Record-high inflation rates have been pressurizing markets since the beginning of 2022. The CPI leaped 8.3% in April, 20 basis points more than the 8.1% estimate. However, it marked a marginal slowdown from March’s historic 8.5% year-over-year rise and seven-month-long uptrend. Nonetheless, markets are expected to remain volatile due to the Fed’s hawkish tilt.
High-yielding dividend stocks are expected to help investors dodge the near-term market fluctuations. Their ability to pay steep dividends denotes their financial strength. And investors’ interest in the high-yielding dividend stocks is evident in the iShares Core High Dividend ETF’s (HDV) 7.1% returns over the past six months.
Therefore, we think investors looking to beat inflation could bet on fundamentally strong and high-yielding dividend stocks Lumen Technologies, Inc. (LUMN), MPLX L.P. (MPLX), and Black Stone Minerals, L.P. (BSM) now.
Lumen Technologies, Inc. (LUMN)
LUMN in Monroe, La., is a facilities-based technology and communications company. It provides various integrated products and services under the Lumen, Quantum Fiber, and CenturyLink brands to business and residential customers in the United States and internationally. The company operates in two segments–Business and Mass Markets.
On May 4, 2022, Jeff Storey, LUMN’s President, and CEO, said, “We are excited by significant recent Enterprise wins, and our Quantum Fiber build is accelerating, both of which provide us confidence as we execute on our plans to drive toward revenue growth.”
LUMN has been paying dividends for 22 consecutive years. Its current dividend translates to an 8.77% yield, while its four-year average yield is 10.18%. On May 19, 2022, LUMN declared a $0.25/share dividend.
LUMN’s operating income came in at $1.08 billion for the first quarter, ended March 31, 2022, up 9.7% year-over-year. Its net income was $599 million, up 26.1% year-over-year, while its EPS came in at $0.59, up 34.1% year-over-year.
LUMN surpassed EPS estimates in three of the trailing four quarters. Over the past three months, the stock has gained 14.3% in price to close yesterday’s trading session at $11.36.
LUMN’s strong fundamentals are reflected in its POWR Ratings. It has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
LUMN has an A grade for Value and a B grade for Quality. Within the Telecom - Domestic industry, it is ranked #3 of 21 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for LUMN.
MPLX L.P. (MPLX)
MPLX in Findlay, Ohio, owns and operates midstream energy infrastructure and logistics assets primarily in the United States. It operates in two segments–Logistics and Storage; and Gathering and Processing. It is a subsidiary of Marathon Petroleum Corporation.
On May 3, 2022, Michael J. Hennigan, MPLX’s Chairman, President, and CEO, said, “We are advancing several organic growth projects focused on expansions and de-bottlenecking. These actions will continue to support the growth of MPLX, allowing our business to generate free cash flow and return capital to unitholders.”
MPLX has been paying dividends for nine consecutive years. MPLX’s dividend payouts have grown at a 6.1% CAGR over the past five years. Its current dividend translates to a 9.14% yield, while its four-year average yield is 10.76%. On April 26, 2022, MPLX declared a quarterly cash distribution of $0.71 per common unit for the first quarter of 2022.
MPLX’s total revenues and other income increased 11.6% year-over-year to $2.61 billion for the first quarter, ended March 31, 2022. Its net income came in at $825 million, up 11.6% year-over-year. Furthermore, its EPS came in at $0.78, up 14.7% year-over-year.
For its fiscal year 2022, analysts expect MPLX’s revenue to be $10.34 billion, representing a 3.1% year-over-year rise. The company’s EPS is expected to increase 12.2% to $0.83 for the quarter ending Sept. 30, 2022. It surpassed EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 11.5% in price to close yesterday’s trading session at $29.92.
MPLX’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system.
Also, the stock has an A grade for Momentum and a B grade for Stability and Quality. Within the A-rated MLPs - Oil & Gas industry, it is ranked #9 of 33 stocks. Click here to see the additional POWR Ratings for Growth, Value, and Sentiment for MPLX.
Black Stone Minerals, L.P. (BSM)
BSM and its subsidiaries own and manage oil and natural gas mineral interests. It has total estimated proved oil and natural gas reserves of 59,824 barrels of oil equivalent and owns mineral interests in approximately 16.8 million gross acres. BSM is headquartered in Houston, Tex.
On May 2, 2022, Thomas L. Carter, Jr., BSM’s CEO and Chairman, said, “We remain very encouraged by the level of activity across our acreage in this strong commodity price environment, and by the initial drilling results on our concentrated mineral positions in the Haynesville and Austin Chalk plays. This optimism is reflected in the significant distribution increase we announced last week.”
BSM has been paying dividends for six consecutive years. Its current dividend translates to a 10.59% yield, while its four-year average yield is 10.03%. On April 25, 2022, BSM announced a cash distribution for common units attributable to the first quarter of 2022 of $0.40 per unit.
BSM’s oil and condensate sales came in at $75.83 million for the first quarter, ended March 31, 2022, up 71.7% year-over-year. Its revenue from contracts with customers came in at $156.44 million, up 74.9% year-over-year. In addition, its adjusted EBITDA came in at $98.76 million, up 64.6% year-over-year.
For 2023, analysts expect BSM’s revenue to increase 8.7% year-over-year to $595.90 million. Its EPS increased 540% to $0.32 for the quarter ending Sept. 30, 2022. Over the past year, the stock has gained 51.2% in price to close yesterday’s session at $14.91.
BSM has an overall B rating, which indicates a Buy in our proprietary rating system. It has a B grade for Growth, Momentum, and Quality. Within the MLPs - Oil & Gas industry, it is ranked #15 of 33 stocks. Click here to see the additional POWR Ratings for Value, Stability, and Sentiment for BSM.
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LUMN shares were trading at $11.15 per share on Friday morning, down $0.21 (-1.85%). Year-to-date, LUMN has declined -9.00%, versus a -18.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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