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Philip van Doorn

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March 15, 2020, 10:23 a.m. EDT

These strong dividend payers sank with the stock market — and now their yields have shot up

Dan Peris of Federated Hermes highlights five sectors of the S&P 500 where income investors should look for dividend stocks that have become attractive

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By Philip van Doorn, MarketWatch

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A dividend-stock screen

Peris was unable to discuss individual stocks, because he was actively changing the portfolios he manages to take advantage of the market turmoil.

But based on his recommendation of looking at rising yields in the consumer staples, communication services, health care, utilities and information-technology sectors, the following screen includes 25 S&P 500 stocks in those sectors, with yields of at least 3.00% as of the close on March 12, and with yields increasing the most since the benchmark index reached its most recent closing high Feb. 19.

The list was filtered to exclude any company that had cut its regular dividends (including “extra” dividends which some companies pay regularly, and which can vary), since the end of 2006.

The purpose of looking so far back was to eliminate any companies that had cut dividends during or after the financial crisis of 2008, as market stress began to appear in 2007. Some of the companies initiated dividends later than the end of 2006, but haven’t cut payouts.

Of course, having at least maintained dividends through these years doesn’t mean these companies won’t but cutting payouts in the wake of the unprecedented “double hit” that world markets are taking from the coronavirus and Saudi Arabia’s decision to increase oil production at a time of greatly reduced demand.

But it may provide some comfort as you look ahead.

Here’s the pared list, sorted by how much the yields increased between Feb. 19 and March 12:

Company Ticker Dividend yield - March 12 Dividend yield - Feb. 19 Increase in dividend yield Price decline - Feb. 19 through March 12 Price change - 2020 Price change - 2019
Coty Inc. Class A /zigman2/quotes/208645074/composite COTY 7.94% 3.73% 4.21% -45% -44% 71%
CenterPoint Energy Inc. /zigman2/quotes/206368471/composite CNP 7.80% 4.22% 3.58% -44% -45% -3%
Alliance Data Systems Corp. /zigman2/quotes/205162001/composite ADS 5.38% 2.25% 3.14% -54% -58% -25%
NetApp Inc. /zigman2/quotes/209297588/composite NTAP 5.35% 2.23% 3.12% -33% -42% 4%
Interpublic Group of Cos. Inc. /zigman2/quotes/203101491/composite IPG 6.68% 4.07% 2.61% -39% -34% 12%
Hewlett Packard Enterprise Co. /zigman2/quotes/201998588/composite HPE 5.26% 2.74% 2.52% -37% -42% 20%
Broadcom Inc. /zigman2/quotes/200646538/composite AVGO 5.94% 3.57% 2.37% -31% -31% 24%
Molson Coors Beverage Co. Class B /zigman2/quotes/205165133/composite TAP 5.94% 3.64% 2.30% -30% -29% -4%
Sysco Corp. /zigman2/quotes/205335941/composite SYY 4.14% 2.16% 1.97% -43% -49% 37%
Cisco Systems Inc. /zigman2/quotes/209509471/composite CSCO 4.34% 2.41% 1.93% -28% -31% 11%
AES Corp. /zigman2/quotes/209256253/composite AES 4.70% 2.78% 1.93% -42% -39% 38%
PPL Corp. /zigman2/quotes/207772352/composite PPL 6.23% 4.60% 1.63% -24% -26% 27%
Edison International /zigman2/quotes/206923834/composite EIX 4.86% 3.28% 1.58% -32% -30% 33%
Corning Inc /zigman2/quotes/200045496/composite GLW 4.30% 2.75% 1.55% -27% -30% -4%
Archer-Daniels-Midland Co. /zigman2/quotes/203479136/composite ADM 4.57% 3.02% 1.55% -28% -32% 13%
International Business Machines Corp. /zigman2/quotes/203856914/composite IBM 6.30% 4.80% 1.51% -32% -23% 18%
DTE Energy Co. /zigman2/quotes/205073403/composite DTE 4.44% 2.96% 1.48% -33% -31% 18%
Xerox Holdings Corp. /zigman2/quotes/201169674/composite XRX 4.18% 2.72% 1.46% -35% -35% 87%
Sempra Energy /zigman2/quotes/206074517/composite SRE 4.01% 2.55% 1.45% -35% -31% 40%
Tyson Foods Inc. Class A /zigman2/quotes/201117502/composite TSN 3.24% 1.81% 1.43% -33% -43% 70%
AT&T Inc. /zigman2/quotes/203165245/composite T 6.64% 5.25% 1.39% -18% -20% 37%
Omnicom Group Inc /zigman2/quotes/209996569/composite OMC 4.60% 3.21% 1.39% -28% -30% 11%
Western Union Co. /zigman2/quotes/206269665/composite WU 4.35% 2.99% 1.36% -21% -23% 57%
Maxim Integrated Products Inc. /zigman2/quotes/201861354/composite MXIM 4.29% 3.08% 1.21% -29% -27% 21%
Public Service Enterprise Group Inc /zigman2/quotes/201831904/composite PEG 4.40% 3.18% 1.21% -24% -24% 13%
Source: FactSet

