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Barron's Highlights Top 10 S&P 500 Dividend Stocks to Consider: A Quantitative Perspective

Mar 04, 2019

Better Data for Better Investment DecisionsBetter Data for Better Investment Decisions
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  • Stocks with attractive dividend yields may be an attractive option for investors looking to generate cash flow amid low bond yields, a report by Barron’s last week highlights. Today, we will review the report by Barron’s, which identifies the 10 most attractive dividend stocks among S&P 500 companies with dividend yields exceeding 3%, and provide a quantitative perspective with our AI Multi-Factor Global Stock Rankings.
     
  • On Wednesday, we will be publishing our own report highlighting the 10 most attractive dividend stocks in the S&P 500 using our AI Multi-Factor Global Stock Rankings.
     
  • Barron’s explains in its article that, in addition to looking at dividend yields of S&P 500 companies, it employed dividend rankings provided by Reality Shares, an index provider that ranks dividends for their safety using seven different factors, including trailing 12-month earnings growth, dividend action over the last 5 years, the ratio of cash spent on stock buybacks to dividends, and availability of free cash flow.
     
  • Below is the table provided by Barron’s. All 10 of the stocks highlighted below are in the top category for Reality Shares’ dividend rankings.

Barron's Top 10 S&P 500 Dividend Stocks in S&P 500 With +3% Dividend Yields

Company/Ticker Ticker Market Value (bil) Dividend Yield 1-Year Return FY2018 Dividend FY2019E Dividend
AbbVie Inc. ABBV $120.8 5.3% -30.70% $3.86 $4.46
Broadcom Inc. AVGO $110.4 3.9% 12.30% $7.00 $10.60
SL Green Realty Corp. SLG $7.6 3.8% -4.20% $3.29 $3.41
Regions Financial Corporation RF $16.5 3.5% -15.80% $0.46 $0.60
Phillips 66 PSX $44.4 3.3% 9.00% $3.10 $3.36
Marathon Petroleum Corporation MPC $44.7 3.3% 0.50% $1.84 $2.11
T. Rowe Price Group, Inc. TROW $23.2 3.1% -11.40% $2.80 $2.96
The PNC Financial Services Group, Inc. PNC $56.4 3.1% -21.50% $3.40 $4.09
JPMorgan Chase & Co. JPM $348.2 3.1% -9.50% $2.72 $3.39
Comerica Incorporated CMA $13.8 3.1% -11.30% $1.84 $2.61

Source: Barron's, Reality Shares, FactSet

  • As can be clearly seen in the table above, 7 of the 10 dividend stocks highlighted have generated negative price returns over the last year, potentially driving their attractive dividend yields.  
     
  • AbbVie (ABBV) maintains the highest dividend yield among the stocks highlighted by Barron’s, offering 5.3% yield to investors. Also worth highlighting, AbbVie’s stock price has tumbled over 30% in the last year, the most among those highlighted above by Barron’s.
     
  • AbbVie is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
     
  • Four different banking stocks are highlighted by Barron’s in its article with the largest being JPMorgan Chase & Co. (JPM), which maintains a dividend yield of 3.1%. Following the 2008 financial crisis, regulators capped the ability of many US banks to offer dividend payments to investors. Within the last two years, however, financial institutions have begun to gain back the ability to offer investors dividend payments based on stronger capital controls and successful stress tests. The other three banking stocks highlighted by Barron’s, Comerica (CMA), Regions Financials (RF), and PNC Financial Services (PNC), are much smaller than JPMorgan.
     
  • JPMorgan is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
     
  • Comerica is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.  
     
  • Regions Financials is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
     
  • PNC Financial Services is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
     
  • The other five dividend stocks highlighted in the report by Barron’s are tech firm Broadcom (AVGO), real estate investment trust SL Green Realty (SLG), energy company Marathon Petroleum (MPC), energy company Phillips 66 (PSX), and asset management firm T. Rowe Price Group (TROW).
     
  • Broadcom is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.  
     
  • SL Green Realty is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
     
  • Marathon Petroleum is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.  
     
  • Phillips 66 is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  
     
  • T. Rowe Price Group is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS