The dividend yield is a key factor for many stock market investors. Combining this with a systematic upward trend in their amounts over the long term offers a double benefit.
We have identified five large-cap U.S. companies that offer the combined benefits of attractive dividend yields, coupled with a consistent long-term uptrend in their amounts, and that have not decided to cut or reduce their dividends in 2020 and 2021, ensuring solid returns, even in a complex economic environment (health crisis). Discover our presentation of these 5 US stocks, as well as a detailed analysis of their dividend growth and yield, followed by a technical analysis of their share price. They come from the energy sector, the listed real estate sector, and the diversified holding segment.
Dividend: how to calculate the yield of a share?
The dividend yield is calculated in two ways
- If you already own the shares: the amount of the dividend per share is divided by your unit cost price (UPC).
- If you don’t own the stock: the amount of the dividend per share divided by the stock’s market price.
Example: the shares of company A have an annual dividend of €1.30 and the stock market price of the shares of company A is €28. The dividend yield is calculated as follows
$1.30 (annual dividend amount) / $28 (share price) = 4.64%.
Now, if the investor has acquired shares of company A on several dates in the past and at different prices, his securities account or PEA will show him a PRU (Prix de Revient Unitaire) corresponding to the weighted average of his purchase prices minus his acquisition costs.
Let’s say he bought 500 shares of company A in 2015 at the stock market price of $19, including $9.50 in transaction costs. Later, in 2017, he acquires another 500 shares for $34, including $17 in transaction costs.
Calculation of the PRU (Price per Unit)
The acquisition cost of the 2015 purchase: (500 shares X $19) + $9.50 in fees = $9,509.50
The acquisition cost of the 2017 purchase: (500 shares X $34) + $17 in fees = $17,017.00
Overall cost: ( $9,509.50 + $17,017.00) = $26,526.50
PRU: $26,526.50 / 1,000 (total number of shares) = $26.53 per share
In our example above, Company A pays an annual dividend of $1.30. The investor’s return is therefore 4.90% ($1.30 / $26.53).
American stock with quarterly dividends
In the United States, it is customary to pay dividends quarterly, whereas most European companies, especially in France, opt for annual payments.
This is because many pension funds in the US are invested in the shares of publicly traded companies. Thus, possible decreases in their amounts may eventually have an impact on the pensions of Americans. The American-funded pension system is different from the French pension system.
Opting for quarterly dividend payments makes the US pension fund system more fluid. In addition, individual investors also appreciate the fact that they receive quarterly coupons in order to generate an annuity through stock market investments.
How did LEVMAD come up with this ranking of high-dividend US stocks?
Here are the selection criteria applied in our selection of these 5 US stocks:
- A systematic upward trend in the evolution of the dividend amount over the long term.
- Average annual dividend yield greater than or equal to or equal to 6%.
- Large companies, with a market capitalization of more than US$3 billion.
- No decisions to “cut” or reduce quarterly dividends.
5 U.S. stocks with yields over 6% and long-term dividend growth
1. Icahn enterprises share: diversified American holding company
This U.S. holding company Icahn Entreprises had revenues of US$11.13 billion in 2021.
The Icahn Enterprises conglomerate’s business is diversified across many sectors such as automotive, housewares, real estate development, food packaging industry, and metals sector.
ISIN Code: US4511001012 IEP
Icahn Enterprise’s market capitalization as of November 18, 2022: $17.50 billion
Icahn Enterprises share price as of November 18, 2022: $51.85
Icahn Enterprise’s quarterly dividends between 2016 and 2022
(In $ per share, reporting dates withheld)
Icahn Enterprises 4-Quarter Dividend Yield (Q4 2022): $8.00 (15.43%)
Icahn Enterprises Average Annual Dividend Yield (Q4 2022 period): $7.28 (14.04%)
Icahn Enterprises dividend payment frequency: quarterly
Icahn Enterprises dividend growth over the period (Q1 2016 – Q4 2022): + 33.33
Icahn Enterprises stock has been in an uptrend since March 2020 and support for the long-term support zone is located at the $22.80 level. However, caution is still warranted given the bearish divergences in the momentum indicators. Any break below the MM100, currently around $46, could trigger a return to the low points.
