The stock market has been reeling under immense volatility due to concerns over surging inflation, the Federal Reserve’s policy tightening, deepening supply chain disruptions, and a resurgence of COVID-19 cases. Moreover, the U.S. economy witnessed a slowdown in the first quarter.
As these factors are not expected to ease anytime soon, investors could consider betting on safe dividend-paying stocks to generate a steady income stream. Investors’ interest in dividend stocks is evident from the SPDR S&P Dividend ETF’s (SDY) 2% returns over the past three months versus SPDR S&P 500 Trust ETF’s (SPY) 6.6% loss.
Given their history of consistent dividend payments, dividend-paying stocks Waste Management, Inc. (WM), General Dynamics Corporation (GD), Glencore plc (GLNCY), and Anthem, Inc. (ANTM) could be solid bets now. Each of these stocks has outperformed the benchmark S&P 500 index over the past three months.
Waste Management, Inc. (WM)
WM provides waste management environmental services to residential, commercial, industrial, and municipal customers in North America. The company offers collection, transfer, and disposal services of waste and recyclable materials, recycling brokerage services, owns, develops, operates landfill gas-to-energy facilities, and operates transfer stations.
WM will pay a $0.65 quarterly cash dividend on June 17, 2022. The stock pays a $2.60 per share dividend annually, translating to a 1.65% yield. The company’s dividend has grown at a 7.49% rate over the past five years. WM has increased its dividends for 19 consecutive years.
On January 13, 2022, WM’s WM Organic Growth subsidiary and Tailwater Capital LLC, a private equity firm focused on midstream and upstream oil and gas companies, announced a joint venture that enables Continuus Materials, a leading waste diversion and circular economy solutions provider, to develop additional facilities at WM sites and launch its first full-scale production plant that upcycles plastic and fiber materials from municipal solid waste into Everboard, a proprietary, high-performance, low-slope roof cover board. Continuus Materials' process reduces landfill waste and generates significantly lower life-cycle greenhouse gas emissions than competing products made from traditional materials. This will enable the companies to use impactful, sustainable solutions to reduce waste.
WM’s revenue for its fiscal 2022 first quarter ended March 31, 2022, increased 13.4% year-over-year to $4.66 billion. The company’s adjusted income from operations came in at $803 million, representing a 16.5% year-over-year improvement. Its adjusted net income came in at $540 million for the quarter, indicating a 20% rise from the prior-year period. WM’s adjusted EPS increased 21.7% year-over-year to $1.29. The company had $155 million in cash and cash equivalents as of March 31, 2022.
The consensus EPS estimate of $5.60 for fiscal 2022 ending December 31, 2022, represents a 15.7% year-over-year improvement. Analysts expect its revenue to grow 8.1% year-over-year to $19.39 billion for the same fiscal year. The company’s EPS is expected to grow at an 11.7% rate per annum over the next five years. The stock has gained 9.9% over the past three months and closed yesterday’s trading session at $157.23.
WM’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has a B grade for Quality, Growth, Stability, and Sentiment. Click here to see the additional ratings for WM’s Value and Momentum. WM is ranked #1 of 15 stocks in the B-rated Waste Disposal industry.
General Dynamics Corporation (GD)
GD is a diversified aerospace and defense company that offers a broad portfolio of products and services in business aviation, combat vehicles, weapons systems, munitions, shipbuilding design and construction, information systems, and technologies. The company operates through four segments ─ Aerospace; Marine Systems; Combat Systems; and Technologies.
GD paid a $1.26 quarterly cash dividend on May 6, 2022. The stock pays a $5.04 per share dividend annually, translating to a 2.18% yield. The company’s dividend has grown at a 9.13% rate over the past five years. GD has increased its dividends for 25 consecutive years.
On May 17, 2022, National Security Agency (NSA) awarded a contract to GD’s General Dynamics Mission Systems business unit to design, test, and deliver a certifiable 400 Gbps high-assurance encryption solution that is compliant with the Ethernet Data Encryption Cryptographic Interoperability Specification (EDE-CIS). GD’s modular TACLANE E-Series Adaptable Security Platform (ASP) and the TACLANE-ES400 Cryptographic Module satisfy customers’ need for high-performance processing and speed with uncompromised data security and efficient power consumption. This should nurture GD’s relationship with NSA in the long run.
GD revenue for its fiscal 2022 first quarter ended April 3, 2022, increased marginally year-over-year to $9.39 billion. The company’s pre-tax income came in at $849 million, representing a marginal improvement from the year-ago period. While its net earnings increased 3.1% year-over-year to $730 million, its EPS increased 5.2% to $2.61. The company had $2.91 billion in cash and equivalents as of April 3, 2022.
