The Best NYSE Dividend Stocks?
The New York Stock Exchange (NYSE) was founded in 1792, making it the oldest stock exchange in the world. It’s also the biggest stock exchange, with more than one-third of the world’s equities traded on the exchange. As the biggest and oldest stock exchange in history, the NYSE is the first place many investors look for the best dividend stocks.
Income investors looking for the best dividend growth stocks on the NYSE need to consider more than just the yield. After all, a dividend stock that provides investors with capital appreciation is better than a high-dividend growth stock that doesn’t. That’s why it’s important to focus on companies that provide both capital appreciation and a high dividend yield.
Below are three excellent NYSE-listed dividend stocks that have been outpacing the market in 2016.
ONEOK, Inc.
Headquarters: Tulsa, Oklahoma
Share price: $49.95
Market capitalization: $10.51 billion
Forward P/E: 26.86
Annual sales: $7.74 billion
Dividend yield: 4.90%
Payout ratio: 181.4%
Levered free cash flow: $11.56 million.
ONEOK, Inc. (NYSE:OKE) (pronounced “one-oak”) is a diversified gas utilities company that is the sole general partner and 41.2% owner of Oneok Partners LP (NYSE:OKS), one of the largest publicly traded master limited partnerships, which also owns one of the country’s premier natural gas liquids (NGL) systems. (Source: “Investor Story,” ONEOK, Inc., last accessed October 17, 2016.)
Through this partnership, ONEOK gathers, treats, stores, and transports natural gas liquids, as well as natural gas liquid gathering and distribution pipelines and natural gas storage facilities.
In an effort to focus its efforts on its core pipeline business, ONEOK streamlined its operations in 2014 when it spun off its regulated utilities (Oklahoma Natural Gas, Kansas Gas Service, and Texas Gas Service, which distribute natural gas to more than 2.1 million customers) as ONE Gas.
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ONEOK is one of the better NYSE dividend-paying stocks, paying out an annual dividend of 4.9%, or $2.46 per share. Best of all, ONEOK has raised its annual dividend for the last 13 consecutive years. (Source: “Dividend History,” ONEOK, Inc., last accessed October 17, 2016.)
ONEOK has also been one of the best performing stocks on the NYSE in 2016. Since the beginning of January, ONEOK’s share price has soared 115%. The company’s share price still needs to climb an additional 25% before it erases the losses it experienced over 2014 and 2015.
Lockheed Martin Corporation
Headquarters: Bethesda, Maryland
Share price: $233.12
Market capitalization: $70.57 billion
Forward P/E: 18.39
Annual sales: $48.99 billion
Dividend yield: 2.84%
Payout ratio: 53.71%
Levered free cash flow: $3.57 billion.
Lockheed Martin Corporation (NYSE:LMT) is a military contractor and aerospace business that provides its services to both the civil and commercial sectors. The company announced revenue of $48.99 billion last year, 80% of which came from business with the U.S. government, including the Department of Defense and National Aeronautics and Space Administration (NASA). (Source: “2015 Sustainability Report,” Lockheed Martin Corporation, last accessed October 17, 2016.)
At 2.84% ($6.60 per share), Lockheed doesn’t have the biggest annual dividend yield. But thanks to its relationship with the U.S. Government, it has a steady revenue steam. This helps the company provide investors with consistent growth via increasing its annual dividend yield and higher share prices.
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Lockheed has raised its annual dividend for the last 14 consecutive years, and in 2016, the company’s share price has advanced 11.5%, more than double the S&P 500. Furthermore, Lockheed has been one of the best-performing stocks on the NYSE, up more than 440% since the markets bottomed in March 2009. Over the same time frame, its quarterly dividend has increased 219% to $1.82 per share from $0.57 per share. (Source: “Dividends,” Lockheed Martin Corporation, last accessed October 17, 2016.)
Cummins Inc.
Headquarters: Columbus, Indiana
Share price: $126.13
Market capitalization: $21.18 billion
Forward P/E: 16.17
Annual sales: $18.20 billion
Dividend yield: 3.21%
Payout ratio: 53.13
Levered free cash flow: $1.65 billion
Cummins Inc. (NYSE:CMI) is pretty much the only name that comes to mind when most people think of diesel engines. Approximately 50% of the company’s revenues come from the Engine segment, which makes diesel- and natural gas-powered engines for several automotive and industrial markets, among others. Major customers include Ford Motor Company (NYSE:F), Fiat Chrysler Automobiles N.V. (NYSE:FCAU), AB Volvo, Daimler AG, Komatsu Ltd, and PACCAR Inc (NASDAQ:PCAR). (Source: “Investor Overview,” Cummings Inc., last accessed October 17, 2016.)
In 2015, the company accumulated $1.4 billion on revenue of $19.1 billion. Thanks to the company’s dominant global position and steady revenue stream, it has been able to raise its annual dividend yield, which currently stands at 3.21%, or $4.10 per share, for the last 11 years. (Source: “Dividend Information,” Cummings Inc., last accessed October 17, 2016.)
Since the beginning of 2016, Cummins’ share price has increased roughly 50%. To wipe out all of the losses since 2014, the company’s share price needs to climb an additional 20%.
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