You can click on the tickers for more about each company.

As always, if you see any stocks of interest listed here, you need to do your own research and consider how likely a company’s business strategy is to remain competitive over the next decade, at least. The history of maintaining dividend payouts doesn’t guarantee a smooth path forward. You also will need to be able to handle plenty of price volatility.

Don’t miss: These energy companies have the highest debt and the most at risk as the oil market collapses

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/zigman2/quotes/208645074/composite
US : U.S.: NYSE
$ 6.89
-0.37 -5.10%
Volume: 20.01M
Nov. 27, 2020 5:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$5.28 billion
Rev. per Employee
$258,335
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/zigman2/quotes/206368471/composite
US : U.S.: NYSE
$ 24.07
-0.44 -1.80%
Volume: 2.95M
Nov. 27, 2020 5:00p
P/E Ratio
N/A
Dividend Yield
2.49%
Market Cap
$13.11 billion
Rev. per Employee
$846,936
loading...
/zigman2/quotes/205162001/composite
US : U.S.: NYSE
$ 74.57
0.00 0.00%
Volume: 319,079
Nov. 27, 2020 5:00p
P/E Ratio
12.47
Dividend Yield
1.13%
Market Cap
$3.56 billion
Rev. per Employee
$656,624
loading...
/zigman2/quotes/209297588/composite
US : U.S.: Nasdaq
$ 53.26
-0.26 -0.49%
Volume: 739,117
Nov. 27, 2020 1:00p
P/E Ratio
15.35
Dividend Yield
3.60%
Market Cap
$11.82 billion
Rev. per Employee
$501,111
loading...
/zigman2/quotes/203101491/composite
US : U.S.: NYSE
$ 22.80
-0.31 -1.34%
Volume: 1.31M
Nov. 27, 2020 5:00p
P/E Ratio
15.82
Dividend Yield
4.47%
Market Cap
$8.89 billion
Rev. per Employee
$188,238
loading...
/zigman2/quotes/201998588/composite
US : U.S.: NYSE
$ 11.22
-0.02 -0.18%
Volume: 5.33M
Nov. 27, 2020 5:00p
P/E Ratio
N/A
Dividend Yield
4.28%
Market Cap
$14.43 billion
Rev. per Employee
$469,188
loading...
/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 394.95
+4.12 +1.05%
Volume: 684,633
Nov. 27, 2020 1:00p
P/E Ratio
74.07
Dividend Yield
3.29%
Market Cap
$159.76 billion
Rev. per Employee
$1.19M
loading...
/zigman2/quotes/205165133/composite
US : U.S.: NYSE
$ 46.80
+0.30 +0.65%
Volume: 2.21M
Nov. 27, 2020 5:00p
P/E Ratio
17.38
Dividend Yield
0.00%
Market Cap
$10.17 billion
Rev. per Employee
$597,706
loading...
/zigman2/quotes/205335941/composite
US : U.S.: NYSE
$ 71.24
-0.44 -0.61%
Volume: 865,313
Nov. 27, 2020 5:00p
P/E Ratio
N/A
Dividend Yield
2.53%
Market Cap
$36.29 billion
Rev. per Employee
$927,953
loading...
/zigman2/quotes/209509471/composite
US : U.S.: Nasdaq
$ 42.70
+0.20 +0.47%
Volume: 10.77M
Nov. 27, 2020 1:00p
P/E Ratio
17.34
Dividend Yield
3.37%
Market Cap
$180.43 billion
Rev. per Employee
$636,155
loading...
/zigman2/quotes/209256253/composite
US : U.S.: NYSE
$ 21.04
+0.06 +0.29%
Volume: 1.92M
Nov. 27, 2020 5:00p
P/E Ratio
N/A
Dividend Yield
2.72%
Market Cap
$13.99 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/207772352/composite
US : U.S.: NYSE
$ 29.11
