In this article, we discuss 10 large-cap dividend stocks with over 5% yield. You can skip our detailed discussion on large-cap dividend investment, and go directly to read 5 Large-Cap Dividend Stocks with Over 5% Yield.
Large-cap stocks are generally considered to be safer investments than small- and mid-cap stocks. These stocks are known to weather economic headwinds better because of their stable financials and diversified business structures. Moreover, prominent large-cap companies like Exxon Mobil Corporation (NYSE:XOM), Merck & Co., Inc. (NYSE:MRK), and The Coca-Cola Company (NYSE:KO) are also strong dividend payers, which is rewarding for investors in this market clampdown.
Wall Street experts have recently emphasized the importance of small-cap companies in the case of a possible recession. However, large-cap stocks have significantly outperformed small-cap stocks historically. According to a report by Pzena Investment Management, Russell 2000, which tracks small-cap companies, returned 9.8% from 2010 to 2020, compared to a 12.5% return of the S&P 500 during the same time period. Another report published by Putnam Investments sheds light on the performance of large-cap stocks in the recessionary periods from 1980 to 2009. The article stated that large-cap companies outperformed small-cap stocks in the months entering into and during the early period of recessions. The report further mentioned that small-caps stocks gain an advantage over large caps when the economy exits a recession.
According to several recent surveys, there is a high probability of a global recession over the next 12 months. The S&P 500 is down 10.89% year-to-date and the Russell 2000 has fallen by 12.55% in 2022 so far. In this situation, investors are looking for large-cap names that can promise steady income during these difficult times.
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Our Methodology
For this list, we selected large-cap dividend stocks with market caps of more than $10 billion. These stocks have a yield of over 5%, as of August 18. In addition to this, these dividend companies are also famous among 895 money managers tracked by Insider Monkey as of the end of June 2022.
Large-Cap Dividend Stocks with Over 5% Yield
10. The Williams Companies, Inc. (NYSE:WMB)
Dividend Yield as of August 18: 5.00%
The Williams Companies, Inc. (NYSE:WMB) is an Oklahoma-based energy company that specializes in natural gas processing and transportation. In August, Barclays raised its price target on the stock to $39 with an Overweight rating on the shares, expecting the US refining fundamentals to remain stable in the current market environment.
In Q2 2022, The Williams Companies, Inc. (NYSE:WMB) reported revenue of $2.49 billion, up 9.2% from the same period last year. The company’s cash flow remained stable during the quarter, with its cash flow from operations coming in at $1.098 billion, up 4% year-over-year. Moreover, available funds from operations (AFFO) stood at over $1.13 billion, presenting a 23% growth from the same period last year.
The Williams Companies, Inc. (NYSE:WMB) pays a quarterly dividend of $0.425 per share, raising it by 4% in February. The company has been raising its dividends consistently for the past six years, with a five-year CAGR of 7%. As of August 18, the stock’s dividend yield stood at 5.00%. The company can be a good addition to dividend portfolios with other famous dividend stocks, such as Exxon Mobil Corporation (NYSE:XOM), Merck & Co., Inc. (NYSE:MRK), and The Coca-Cola Company (NYSE:KO).
At the end of June 2022, 36 hedge funds in Insider Monkey’s database owned stakes in The Williams Companies, Inc. (NYSE:WMB), down from 38 in the previous quarter. These stakes have a collective value of over $345 million.
Longleaf Partners Fund mentioned The Williams Companies, Inc. (NYSE:WMB) in its Q1 2022 investor letter. Here is what the firm has to say:
“Williams – Williams similarly benefitted from the positive natural gas tailwinds in the quarter. We scaled back our position on the back of strong performance but remain confident in the business. Its infrastructure positions Williams to be an important part of the renewable energy transition in the US through joint projects with the likes of Orsted in wind and other alternative energy solutions.”
9. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Dividend Yield as of August 18: 5.01%
A multinational pharmaceutical company, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) remained a popular buy among elite funds in Q2 2022, as 40 hedge funds in Insider Monkey’s database owned stakes in the company, up from 38 in the previous quarter. These stakes have a total value of nearly $600 million.
On July 13, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) declared a quarterly dividend of $0.48 per share, a 0.5% increase from its previous dividend. The company maintains a 47-year track record of consistent dividend growth. As of August 18, the stock’s dividend yield came in at 5.01%.
