With global debt rising, it's no surprise that fears of another crisis may mount. Last September, experts discussed how we had skirted the worldwide debt issue due to low-interest rates for the previous 20 years. However, the era of high-interest rates, elevated inflation, and previous banking catastrophes have put people on the edge of their seats, wary and waiting for the next financial crisis.
While scary, if these fears materialize, investors can quickly reposition their portfolios depending on their needs. Often, dividend companies are pushed into the spotlight when stock prices tank. Their predictable income generation and potential recovery give investors the best of both worlds. The great thing now is that there are elite stocks with a reputation for continuously increasing their dividends to keep shareholders happy and investors a cushion on market shocks because of their predictable and reliable dividend income.
Now, let’s look at three dividend stocks worth considering right now.
Mplx LP (MPLX)
Mplx LP, a Marathon Petroleum Corp subsidiary, is a master limited partnership that operates logistics assets, midstream energy infrastructures, and fuel distribution services. MPLX’s operations are focused on two key segments: Logistics and Storage, which is responsible for crude oil, hydrocarbon-based products, and refined products distribution, transportation, and storage; its Gathering and Processing segment focuses on natural gas liquid gathering, processing, fractionation, and transportation.
The company has been performing well these past few quarters, with its latest earnings beating analyst estimates by 5.81% and operating cash flow growing by 117.11% QoQ. MPLX also recently announced its seventh processing plant expansion. The company will take advantage of rising oil prices with its increased capacity. On top of that, it currently offers an 8.54% dividend yield with a 5-year growth rate of 30.77%. MPLX has consecutively increased its dividend payment for nine consecutive years.
Analyst Ratings
Analysts rate MPLX as a “Moderate Buy” based on 6 Strong Buys, 1 Moderate Buy, 3 Holds, and 1 Strong Sell recommendation from analysts. The mean target price is $39.50, and the high target price is $44.00, an upside of 21.18%.
United Parcel Service, Inc. (UPS)
United Parcel Service, Inc. is one the most famous package delivery companies in the U.S. and operates as a global supply chain management solutions provider. Its single pickup and delivery network gives it a unique, efficient, and robust delivery model that separates it from its competition. UPS has been one of the most recognized names in the industry and is a partner for major companies like eBay, Apple, Best Buy, etc., for their shipping needs. This is a testament to the company’s reliability and efficient service. Even during the pandemic, the company has helped many companies transition into a delivery-focused business, pushing them to greater heights. This goes to show the effectiveness of the company’s business expertise.
The company’s financials have been affected by its labor agreement with the International Brotherhood of Teamsters, resulting in an adjustment to its FY 2023 guidance on consolidated revenue and operating margins. Despite that, UPS grew its net income by 9.82% QoQ and beat analyst EPS estimates by 1.20%. The ratification of the labor agreement may have signaled the bottom for UPS. The company currently offers a dividend yield of 4.06% and a 5-year dividend growth of 83.13%. Not only that, they have increased the dividend for each of the last 14 years.
Analyst Ratings
Analysts rate UPS as a “Moderate Buy” based on 9 Strong Buys, 12 Holds, and 2 Strong Sell recommendations from analysts. The mean target price is $180.60, and the high target price is $205.00, an upside of 30.42%.
Magna International Inc.(MGA)
Magna International Inc. is a global automotive supplier based in Canada that offers engineering, manufacturing, and product capability expertise. It operates in two primary segments: Veoneer Active Safety for its software, sensors, and systems engineering solutions; power and vision for its power train subsystem; and electrified power train technology.
Magna International had previously acquired Veoneer Active Safety from SSW Parts as part of its plan to strengthen its active safety business. MGA is one of the world's most extensive and diversified auto parts suppliers. This goes to show how strong its brand and business model is.
The company has been performing well since the start of the year, with its latest earnings beating analyst estimates by 20% and its quarterly net income os up 62.20% QoQ. This continued financial performance has prompted MGA to raise FY 2023 outlooks for EBITDA margin, total sales, and net income. The company currently offers a 3.43% dividend yield with a 63.64% dividend growth. MGA has continuously increased its dividend for 14 consecutive years, making it a favorite among income investors.
Analyst Ratings
Analysts rate MGA as a “Moderate Buy” based on a consensus of 8 Strong Buys, 1 Moderate Buy, and 8 Hold recommendations from analysts. The mean target is $65.80, and the high target price is $80, an upside of 49.93%.
Final Thoughts
Companies with strong balance sheets and proven business models are the best choices in an all-weather, long-term portfolio. A continuously increasing dividend income helps provide investors with the additional portfolio qualities needed to fight economic downturns and a cushion for downside risk and losses. That’s why high-quality dividend companies are crowd favorites of long-term investors who want to capture capital growth and income in their investments.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
