The increasing odds of recession with anticipated aggressive interest rate hikes as inflation hit 9.1% in June 2022 have led to a broad-based market sell-off this week. On the positive side, the unemployment rate remained at 3.6% for the fourth straight month in June. So, many analysts expect inflation to moderate this month.
However, since the market volatility is not expected to lessen anytime soon, large-cap dividend-paying stocks could be wise investments now as they offer resilience and a steady income stream.
West Pharmaceutical Services, Inc. (WST), S&P Global Inc. (SPGI), and The Sherwin-Williams Company (SHW) have a long history of paying dividends at an increasing rate. Since these high-dividend stocks are now trading at attractive prices, it could be wise to add them to your watchlist.
West Pharmaceutical Services, Inc. (WST)
With a $22.22 billion market capitalization, WST designs and produces containment and delivery systems for injectable drugs and healthcare products and serves pharmaceutical, diagnostic, and medical device companies worldwide.
It operates through Proprietary Products; and Contract-Manufactured Products segments. It distributes its products through its sales force and distribution network, contract sales agents, and regional distributors.
WST will pay a $0.18 per share quarterly cash dividend on August 3, 2022. The stock pays a $0.72 per share dividend annually, translating to a 0.24% yield. Its dividend has grown at a 6.84% rate over the past five years. WST has delivered 29 consecutive years of dividend growth.
At the BIO International Convention held from June 13-16, 2022, WST, in partnership with Japan-based high-quality pharmaceutical delivery system components manufacturer Daikyo Seiko, unveiled their new Daikyo Crystal Zenith 2.25mL Insert Needle Syringe System.
This technologically advanced cyclic olefin polymer containment and delivery system is an expansion upon its 1mL Insert Needle Syringe System offering and should address the needs of patients with a safe and reliable containment solution.
For its fiscal 2022 first quarter ended March 31, 2022, WST’s net sales increased 7.4% year-over-year to $720 million. The company’s gross profit came in at $284.60 million, representing a 4.7% rise from its year-ago period. Its adjusted operating profit came in at $189.90 million for the quarter, indicating a 6% year-over-year improvement.
WST’s adjusted net income came in at $175 million, up 12.5% from the prior-year period. Its adjusted EPS increased 12.2% year-over-year to $2.30. It had $667.70 million in cash and cash equivalents as of March 31, 2022.
Analysts expect WST’s EPS to be $9.34 for fiscal 2022 ending December 31, 2022, representing an 8.9% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters, which is impressive.
The consensus revenue estimate of $3.06 billion for the same fiscal year indicates an 8.1% year-over-year improvement. Its EPS is expected to grow at 10.4% per annum over the next five years.
The stock has lost 36% year-to-date to close the last trading session at $300, down 36.9% from its 52-week high of $475.35.
S&P Global Inc. (SPGI)
With a $116.25 billion market cap, SPGI and its subsidiaries provide credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets.
The company operates through S&P Global Market Intelligence; S&P Global Ratings; S&P Global Commodity Insights; S&P Global Mobility; S&P Dow Jones Indices; and S&P Global Engineering Solutions segments.
SPGI will pay a $0.85 per share quarterly cash dividend on September 12, 2022. The stock pays a $3.40 per share dividend annually, translating into a 0.98% yield. Its dividend has grown at a 15.46% rate over the past five years. SPGI has delivered 17 consecutive years of dividend growth.
On June 30, 2022, SPGI’s S&P Global Commodity Insights, a provider of information and benchmark prices for the commodities and energy markets, and Pexapark, a Swiss software and advisory service provider for post-subsidy renewable energy sales and risk management, announced to jointly create renewable energy price indices to help create more transparency in renewable energy markets.
The collaboration will combine S&P Global Commodity Insights' Platts benchmark expertise with Pexapark's trusted reference pricing of renewable PPAs across European markets. As the renewable energy market is gaining interest worldwide, forming a benchmark pricing will help track its growth.
For its fiscal 2022 first quarter ended March 31, 2022, SPGI’s adjusted pro forma revenue grew 1.7% year-over-year to $3.07 billion. The company’s adjusted EPS came in at $2.89, up 29.4% from the prior-year period. As of March 31, 2022, the company had $4.41 billion in cash and cash equivalents.
Analysts expect SPGI’s revenue to be $12.21 billion for fiscal 2022 ending December 31, 2022, indicating a 47.2% year-over-year improvement. It surpassed Street EPS estimates in three of the trailing four quarters. The company’s EPS is expected to grow at an 11.8% rate per annum over the next five years.
The stock has lost 27.5% year-to-date. It closed the last trading session at $342.02, 29.4% lower than its 52-week high of $484.21.
The Sherwin-Williams Company (SHW)
With a market cap of $63.92 billion, SHW develops, manufactures, distributes, and sells paint, coatings, and related products. The company serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches, direct sales staff, and outside sales representatives.
SHW paid a $0.60 per share quarterly cash dividend on June 3, 2022. The stock pays a $2.40 per share dividend annually, translating to a 0.97% yield. The company’s dividend has grown at a 15.34% rate over the past five years. SHW has delivered 24 consecutive years of dividend growth.
On June 9, 2022, SHW announced the acquisition of Gross & Perthun GmbH & Co. KG, a German manufacturer and distributor of coatings for heavy equipment and transportation industries, by the end of 2022 third quarter, and add it to the Sherwin-Williams Performance Coatings Group segment.
This will bring Gross & Perthun’s innovative waterborne and solvent liquid coatings technology to SHW’s product portfolio and accelerate profitable growth throughout Europe and beyond.
For its fiscal 2022 first quarter ended March 31, 2022, SHW’s net sales increased 7.4% year-over-year to $5 billion. The company had cash and equivalents of $401.10 million as of March 31, 2022.
The consensus EPS estimate of $9.42 for fiscal 2022 ending December 31, 2022, indicates a 15.6% year-over-year improvement. Analysts expect SHW’s revenue to be $21.88 billion for the same fiscal year, representing a 9.7% rise from the prior-year period. Its EPS is expected to grow at 14.7% per annum over the next five years.
The stock has declined 30.2% year-to-date to close the last trading session at $245.72, 30.6% lower than its 52-week high of $354.15.
WST shares were unchanged in after-hours trading Thursday. Year-to-date, WST has declined -37.18%, versus a -19.84% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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