Analysts expect the company’s EPS to reach $12.15 for fiscal 2022 ending December 31, 2022, representing a 5.2% 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 $39.46 billion for the same fiscal year represents a 2.6% year-over-year improvement. GD’s EPS is expected to grow at an 11.8% rate per annum over the next five years. Over the past three months, the stock has gained 8% and closed yesterday’s trading session at $231.46.
GD’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has a B grade for Quality, Sentiment, and Stability. Click here to see the additional ratings for GD (Momentum, Value, and Growth). GD is ranked #3 of 76 stocks in the Air/Defense Services industry.
Glencore plc (GLNCY)
Based in Switzerland, GLNCY produces, processes, stores, transports, and markets metals and minerals and energy products internationally. The company also engages in the oil exploration/production, distribution, storage, and bunkering activities and offers coal, crude oil and oil products, refined products, and natural gas. It markets and distributes physical commodities sourced from third-party producers and its production to industrial consumers in the battery, electronic, construction, automotive, steel, energy, and oil industries.
GLNCY will pay a $0.13 half-year cash dividend on May 20, 2022. The stock pays a $0.26 per share dividend annually, translating to a 4.22% yield.
On April 12, 2022, GLNCY and prominent automotive manufacturer General Motors Company (GM) announced a multi-year sourcing agreement to supply cobalt from GLNCY’s Murrin Murrin operation in Australia to be used in GM’s Ultium battery cathodes to power its Chevrolet Silverado EV, GMC HUMMER EV, and Cadillac LYRIQ electric vehicles. This will nurture GLNCY’s relationship with GM in the long run.
GLNCY’s revenue for its fiscal 2021 full year ended December 31, 2021, increased 43.2% year-over-year to $203.75 billion. The company’s pre-tax income came in at $7.38 billion, versus a $5.12 billion loss in the year-ago period. Its net income came in at $4.35 billion for the quarter, compared to a $3.95 billion net loss in the prior-year period. GLNCY’s EPS came in at $0.37, versus a $0.14 loss per share in the year-ago period. The company had $3.24 billion in cash and cash equivalents as of December 31, 2021.
The consensus revenue estimate of $280.21 billion for fiscal 2022 ending December 31, 2022, represents a 37.5% rise from the prior-year period. Over the past three months, the stock has gained 8.3% to close yesterday’s trading session at $12.32.
GLNCY’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
It has an A grade for Growth and Momentum and a B grade for Stability and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for GLNCY’s Sentiment and Value here. GLNCY is ranked #5 of 46 stocks in the Miners - Diversified industry.
Anthem, Inc. (ANTM)
ANTM is a health benefits company that offers a broad spectrum of network-based managed care plans and services to large and small groups, individuals, Medicaid, and Medicare markets. The company provides an array of specialty and other insurance products and services, such as pharmacy and radiology benefits management, dental, vision, life and disability insurance benefits, and analytics-driven personal health care.
ANTM will pay a $1.28 quarterly cash dividend on June 24, 2022. The stock pays a $5.12 per share dividend annually, translating to a 1.03% yield. The company’s dividend has grown at a 12.43% rate over the past five years. ANTM has increased its dividends for 10 consecutive years.
On May 5, 2022, ANTM acquired Integra Managed Care, an HMO Plan with a Medicare Advantage contract and a contract with the New York State Medicaid program. This will help ANTM deliver high-quality, comprehensive whole-health care across communities throughout New York.
For its fiscal 2022 first quarter ended March 31, 2022, ANTM’s total revenues increased 17.6% year-over-year to $38.10 billion. The company’s pre-tax income came in at $2.33 billion, representing a 6.9% year-over-year improvement. Its adjusted net income came in at $2.02 billion, indicating a 16% rise from the year-ago period. ANTM’s adjusted EPS increased 17.7% year-over-year to $8.25. As of March 31, 2022, the company had $6.16 billion in cash and cash equivalents.
Analysts expect ANTM’s EPS to improve 10.2% year-over-year to $28.62 for fiscal 2022, ending December 31, 2022. It surpassed Street EPS estimates in each of the trailing four quarters. The consensus revenue of $153.60 billion for the same fiscal year represents a 12.2% rise from the prior-year period. ANTM’s EPS is expected to grow at a 12.6% rate per annum over the next five years. Over the past three months, the stock has gained 10.2% to close yesterday’s trading session at $497.26.
ANTM’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to Strong Buy in our proprietary rating system.
The stock has a B grade for Sentiment, Growth, Value, Stability, and Quality. Click here to see the additional ratings for ANTM’s Momentum. The stock is ranked #1 of 11 stocks in the A-rated Medical - Health Insurance industry.
WM shares were trading at $152.77 per share on Wednesday afternoon, down $4.46 (-2.84%). Year-to-date, WM has declined -8.08%, versus a -17.44% 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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