Income investors in these shares enjoyed a double play.
The best dividend stocks are often slow-but-steady companies that offer reliable paydays but not much share price appreciation. And that’s just fine for many income-oriented investors who have no intention of selling their shares, and just want to cash those dividend checks. However, don’t think that means dividend stocks aren’t capable of big moves. A number of income plays in the S&P 500 index gained in 2018 — including one stock that has surged 48 percent despite boasting a big-time 4 percent yield. Here are 10 high-yield stocks in the S&P that have also posted impressive share performance since Jan. 1.
Automatic Data Processing (ticker: ADP)
As the lifeblood of small business payroll and accounting departments, ADP thrived as the U.S. economy hummed along. With 21st century solutions like cloud-based timecards, ADP helps smaller companies focus on running their business without getting lost in the tax code or other paperwork. This cyclical trend has caused a nice uptick in demand, with the stock recently hitting a new 52-week high in late June.
First-half performance: 16 percent
Current yield: 2 percent
Interpublic Group of Companies (IPG)
Advertising and marketing giant IPG has had its share of growing pains over the last few years, as both brands and ad agencies looked to restructure their approaches in response to the rise of the internet and social media as the dominant advertising platform. But recent concerns about privacy and the reliability of Facebook (FB) prompted some to rethink the value of traditional advertising. IPG rallied nicely since late last year in response to this trend.
First-half performance: 16 percent
Current yield: 3.5 percent
Target Corp. (TGT)
Big-box giant Target was not exactly in the good graces of Wall Street a few years ago. It made a costly expansion into Canada that fell flat, and the continued competition from e-commerce giant Amazon.com (AMZN) has been eating into sales and forcing TGT to drive down prices — and margins — to compete. But while share prices remain below the prior highs of a few years ago, this retailer proved it’s not dead yet thanks to better-than-expected results in recent months.
First-half performance: 17 percent
Current yield: 3.5 percent
FirstEnergy Corp. (FE)
Utilities as a group underperformed most other sectors lately. And in prior years, FirstEnergy was among the worst in this struggling group as big debt loads and revenue challenges caused it to slash its dividend from 55 cents a quarter to 36 cents in 2014. But after enduring the punishment immediately after that decision, FE stock bounced back thanks to reinvestment in its regulated operations to achieve stability and growth. The dividend seems safer now and the share price has certainly been moving in the right direction.
First-half performance: 17 percent
Current yield: 4.1 percent
Valero Energy Corp. (VLO)
Valero is one of the world’s largest independent energy refining companies. That independence gives it a key advantage, since VLO can refine U.S. oil brought in from shale fracking operations or imported crude oil from international markets. As the economy keeps humming, rising energy prices and rising demand mean a brisk tailwind for Valero operations — and consistent revenue to fuel its generous dividend.
First-half performance: 21 percent
Current yield: 2.9 percent
AES Corp. (AES)
Utility AES may not sound like one of the most dynamic businesses. But providing power generation services can indeed be a growth business when you’re servicing 16 different countries from Europe to South America to Asia. This $8 billion corporation may not be as well known as some larger electricity providers, but its rapid growth should make investors take notice.
First-half performance: 24 percent
Current yield: 3.9 percent
Oneok (OKE)
Natural gas storage and transportation company Oneok is a crucial part of America’s energy infrastructure. And thanks to the high volume of fossil fuels extracted by domestic fracking companies, its trucking, pipelines and storage facilities are doing a brisk business from Illinois to New Mexico to Texas. And as it is a “midstream” company, it is more of a toll-taker and intermediary between other energy firms and thus not as exposed to price volatility as other stocks in the sector.
First-half performance: 31 percent
Current yield: 4.3 percent
Kohl’s Corp. (KSS)
Another entry from the embattled retail sector, Kohl’s thrived in 2018 despite the pressures of e-commerce thanks in part to near-record consumer confidence in the U.S. And as hokey as the initiative may sound to some, the company’s multi-year “Greatness Agenda” strategy to restructure its operations and better connect with customers yields significant results and stronger sales.
First-half performance: 34 percent
Current yield: 4.4 percent
Seagate Technology (STX)
For a while, some investors have scoffed at hard disk drive manufacturer Seagate as a dead-money investment in the age of mobile technology and cloud computing. However, despite a bit of volatility, this tech company continues to stay in favor this year thanks to strong baseline sales and a juicy dividend to entice investors.
First-half performance: 35 percent
Current yield: 4.4 percent
Macy’s (M)
Retailer Macy’s admittedly had its challenges over the past few years. But 2018 is categorically a winner for this department store, with M stock trouncing not just its competitors but stocks across all sectors of the market thanks to strong earnings and investor optimism.
First-half performance: 48 percent
Current yield: 4 percent
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10 of the Best S&P Dividend Stocks in the First Half originally appeared on usnews.com
