In this article, we discuss 5 quality stocks with dividend yields over 2%. If you want to read our detailed analysis of dividend investments and the current market turmoil as well as the risk/reward and methodology of this list, go directly to read 10 Quality Stocks With Dividend Yields Over 2%.
5. Tyson Foods, Inc. (NYSE:TSN)
Number of Hedge Fund Holders: 37
Dividend Yield as of September 22: 2.59%
Tyson Foods, Inc. (NYSE:TSN) is an American multinational corporation that operates in the food industry. It is one of the largest processors of chicken, beef, and pork globally. In August, Stephens maintained its Overweight rating on the stock with a $95 price target, following the company’s recent quarterly earnings. The firm highlighted the clear momentum in the company’s chicken business and its improving earnings into the next fiscal year.
In fiscal Q3 2022, Tyson Foods, Inc. (NYSE:TSN) reported revenue of $13.5 billion, up 8.2% from the same period last year. The company’s operating cash flow stood at $666 million and it generated $190 million in free cash flow. It ended the quarter with over $1 billion in cash and cash equivalents and over $9.3 billion in total current assets.
Tyson Foods, Inc. (NYSE:TSN) has been raising its dividends consistently for the past 10 years and has a five-year dividend CAGR of 15.38%. The company currently pays a quarterly dividend of $0.46 per share and has a yield of 2.59%, as of September 22.
Cliff Asness’ AQR Capital owned over 3.2 million shares in Tyson Foods, Inc. (NYSE:TSN) worth $278.4 million, becoming the company’s largest stakeholder in Q2. Overall, 37 hedge funds tracked by Insider Monkey owned stakes in the food company in Q2, with a total value of $1.15 billion.
4. Weyerhaeuser Company (NYSE:WY)
Number of Hedge Fund Holders: 41
Dividend Yield as of September 22: 2.45%
Weyerhaeuser Company (NYSE:WY) is a Washington-based timberland company that has over 14 million acres of timberlands under long-term licenses in Canada. In addition to this, the company specializes in the production of wood products. It currently pays a quarterly dividend of $0.18 per share and has a yield of 2.45%, as of September 22.
In Q2 2022, Weyerhaeuser Company (NYSE:WY) reported strong earnings. It posted an EPS of $1.06 and revenue of $2.97 billion, which beat estimates by $0.08 and $140 million, respectively. The company reported $1.14 billion in operating cash flow, up from $957 million in the previous quarter. Its free cash flow for the quarter came in at $800 million. The company ended the quarter with over $1.7 billion available in cash and cash equivalents, compared with $1.2 billion in the preceding quarter.
At the end of June 2022, 41 hedge funds in Insider Monkey’s database owned stakes in Weyerhaeuser Company (NYSE:WY), up from 40 in the previous quarter. The total value of these stakes is over $328.6 million, compared with $280 million worth of stakes owned by hedge funds a quarter earlier.
3. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 55
Dividend Yield as of September 22: 2.65%
Lockheed Martin Corporation (NYSE:LMT) is an American aerospace company that manufactures security and defense products. The company also engages in research and development of advanced technological systems. In August, RBC Capital initiated its coverage of the stock with a Sector Perform rating and a $460 price target. The firm called the company the largest defense contractor globally and appreciated its portfolio.
In Q2 2022, Lockheed Martin Corporation (NYSE:LMT) reported an operating cash flow of $1.3 billion, up from $1.26 billion in the same period last year. The company generated $1.02 billion in free cash flow during the quarter, compared with $950 million in the prior-year period. It returned $1.1 billion to shareholders through dividends and share repurchases.
Lockheed Martin Corporation (NYSE:LMT) currently offers $2.80 per share in quarterly dividends. The company has been paying consecutive dividends to shareholders since 1996 and maintains a 19-year streak of dividend growth. As of September 22, the stock has a dividend yield of 2.65%.
As per Insider Monkey’s Q2 2022 database, 55 hedge funds had positions in Lockheed Martin Corporation (NYSE:LMT), compared with 56 a quarter earlier. The stakes owned by these hedge funds are valued at over $2.56 billion.
