2 Companies Offer Sharply Higher Yields than the Sector Average
By: Ned Piplovic,
Two companies continued their streaks of raising dividends for at least seven years and still offer 4%-plus dividend yields, which are significantly higher than the average yields for their respective sectors.
In addition to the extraordinary dividend income, both stocks have rewarded their shareholders with double-digit percentage share price increases over the last year. One of the companies has an ex-dividend date on March 29, 2017, and the other is in early May.
B&G Foods, Inc. (NYSE:BGS)
B&G Foods manufactures, sells, and distributes a portfolio of shelf-stable, frozen food and household products in the United States, Canada and Puerto Rico. Its products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, maple syrup, salad dressings, pizza crusts, pickles and other specialty products. The company distributes its products under a variety of brand names, which include B&G, B&M, Cream of Wheat, Emeril’s, Green Giant, MacDonald’s, Mrs. Dash, Ortega, Polaner, Victoria and many others. BGS also sells and distributes household products under the Static Guard brand. B&G headquarters are in Parsippany, New Jersey, where the company was founded in 1996.
The current quarterly dividend of $0.465 converts to a $1.86 annual payment and a 4.6% yield, which is 12.4% higher than the 4.1% trailing five-year average yield. Additionally, the current dividend yield is 85% higher than the food sector average and 149% above the average dividend yield for the overall consumer goods sector.
B&G Foods has boosted its dividend for the last seven consecutive years and eight times since it started paying a dividend in 2007. Over that time, the company increased its annual payout at an average 15.5% annual growth rate and tripled its yearly distribution amount in just a decade.
In addition to the increasing dividend income payout, the company’s share price rose 19% in the last 12 months and almost 80% over the last five years.
Helmerich & Payne, Inc. (NYSE:HP)
Helmerich & Payne, Inc. provides drilling rigs, equipment and personnel for contract drilling of oil and gas wells. The company operates through three segments: U.S. Land, Offshore and International Land.
The U.S. Land segment drills primarily in oil producing states in the continental United States — Oklahoma, California, Texas, North Dakota, etc. The Offshore segment has drilling operations in the Gulf of Mexico and Equatorial Guinea, while the International Land segment operates in Ecuador, Colombia, Argentina, Bahrain and the United Arab Emirates. The company operates around 350 land rigs in the United States, more than 35 international land rigs and 9 offshore platform rigs.
Helmerich & Payne also owns, develops, and operates commercial real estate properties, which include a shopping center of more than 440,000 square feet, a multi-tenant industrial warehouse of approximately one million square feet and approximately 210 acres of undeveloped real estate located in Tulsa, Oklahoma. Helmerich & Payne, Inc., founded in 1920, is headquartered in Tulsa, Oklahoma.
The current annual dividend of $2.80 yields 4.2%, which is 41.6% higher than the company’s 3% average yield over the last five years. Additionally, the current yield exceeds the basic materials sector average yield of 2.33% by 80%.
Since the beginning of the current consecutive dividend boost streak, the annual payout grew at an average annual rate of 18.1%. The company also enlarged its dividend 20-fold since 2000.
After a run-up of 47% between March and mid-December 2016, the share price lost almost three-quarters of those gains. However, the share price closed on March 23, 2017, at $65.91, which is still 12.7% higher than the price from March 2016. Over the last five years, the share price appreciated almost 42%.
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