In fiscal Q3 2022, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) declared net cash provided by operating activities of $1.6 billion while its free cash flow stood at $1.3 billion. The company’s cash position also remained strong, reporting nearly $2.3 billion in cash and cash equivalents and $18.8 billion in total assets.
In July, JPMorgan lowered its price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $42 following the company’s fiscal Q3 results. The firm maintained a Neutral rating on the shares.
Miller Howard Investments mentioned Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q3 2021 investor letter. Here is what the firm had to say:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
8. The Bank of Nova Scotia (NYSE:BNS)
Dividend Yield as of August 18: 5.05%
The Bank of Nova Scotia (NYSE:BNS) is a Canada-based financial services company that offers commercial and personal banking services to its consumers. The company has been a strong dividend player, paying dividends consistently since 1833, and has raised its payouts for the past 43 years consecutively. It currently pays a quarterly dividend of C$1.03 per share, with a dividend yield of 5.05%, as of August 18.
The Bank of Nova Scotia (NYSE:BNS) reported an earnings beat in Q2 2022, with revenue of C$7.94 billion, surpassing estimates by C$70 million. The company’s operating cash flow stood at over $9.2 billion and its free cash flow came in at $9.1 billion. Moreover, its return on equity stood at 16.4%, compared with 14.9% in the previous quarter.
In June, Canaccord raised its price target on The Bank of Nova Scotia (NYSE:BNS) to C$92 and maintained a Buy rating on the shares.
As of the close of Q2 2022, 16 hedge funds in Insider Monkey’s database owned stakes in The Bank of Nova Scotia (NYSE:BNS), down from 18 in the previous quarter. These stakes hold a collective value of over $132.2 million. Ken Griffin and Jim Simons were the company’s most prominent stakeholders in Q2.
7. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of August 18: 5.80%
An American multinational telecommunications company, Verizon Communications Inc. (NYSE:VZ) showed a strong cash position in Q2 2022, with an operating cash flow of over $10.8 billion, up from $6.8 billion in the previous quarter. Its free cash flow also jumped to $5.7 billion, from $838 million in the preceding quarter. The company also reported a 9.1% increase in its total wireless service revenue at $18.4 billion.
Verizon Communications Inc. (NYSE:VZ) has been raising its dividends for the past 15 years and currently pays a quarterly dividend of $0.64 per share. As of August 18, the stock’s dividend yield was recorded at 5.80%.
As per Insider Monkey’s Q2 2022 database, 58 hedge funds owned investments in Verizon Communications Inc. (NYSE:VZ), down from 69 in the previous quarter. The investments are valued at nearly $2.3 billion. With 17.3 million shares, Fisher Asset Management was the company’s leading stakeholder in Q2.
6. ONEOK, Inc. (NYSE:OKE)
Dividend Yield as of August 18: 5.87%
ONEOK, Inc. (NYSE:OKE) is a Tulsa-based natural gas liquids company that is also a leading midstream service provider in the US. The number of hedge funds tracked by Insider Monkey with stakes in the company grew to 30 in Q2 2022, from 25 in the preceding quarter. The total value of these stakes came in at over $243 million.
On August 8, ONEOK, Inc. (NYSE:OKE) announced its Q2 2022 results, posting a net income of $414.4 million, presenting a 21% year-over-year growth. Its cash generation was also strong, with over $485 million in free cash flow, up from $205.2 million in the previous quarter. In addition to this, the company also reported a 22% year-over-year increase in natural gas pipelines segment adjusted EBITDA.
ONEOK, Inc. (NYSE:OKE) pays a quarterly dividend of $0.935 per share, with a dividend yield of 5.87%, as recorded on August 18. The company has been making dividend payments consistently for the past 25 years.
In August, Mizuho raised its price target on ONEOK, Inc. (NYSE:OKE) to $65 and maintained a Neutral rating on the shares.
In addition to Exxon Mobil Corporation (NYSE:XOM), Merck & Co., Inc. (NYSE:MRK), and The Coca-Cola Company (NYSE:KO), ONEOK, Inc. (NYSE:OKE) is another dividend stock that is gaining popularity among investors.
Miller Howard Investments mentioned ONEOK, Inc. (NYSE:OKE) in its Q3 2021 investor letter. Here is what the firm has to say:
“In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK Inc. (OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”
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Disclosure. None. 10 Large-Cap Dividend Stocks with Over 5% Yield is originally published on Insider Monkey.