2. Action Medical Properties Trust: healthcare REIT
Medical Properties Trust had revenues of US$1.55 billion in 2021.
Medical Properties Trust owns and leases 438 medical facilities, primarily in North America, but also in Europe, Australia, and South America.
ISIN Code: US58463J3041 MPW
The market capitalization of Medical Properties Trust as of November 18, 2022: US$ 7.40 billion
Medical Properties Trust share price as of November 18, 2022: $12.37.
Medical Properties Trust Quarterly Dividends from 2016 to 2022
(In $ per share, reporting dates withheld)
Medical Properties Trust 4-Quarter Dividend Yield (Q1 2022 – Q4 2022): $1.16 (9.38%)
Medical Properties Trust average annual dividend yield (period Q1 2016 – Q4 2022): $1.04 (8.41%)
Medical Properties Trust dividend payout frequency: quarterly
Medical Properties Trust dividend growth over the period (Q1 2016 – Q4 2022): +31.82
3. Magellan Midstream Partners share: a player in the oil and gas sector
The Magellan Midstream Partners group had revenues of US$2.73 billion in 2021.
Magellan Midstream Partners operates in the transportation, storage, and distribution of oil and gas products in the United States.
ISIN Code: US5590801065 MMP
The market capitalization of Magellan Midstream Partners as of November 18, 2022: $10.63 billion
Magellan Midstream Partners share price as of November 18, 2022: $51.91
Magellan Midstream Partners’ quarterly dividends from 2016 to 2022
(In $ per share, reporting dates withheld).
Magellan Midstream Partners 4-Quarter Dividend Yield (Q1 2022 – Q4 2022): $4.16 (8.01%)
Magellan Midstream Partners average annual dividend yield (period Q1 2016 – Q4 2022): $3.86 (7.44%)
Magellan Midstream Partners dividend payment frequency: quarterly
Magellan Midstream Partners dividend growth over the period (Q1 2016 – Q4 2022): + 33.50
Magellan Midstream Partners stock has been in a steady uptrend since the Covid crisis. The stock is back on its ATH (Time High). Breaching this zone after a probable consolidation could lead the stock to $70 (+30%) within 2 years and to $84 (+56%) within 5 years. The technical indicators are not saturated and seem to support the underlying trend. Only a return to below $44 should cancel this scenario.
4. Action Enterprise Products Partners: a major US pipeline operator
The Enterprise Products Partners group had revenues of US$40.81 billion in 2021.
This large American group specializes in the operation of gas pipelines in North America.
ISIN Code: US2937921078 EPD
Enterprise Products Partners’ market capitalization as of November 18, 2022: $54.35 billion
Enterprise Products Partners share price as of November 18, 2022: $24.98
Enterprise Products Partners’ quarterly dividends from 2016 to 2022
(In $ per share, reporting dates withheld)
Enterprise Products Partners 4-quarter dividend yield (Q1 2022 – Q4 2022): $1.88 (7.53%)
Enterprise Products Partners average annual dividend yield (period Q1 2016 – Q4 2022): $1.74 (6.97%)
Enterprise Products Partners dividend payment frequency: quarterly
Enterprise Products Partners dividend growth over the period (Q1 2016 – Q4 2022): +21.79
5. Action Enviva: world leader in wood pellets
Enviva had US$1.04 billion in sales in 2021.
With its 10 U.S. plants, Enviva is a bioenergy group whose business is producing wood pellets. Its customer base is mainly European and Japanese.
ISIN Code: US29415B1035 EVA
Enviva’s market capitalization as of November 18, 2022: US$3.89 billion
Enviva share price as of November 18, 2022: $58.29
Enviva’s quarterly dividends between 2016 and 2022
(In $ per share, reporting dates used)
Enviva stock return over the last 4 quarters (Q1 2022 – Q4 2022): $3.58 (6.14%)
Average annual Enviva dividend yield (period Q1 2016 – Q4 2022): $2.73 (4.68%)
Enviva Dividend Payout Frequency: Quarterly
Enviva dividend growth over the period (Q1 2016 – Q4 2022): +96.74