Old West Investment Management mentioned Lockheed Martin Corporation (NYSE:LMT) in its Q2 2022 investor letter. Here is what the firm has to say:
“As I sat in the theater watching Top Gun: Maverick, it gave me tremendous pride knowing we are shareholders of Lockheed Martin (NYSE:LMT). When the Top Gun: Maverick team was looking to push the envelope and stand true to Maverick’s need for speed, LMT’s Skunk Works was their first call. With Skunk Works expertise in developing the fastest known aircraft along with a passion for defining the future of aerospace, LMT is at the epicenter of our nation’s defense.
Based in Bethesda, Maryland, LMT is an American aerospace arms, defense, information security and technology company. LMT employs 115,000 people worldwide, including 60,000 engineers and scientists. LMT is the world’s largest defense contractor. They manufacture the F-16, F-22 and F-35 fighter jets, Sikorsky Black Hawk helicopters, Skunk Works technology, Javelin, Himars, and Tomahawk missile systems and much more…” (Click here to see the full text)
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 71
Dividend Yield as of September 22: 2.43%
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based multinational company that manufactures semiconductors and software and also provides wireless services to its consumers. The company has been making consistent dividend payments to its shareholders since 2003 and has raised its payouts at a CAGR of 6% in the last five years. It currently pays a quarterly dividend of $0.75 per share and has a yield of 2.43%, as of September 22.
In Q2 2022, QUALCOMM Incorporated (NASDAQ:QCOM) reported revenue of $10.9 billion, which showed a 37.3% growth from the same period last year. The company generated $2.3 billion in free cash flow, up from $2.2 billion in the previous quarter. It returned $1.3 billion to shareholders during the quarter, $842 million of which represented the dividend payments. This shows that its dividends are secure within its FCF.
In September, Deutsche Bank lifted its price target on QUALCOMM Incorporated (NASDAQ:QCOM) to $170 and kept a Buy rating on the shares, highlighting the company’s differentiated technology portfolio and its unique go-to-market strategy.
At the end of Q2 2022, 71 hedge funds in Insider Monkey’s database owned stakes in QUALCOMM Incorporated (NASDAQ:QCOM), down from 73 in the previous quarter. These stakes hold a collective value of over $2.8 billion. Ken Griffin and D. E. Shaw were some of the company’s major stakeholders in Q2.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield as of September 22: 2.72%
Johnson & Johnson (NYSE:JNJ) is an American multinational pharmaceutical company that also specializes in other household and consumer products. On September 14, the company’s board announced the authorization of a buyback program for stock worth $5 billion. This was attributed to the company’s strong free cash flow and lowest levels of debt in five years. In Q2 2022, the company generated $4.7 billion in free cash flow, up from $3.37 billion in the previous quarter.
Johnson & Johnson (NYSE:JNJ) holds one of the strongest dividend growth track records in the US market, raising its payouts for 60 years consistently. The company currently pays a quarterly dividend of $1.13 per share, with a dividend yield of 2.72%, as recorded on September 22.
In July, SVB Securities maintained its Outperform rating on Johnson & Johnson (NYSE:JNJ) with a $194 price target, as the demand for the company’s key products and segments gain momentum. Moreover, the firm also appreciated the management’s effort to keep costs in check.
As of the close of Q2 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Johnson & Johnson (NYSE:JNJ), with a total value of over $6.7 billion. In the previous quarter, 83 hedge funds owned stakes in the pharmaceutical company as well, worth over $7.4 billion.
Mayar Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter. Here is what the firm has to say:
“J&J is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.
Here’s how JNJ make and spend a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics.
To make that dollar, however, JNJ typically spends about 25 cents to make the products themselves and another 27 cents on marketing and general administrative functions. This leaves JNJ with about 48 cents on the dollar in profit…”
You can also take a look at 10 Dividend Stocks That Raised Their Dividends in 2022 and 10 Dow Jones Dividend Stocks With Over 1% Yield
