As if 2020 didn’t bring enough uncertainty, January 2021 caused even more confusion for investors as an insurrection led by supporters of former President Donald Trump threatened the very foundations of American democracy.
Thankfully, President Joe Biden was safely inaugurated on Jan. 20. And more importantly for investors, the stock market seemed to shrug off events as continued optimism over the incoming administration and its pandemic response plan seemed to outweigh the more troublesome headlines.
As we enter February and move past these big-picture concerns, then, it may be time to start looking at individual stocks based on their merits. Here are five specific dividend payers that are worth consideration, each with at least a 3% yield and big momentum for their share prices:
— Macerich Co. (ticker: MAC)
— Navient Corp. (NAVI)
— Newell Brands (NWL)
— NRG Energy (NRG)
— PacWest Bancorp (PACW)
Macerich Co. (MAC)
Current yield: 3.1%
Macerich is an integrated real estate investment trust, or REIT, that focuses on regional malls throughout the U.S. with a total of about 51 million square feet across 50 or so shopping centers.
Obviously, the pandemic put a big hurt on brick-and-mortar retailers. As a result, MAC stock felt pressure on rents and an increase in vacancies. Even though the company briefly suspended its dividend last year, the current rate of 15 cents per quarter adds up to a nice yield once more.
Considering shares have more than doubled over the last six months on optimism around vaccinations and the normalization for the economy in 2021, now may be the time to give this dividend stock a look once more.
Navient Corp. (NAVI)
Current yield: 5.4%
Navient is a student loan company, and after President Biden ran on a platform that involved some kind of relief for those suffering under big college debt, shares tumbled in November and December in the wake of Election Day.
However, NAVI stock has rallied lately because Biden’s plan has involved only “forebearance” — a fancy word meaning no interest, penalties or payments — and only applied to federal student loans. In addition to not simply wiping out debt as some NAVI investors feared would happen, borrowers who did not qualify for loans through the U.S. Department of Education were not affected.
Shares have rebounded nicely as a result, and the interest payments to Navient have continued to power significant dividends into 2021.
Newell Brands (NWL)
Current yield: 3.5%
Admittedly, Newell Brands has seen better days.
The conglomerate behind a host of brands — including Calphalon cookware, Sunbeam appliances, Rubbermaid storage systems, Yankee Candle and Sharpie markers — has long been a confused mishmash of business lines that don’t often provide synergies. Efforts over the last few years to slim down the product line seem to be paying off, with reports showing a reduction of more than 30% in SKU numbers compared with 2018.
There are still challenges, as shares remain down more than 50% from their 2017 highs, but the fact that the dividend has held steady at 23 cents a share through the worst of NWL’s declines bodes very well for shareholders. And with shares up about 30% since November, now may be the time to start believing in a turnaround.
NRG Energy (NRG)
Current yield: 3%
New Jersey-based energy company NRG offers electricity to 3.7 million customers in the Northeast, Texas and Illinois.
Power generation is perhaps one of the most reliable businesses out there, as electricity is as much a necessity in the 21st century as food and water for both consumers and businesses alike.
Of course, the last few years have been rocky for NRG due to both the rising debts associated with recent acquisitions as well as the chance that regulators may not be keen on those moves. Recent approval from the Federal Energy Regulatory Commission for NRG’s purchase of Direct Energy hints that things may be better than investors feared — and shares have rallied recently as a result.
PacWest Bancorp (PACW)
Current yield: 3.2%
This bank holding company, based in Los Angeles, owns Pacific Western Bank.
Regional banks don’t have the scale that megabanks like JPMorgan Chase & Co. ( JPM) do. They also don’t have lucrative investment operations to fall back on and are instead tied to the rather humdrum business of managing checking accounts, mortgage lending and small business loans.
As the pandemic hit the LA region hard, so too did PACW suffer last year. As with many other stocks that took a hit in the wake of the pandemic, PacWest is mounting a comeback with 50% gains in the last few months on optimism that the worst is over.
More from U.S. News
Update 01/28/21: This story was published at an earlier date and has been updated with new information.