge for Taiwan Semiconductor Manufacturing (TSM) stock as rival chipmaker Intel Corporation (INTC) announced it was considering the end of all manufacturing operations and opting for an outsourced production model instead. As one of the largest semiconductor foundries in the world by any measure, TSM would be the natural recipient of any manufacturing that Intel gives up – and the stock recently jumped by more than 20% in short order as a result.
More importantly for long-term income investors, however, is what will surely be the company's stranglehold on manufacturing, which should fuel continued dividend growth for this $350 billion powerhouse.
Current yield: 3.5%
Taiwan Semiconductor Manufacturing
Watsco (WSO) is not exactly a
household name, but the nearly
$9 billion industrial company is
a crucial provider of parts and
equipment for air conditioning,
heating and refrigeration. These
include residential and commercial applications, with a network of contractors and dealers who service and install Watsco gear.
After a steady recovery to the underlying business in May – as the dust settled from the initial impact of the pandemic – followed by big sales growth in June, WSO blew the doors off its most recent earnings report, and shares ramped up by more than 15% in a single session as a result.
Income investors should look beyond this immediate pop, however, to the reliable history of payouts that have grown to $1.75 quarterly from just 70 cents a share back in 2015.
Current yield: 3.1%
Watsco
Appliance giant Whirlpool (WHR)
hasn't exactly set the world on fire
the last few years, and the stock
remains right about where it
was in 2015.
However, shares nearly tripled off their 52-week low earlier this year as pandemic-related concerns proved to be overblown. WHR is actually expecting revenue expansion in the mid-single digits in 2021 now that the dust has settled.
For dividend investors, the most appealing factor is that dividends have increased to $1.20 per share from just 43 cents back in 2010, providing a strong flow of income for long-term holders of WHR stock.
Current yield: 2.9%
Whirlpool Corp.
I know many investors recoil at the idea of buying banks. Numerous banks failed in 2008, or at least had to cut their dividends. So why would a dividend growth investor give the sector a chance?
Because many banks are trustworthy. In fact, a number of them managed to grow their profits and dividends even during the Great Financial Crisis.
Connecticut’s People’s United (PBCT) is one such firm. The bank is one of the Northeast’s larger regional operations, as it has more than 400 branches. It’s also one of the industry’s most conservative. Up until 2020, some investors were criticizing People’s United for not taking enough risk. As such, underperforming other bank stocks.
However, the bank’s cautious outlook has now paid off in spades. The company’s ultra-conservative loan book continues to perform admirably during the coronavirus recession. This has allowed the bank to maintain is highly-attractive 6.5% dividend yield. While competitors are forced to pull back, People’s United should be able to make more loans and bring in additional deposits given its impeccable financial strength.
Recessions are a great opportunity for the nation’s most rock solid banks. And for investors. as we can now get a bank which has increased dividends annually dating back to 1993 at a starting 6.5% yield. That’s a pretty incredible offer in a world where a bank certificate of deposit only yields 1%.
Dividend Yield: 6.5%
Years of Consecutive Dividend Growth: 27
People’s United Financial
I know many investors recoil at the idea of buying banks. Numerous banks failed in 2008, or at least had to cut their dividends. So why would a dividend growth investor give the sector a chance?
Because many banks are trustworthy. In fact, a number of them managed to grow their profits and dividends even during the Great Financial Crisis.
Connecticut’s People’s United (PBCT) is one such firm. The bank is one of the Northeast’s larger regional operations, as it has more than 400 branches. It’s also one of the industry’s most conservative. Up until 2020, some investors were criticizing People’s United for not taking enough risk. As such, underperforming other bank stocks.
However, the bank’s cautious outlook has now paid off in spades. The company’s ultra-conservative loan book continues to perform admirably during the coronavirus recession. This has allowed the bank to maintain is highly-attractive 6.5% dividend yield. While competitors are forced to pull back, People’s United should be able to make more loans and bring in additional deposits given its impeccable financial strength.
Recessions are a great opportunity for the nation’s most rock solid banks. And for investors. as we can now get a bank which has increased dividends annually dating back to 1993 at a starting 6.5% yield. That’s a pretty incredible offer in a world where a bank certificate of deposit only yields 1%.
Dividend Yield: 6.5%
Years of Consecutive Dividend Growth: 27
People’s United Financial