The Fed’s aggressive monetary policy crushed the stock market last year. Moreover, given the still-high inflation, the Fed is expected to continue its rate hikes in 2023, which might keep the stock market under pressure.
However, investors in or near retirement might consider investing in quality dividend-paying stocks BHP Group Limited (BHP), Telekom Austria AG (TKAGY), Global Partners LP (GLP), and MV Oil Trust (MVO). These stocks pay reliable dividends and could help ensure a steady income stream regardless of the market condition.
Federal Reserve officials at their most recent meeting indicated that there are signs inflation is coming down, but not enough to counter the need for more interest rate increases.
According to a research paper recently released during a monetary policy forum presented by the University of Chicago Booth School of Business, the Federal Reserve is unlikely to bring down inflation without raising interest rates considerably higher, causing a recession.
Let us look at the detailed discussion for the stocks mentioned above:
BHP Group Limited (BHP)
Headquartered in Melbourne, Australia, BHP operates as a resources company worldwide. The company operates through Copper; Iron Ore; and Coal segments.
On December 12, 2022, I-Pulse Inc. (I-Pulse) and I-ROX SAS (I-ROX) announced a comprehensive collaboration arrangement with BHP to identify and develop applications of pulsed-power technology across multiple aspects of the mining industry.
BHP pays an annual dividend of $7.00 per share, translating to an 11.58% yield on the current price. Its dividend payments have grown at CAGRs of 37.6% and 33.1% over the past three and five years, respectively. The company has a four-year average dividend yield of 7.9%. Also, it has paid dividends for 13 consecutive years.
During the fiscal year that ended June 30, 2022, BHP’s revenue increased 14.4% year-over-year to $65.10 billion. Underlying EBITDA from continuing operations grew 15.9% year-over-year to $40.63 billion, while underlying basic earnings per ordinary share from continuing operations increased 25.4% year-over-year to 421.2 cents.
BHP’s revenue is expected to be $55.09 billion for the current fiscal year ending June 2023. The company’s EPS for the same fiscal year is expected to be $4.01.
Shares of BHP have gained 6.7% over the past year to close the last trading session at $60.43.
BHP’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Quality and a B for Stability. Within the Industrial - Metals industry, it is ranked #5 out of 37 stocks.
Beyond what is stated above, we’ve also rated BHP for Growth, Value, Momentum, and Sentiment. Get all BHP ratings here.
Telekom Austria AG (TKAGY)
Headquartered in Vienna, Austria, TKAGY provides fixed-line and mobile communications solutions to individuals, commercial and non-commercial organizations, and other national and international carriers.
While its four-year average dividend yield is 3.50%, and its current dividend of $0.57 translates to a 3.79% yield annually. Over the past three and five years, TKAGY’s dividend payouts have grown at 6.6% and 38.1% CAGR respectively.
During the fourth quarter that ended December 31, 2022, TKAGY’s total revenue increased 7.7% year-over-year to €1.34 billion ($1.41 billion). The company’s operating income increased 16.4% year-over-year to €185 million (195.08 million), while earnings per share attributable to equity holders of the parent rose 233.3% year-over-year to €0.20.
Street expects TKAGY’s revenue for the fiscal year 2023 to increase marginally year-over-year to $5.40 billion. Additionally, TKAGY has topped the consensus revenue estimates in each of the trailing four quarters, which is impressive.
The stock has gained 25,2% over the past three months, closing the last trading session at $15.03.
It is no surprise that TKAGY has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system.
It has a grade of A for Stability and Quality and a B for Value. TKAGY is ranked #2 out of 46 in the A-rated Telecom - Foreign industry.
In addition to the POWR ratings above, we have also rated TKAGY for Momentum, Growth, and Sentiment. Get all the TKAGY ratings here.
Global Partners LP (GLP)
GLP engages in the purchasing, selling, gathering, blending, storing, and logistics of transporting gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers in the New England states Mid-Atlantic region and New York.
GLP pays $2.54 annually as dividends. This translates to a yield of 7.35% at the current market price, compared to the 4-year average dividend yield of 11.05%. Its dividend payments have grown at a CAGR of 5.9% over the past three years. Also, it has paid dividends for 16 years consecutively.
GLP’s sales increased 39.2% year-over-year to $4.63 billion in the third quarter, which ended September 30, 2022. Its gross profit grew 61.7% from the year-ago value to $328.38 million, while its operating income rose 163.2% year-over-year to $141.29 million.
The company’s adjusted EBITDA increased 112.8% year-over-year to $168.51 million, while net income per common limited partner unit rose 262.8% year-over-year to $3.12.
Analysts expect GLP’s revenue for the fiscal fourth quarter ended December 2022 to increase 10.2% year-over-year to $4.51 billion. The company’s EPS is expected to increase 218.2% year-over-year to $1.40 for the same quarter. Additionally, it has topped consensus revenue and EPS estimates in each of the trailing four quarters.
The stock has gained 41.7% over the past year to close the last trading session at $34.56.
GLP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
GLP also has an A grade for Value and Momentum and a B for Sentiment and Growth. It is ranked first among 31 stocks in the A-rated MLPs - Oil & Gas industry.
To access additional ratings for GLP’s Stability and Quality, click here.
MV Oil Trust (MVO)
MVO acquires and holds net profits interests in the oil and natural gas properties of MV Partners, LLC.
MVO pays a $1.64 dividend annually, which translates to a yield of 12.09% at the current price, higher than the 4-year average dividend yield of 15.28%. Its dividend payouts have grown at 33.9% and 22.1% CAGRs over the past three and five years, respectively.
MVO’s distributable income increased 133.3% year-over-year to $8.05 million during the quarter that ended September 30, 2022. Its income from net profit interest rose 136% from the prior-year quarter. Distributions per trust unit rose 133.3% year-over-year to $0.7.
MVO has topped the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 32.3% over the past year to close the last trading session at $13.56.
MVO’s robust prospect is reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
MVO has a B grade for Growth, Momentum, and Quality. It is ranked #22 out of 90 stocks in the B-rated Energy - Oil & Gas industry.
Click here to see the additional POWR Ratings for MVO (Value, Stability, and Sentiment).
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BHP shares were trading at $60.61 per share on Monday afternoon, up $0.18 (+0.30%). Year-to-date, BHP has declined -2.32%, versus a 4.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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