-0.28 -0.95%
Volume: 2.65M
Nov. 27, 2020 5:00p
P/E Ratio
14.45
Dividend Yield
5.70%
Market Cap
$22.38 billion
Rev. per Employee
$632,655
loading...
/zigman2/quotes/206923834/composite
US : U.S.: NYSE
$ 62.79
-0.92 -1.44%
Volume: 968,285
Nov. 27, 2020 5:00p
P/E Ratio
63.90
Dividend Yield
4.06%
Market Cap
$23.77 billion
Rev. per Employee
$954,394
loading...
/zigman2/quotes/200045496/composite
US : U.S.: NYSE
$ 37.09
-0.21 -0.56%
Volume: 1.42M
Nov. 27, 2020 5:00p
P/E Ratio
179.79
Dividend Yield
2.37%
Market Cap
$28.34 billion
Rev. per Employee
$232,384
loading...
/zigman2/quotes/203479136/composite
US : U.S.: NYSE
$ 50.45
-0.05 -0.10%
Volume: 1.38M
Nov. 27, 2020 5:00p
P/E Ratio
17.87
Dividend Yield
2.85%
Market Cap
$28.07 billion
Rev. per Employee
$1.70M
loading...
/zigman2/quotes/203856914/composite
US : U.S.: NYSE
$ 124.35
+0.15 +0.12%
Volume: 2.09M
Nov. 27, 2020 5:00p
P/E Ratio
14.08
Dividend Yield
5.24%
Market Cap
$110.80 billion
Rev. per Employee
$201,008
loading...
/zigman2/quotes/205073403/composite
US : U.S.: NYSE
$ 128.53
-3.71 -2.81%
Volume: 526,913
Nov. 27, 2020 5:00p
P/E Ratio
18.20
Dividend Yield
3.38%
Market Cap
$24.88 billion
Rev. per Employee
$1.34M
loading...
/zigman2/quotes/201169674/composite
US : U.S.: NYSE
$ 23.22
-0.16 -0.68%
Volume: 723,542
Nov. 27, 2020 5:00p
P/E Ratio
17.19
Dividend Yield
4.31%
Market Cap
$4.61 billion
Rev. per Employee
$335,778
loading...
/zigman2/quotes/206074517/composite
US : U.S.: NYSE
$ 130.46
-1.50 -1.14%
Volume: 481,974
Nov. 27, 2020 5:00p
P/E Ratio
10.20
Dividend Yield
3.20%
Market Cap
$37.63 billion
Rev. per Employee
$773,856
loading...
/zigman2/quotes/201117502/composite
US : U.S.: NYSE
$ 65.00
+0.01 +0.02%
Volume: 1.33M
Nov. 27, 2020 5:00p
P/E Ratio
10.85
Dividend Yield
2.74%
Market Cap
$23.21 billion
Rev. per Employee
$310,683
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 29.03
+0.04 +0.14%
Volume: 15.65M
Nov. 27, 2020 5:00p
P/E Ratio
19.12
Dividend Yield
7.17%
Market Cap
$206.87 billion
Rev. per Employee
$736,850
loading...
/zigman2/quotes/209996569/composite
US : U.S.: NYSE
$ 63.00
-1.17 -1.82%
Volume: 1.53M
Nov. 27, 2020 5:00p
P/E Ratio
14.26
Dividend Yield
4.13%
Market Cap
$13.54 billion
Rev. per Employee
$213,624
loading...
/zigman2/quotes/206269665/composite
US : U.S.: NYSE
$ 22.52
-0.06 -0.27%
Volume: 1.87M
Nov. 27, 2020 5:00p
P/E Ratio
13.34
Dividend Yield
4.00%
Market Cap
$9.26 billion
Rev. per Employee
$458,904
loading...
/zigman2/quotes/201861354/composite
US : U.S.: Nasdaq
$ 82.41
+1.03 +1.27%
Volume: 967,727
Nov. 27, 2020 1:00p
P/E Ratio
32.60
Dividend Yield
0.00%
Market Cap
$22.03 billion
Rev. per Employee
$307,996
loading...
/zigman2/quotes/201831904/composite
US : U.S.: NYSE
$ 59.35
-0.62 -1.03%
Volume: 898,686
Nov. 27, 2020 5:00p
P/E Ratio
15.75
Dividend Yield
3.30%
Market Cap
$30.02 billion
Rev. per Employee
$1.33M
loading...

Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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