10 High-Yield Large Caps with Excellent Dividend Coverage

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If you’re in the market for a sustainable source of dividend income, you might like this list.

Here we report 10 large cap stocks with dividend yields above 3%. These companies have good coverage of their dividend as well, with enough operating cash flow and levered free cash flow to completely pay for their annual dividends.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these are reliable dividend sources? Use this list as a starting-off point for your own analysis.

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1. Access a thorough description of all companies mentioned

2. Compare analyst ratings for all stocks mentioned below 

3. Visualize market cap changes for the top stocks mentioned

List sorted by dividend yield.

1. Philippine Long Distance Telephone Co. (PHI): Telecom Services - Foreign Industry. Market cap of $10.53B. Dividend yield at 6.35%, with a payout ratio of 119%.

TTM Operating Cash Flow at $1.80B, or $9.64 on a per-share basis (vs. annual dividend per share at $2.67, TTM Operating Cash Flow per share / annual dividend per share stands at 3.61).

TTM Levered Free Cash Flow at $919.17M, or $4.92 on a per-share basis (vs. annual dividend per share at $2.67, TTM Levered Free Cash Flow per share / dividend per share stands at 1.84).

The stock has gained 20.32% over the last year.

2. Veolia Environnement S.A. (VE): Electric Utilities Industry. Market cap of $14.57B. Dividend yield at 5.88%, with a payout ratio of 95.83%.

TTM Operating Cash Flow at $4.87B, or $10.05 on a per-share basis (vs. annual dividend per share at $1.46, TTM Operating Cash Flow per share / annual dividend per share stands at 6.88).

TTM Levered Free Cash Flow at $782.88M, or $1.61 on a per-share basis (vs. annual dividend per share at $1.46, TTM Levered Free Cash Flow per share / dividend per share stands at 1.11).

The stock has gained 19.19% over the last year.

3. Telefonos de Mexico, S.A.B. de C.V. (TMX): Long Distance Carriers Industry. Market cap of $17.04B. Dividend yield at 4.47%, with a payout ratio of 59%.

TTM Operating Cash Flow at $2.90B, or $3.21 on a per-share basis (vs. annual dividend per share at $0.90, TTM Operating Cash Flow per share / annual dividend per share stands at 3.57).

TTM Levered Free Cash Flow at $2.27B, or $2.51 on a per-share basis (vs. annual dividend per share at $0.90, TTM Levered Free Cash Flow per share / dividend per share stands at 2.79).

The stock has gained 37.22% over the last year.

4. CRH plc (CRH): Cement Industry. Market cap of $15.34B. Dividend yield at 4.13%, with a payout ratio of 102.25%.

TTM Operating Cash Flow at $1.96B, or $2.76 on a per-share basis (vs. annual dividend per share at $1.22, TTM Operating Cash Flow per share / annual dividend per share stands at 2.27).

TTM Levered Free Cash Flow at $908.82M, or $1.28 on a per-share basis (vs. annual dividend per share at $1.22, TTM Levered Free Cash Flow per share / dividend per share stands at 1.05).

It's been a rough couple of days for the stock, losing 6.96% over the last week.

5. ConAgra Foods, Inc. (CAG): Processed & Packaged Goods Industry. Market cap of $10.19B. Dividend yield at 3.69%, with a payout ratio of 55.2%.

TTM Operating Cash Flow at $1.31B, or $3.20 on a per-share basis (vs. annual dividend per share at $0.92, TTM Operating Cash Flow per share / annual dividend per share stands at 3.48).

TTM Levered Free Cash Flow at $819.59M, or $2.00 on a per-share basis (vs. annual dividend per share at $0.92, TTM Levered Free Cash Flow per share / dividend per share stands at 2.18).

The stock has gained 6.58% over the last year.

6. Enersis S.A. (ENI): Foreign Utilities Industry. Market cap of $14.14B. Dividend yield at 3.65%, with a payout ratio of 20%.

TTM Operating Cash Flow at $3.89B, or $5.96 on a per-share basis (vs. annual dividend per share at $0.80, TTM Operating Cash Flow per share / annual dividend per share stands at 7.45).

TTM Levered Free Cash Flow at $1.56B, or $2.39 on a per-share basis (vs. annual dividend per share at $0.80, TTM Levered Free Cash Flow per share / dividend per share stands at 2.99).

The stock has gained 18.3% over the last year.

7. International Paper Co. (IP): Paper & Paper Products Industry. Market cap of $13.37B. Dividend yield at 3.43%, with a payout ratio of 22.47%.

TTM Operating Cash Flow at $1.99B, or $4.55 on a per-share basis (vs. annual dividend per share at $1.05, TTM Operating Cash Flow per share / annual dividend per share stands at 4.33).

TTM Levered Free Cash Flow at $1.32B, or $3.02 on a per-share basis (vs. annual dividend per share at $1.05, TTM Levered Free Cash Flow per share / dividend per share stands at 2.88).

This is a risky stock that is significantly more volatile than the overall market (beta = 2.2). IP appears to have good liquidity to back up its dividend-- current ratio at 1.89 and quick ratio at 1.36. The stock has gained 31.98% over the last year.

8. Pearson plc (PSO): Publishing - Books Industry. Market cap of $15.0B. Dividend yield at 3.38%, with a payout ratio of 58.79%.

TTM Operating Cash Flow at $1.64B, or $2.05 on a per-share basis (vs. annual dividend per share at $0.84, TTM Operating Cash Flow per share / annual dividend per share stands at 2.44).

TTM Levered Free Cash Flow at $1.03B, or $1.29 on a per-share basis (vs. annual dividend per share at $0.84, TTM Levered Free Cash Flow per share / dividend per share stands at 1.54).

PSO appears to have good liquidity to back up its dividend -- current ratio at 1.86 and quick ratio at 1.67. The stock has gained 37.3% over the last year.

9. Campbell Soup Co. (CPB): Processed & Packaged Goods Industry. Market cap of $11.06B. Dividend yield at 3.36%, with a payout ratio of 48.22%.

TTM Operating Cash Flow at $1.04B, or $3.25 on a per-share basis (vs. annual dividend per share at $1.16, TTM Operating Cash Flow per share / annual dividend per share stands at 2.8).

TTM Levered Free Cash Flow at $638.88M, or $2.00 on a per-share basis (vs. annual dividend per share at $1.16, TTM Levered Free Cash Flow per share / dividend per share stands at 1.72).

The stock is a short squeeze candidate, with a short float at 10.04% (equivalent to 8.1 days of average volume). The stock has lost 0.69% over the last year.

10. HJ Heinz Co. (HNZ): Food - Major Diversified Industry. Market cap of $17.32B. Dividend yield at 3.34%, with a payout ratio of 59.17%.

TTM Operating Cash Flow at $1.40B, or $4.35 on a per-share basis (vs. annual dividend per share at $1.80, TTM Operating Cash Flow per share / annual dividend per share stands at 2.42).

TTM Levered Free Cash Flow at $1.09B, or $3.39 on a per-share basis (vs. annual dividend per share at $1.80, TTM Levered Free Cash Flow per share / dividend per share stands at 1.88).

The stock has gained 24.7% over the last year.

Operating cash flow, levered free cash flow, and annual dividend sourced from Yahoo! Finance, all other data sourced from Finviz on May 27.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


Kapitall

Kapitall

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