![]() So while a high yield is appealing, other factors must be considered when deciding whether a particular company is a good stock to invest in.The S&P 500 delivered impressive returns in the first half of 2023. It’s also important to remember that even if a company has an exceedingly high dividend yield, it may be a sign that the company’s fundamentals are in trouble and that the high yield is to lure investors to the table. Most analysts say leading energy companies can generate lots of free cash flow in the year ahead. The energy sector offers some of the highest average dividend yields within the S&P 500, so more than half of our recommendations hail from the energy sector. In an unpredictable macroeconomic environment, dividends are one of a handful of factors long-term investors should be using to determine which stocks to buy. The list above contains stocks that have both sizable dividend yields and attractive underlying businesses. For example, after several years of struggles, semiconductor giant Intel (INTC) recently cut its dividend by 66%, dropping its yield from 5.7% to just 1.6%. In addition, companies routinely cut their dividend payouts in response to poor financial performance. A stock may pay a 4% dividend yield and drop in value by 40% in a year, generating a very negative total return. Just because a stock pays a high dividend yield doesn’t mean it is a good investment. The S&P 500’s overall dividend yield is currently about 1.7%, so all of the stocks included have yields that are significantly higher than the S&P 500 average. The S&P 500’s median forward P/E ratio is currently 18.3, according to Yardeni Research. Stocks with low forward earnings multiples are considered attractively valued based on analysts’ projected future earnings.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |