U.S. stocks with attractive dividend yields have performed very well this year, for obvious reasons: Interest rates have declined at home and investors in Europe and Japan — where government and central-bank policies have pushed bond yields well into the negative — are desperate to find investments that will give them income. This means the money flow continues to support U.S. dividend stocks.
With 10-year U.S. Treasury notes TMUBMUSD10Y, +5.22% yielding 1.80%, the 1.90% dividend yield for the entire S&P 500 index SPX, +0.86% looks pretty good, considering that you should also expect your share prices to rise over the long term.
A different performance trend for Wall Street’s favorite dividend stocks
In our recent series listing Wall Street analysts’ favorite large-cap, midcap and small-cap stocks for growth in 2020, we’ve seen a repeat pattern: Many of them are expected to bounce back after underperformance (relative to the broad indexes) this year. Mark Hulbert explained that the worst stocks in a given year tend to rebound the following year.
But with the dividend stocks we see something different — all but two of the 28 stocks listed below have had positive returns this year (with dividends reinvested), and all but six have seen double-digit returns.
So if you are interested in any of the stocks on the following list, keep in mind that you are not looking at a list of recovery plays. You’re in it for the dividend yield and hopefully a rising share price over the long term (meaning several years). Do your own research to determine whether you feel comfortable that the company’s strategy will keep it competitive for the next decade.
Wall Street’s favorite dividend stocks
Starting with the S&P 1500 Composite Index (made up of the S&P 500 SPX, +0.86%, the S&P 400 Mid Cap Index MID, +1.04% and the S&P Small Cap 600 Index SML, +1.06% ), there are 28 stocks with dividend yields of at least 2.50% as well as at least 75% “buy” or equivalent ratings among five or more analysts.
Here they are, sorted by dividend yield:
| Company | Ticker | Dividend yield | Share 'buy' ratings | Share neutral ratings | Share 'sell' ratings | Closing price - Dec. 11 | Consensus price target | Implied 12-month upside potential | Total return - 2019 through Dec. 11 |
| Redwood Trust Inc. | RWT, +0.30% | 7.29% | 100% | 0% | 0% | $16.45 | $18.00 | 9% | 15% |
| Williams Cos. | WMB, -0.70% | 6.55% | 79% | 21% | 0% | $23.19 | $27.59 | 19% | 10% |
| Archrock Inc. | AROC, +1.65% | 6.39% | 83% | 17% | 0% | $9.08 | $13.92 | 53% | 28% |
| Schlumberger NV | SLB, +1.74% | 5.21% | 81% | 19% | 0% | $38.40 | $42.28 | 10% | 12% |
| Medical Properties Trust Inc. | MPW, -2.31% | 5.01% | 75% | 25% | 0% | $20.74 | $22.08 | 6% | 36% |
| Weyerhaeuser Co. | WY, +0.75% | 4.64% | 77% | 15% | 8% | $29.33 | $31.95 | 9% | 41% |
| Easterly Government Properties Inc. | DEA, -1.95% | 4.51% | 83% | 17% | 0% | $23.07 | $24.50 | 6% | 55% |
| F.N.B. Corp. | FNB, +3.71% | 3.96% | 88% | 12% | 0% | $12.13 | $13.81 | 14% | 29% |
| Valero Energy Corp. | VLO, +1.77% | 3.88% | 80% | 20% | 0% | $92.89 | $108.78 | 17% | 29% |
| Marathon Petroleum Corp. | MPC, +3.31% | 3.71% | 89% | 11% | 0% | $57.11 | $80.65 | 41% | 1% |
| Essential Properties Realty Trust Inc. | EPRT, -2.85% | 3.65% | 80% | 20% | 0% | $25.23 | $26.25 | 4% | 88% |
| Citizens Financial Group Inc. | CFG, +3.63% | 3.47% | 76% | 19% | 5% | $39.14 | $41.30 | 6% | 37% |
| Agree Realty Corp. | ADC, -1.88% | 3.30% | 91% | 9% | 0% | $70.83 | $82.90 | 17% | 23% |
| Dine Brands Global Inc. | DIN, +0.29% | 3.29% | 100% | 0% | 0% | $83.82 | $96.50 | 15% | 28% |
| Baker Hughes Co. Class A | BKR, +4.76% | 3.17% | 86% | 14% | 0% | $22.68 | $28.75 | 27% | 9% |
| Halliburton Co. | HAL, +3.93% | 3.08% | 84% | 16% | 0% | $23.38 | $26.02 | 11% | -9% |
| Cousins Properties Inc. | CUZ, -1.47% | 2.90% | 83% | 17% | 0% | $40.01 | $44.40 | 11% | 31% |
| Morgan Stanley | MS, +2.51% | 2.83% | 77% | 19% | 4% | $49.45 | $53.60 | 8% | 28% |
| Lincoln National Corp. | LNC, +4.23% | 2.77% | 79% | 21% | 0% | $57.71 | $70.79 | 23% | 15% |
| Home BancShares Inc. | HOMB, +2.43% | 2.74% | 78% | 22% | 0% | $18.96 | $21.63 | 14% | 19% |
| Merck & Co. Inc. | MRK, +0.66% | 2.74% | 81% | 19% | 0% | $88.98 | $97.50 | 10% | 19% |
| ConocoPhillips | COP, +1.48% | 2.72% | 91% | 9% | 0% | $61.68 | $73.63 | 19% | 1% |
| Citigroup Inc. | C, +1.99% | 2.70% | 83% | 13% | 4% | $75.55 | $84.25 | 12% | 49% |
| TechnipFMC PLC | FTI, +2.90% | 2.69% | 81% | 16% | 3% | $19.34 | $28.56 | 48% | 1% |
| BlackRock Inc. | BLK, +1.66% | 2.67% | 82% | 18% | 0% | $493.91 | $519.80 | 5% | 30% |
| InterDigital Inc. | IDCC, +2.08% | 2.60% | 100% | 0% | 0% | $53.75 | $92.60 | 72% | -17% |
| American Assets Trust Inc. | AAT, -3.13% | 2.59% | 83% | 0% | 17% | $46.35 | $50.50 | 9% | 18% |
| Royal Caribbean Cruises Ltd. | RCL, +1.35% | 2.53% | 75% | 25% | 0% | $123.32 | $140.47 | 14% | 28% |
| Source: FactSet | |||||||||
You can click the tickers for more about each company, including business profiles and price ratios.
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