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We may be facing a recession, but 2022 will be one of our best years FTSE 100 The big question for me, however, is which high yield will be the most sustainable. Today I’m looking at three that I think have staying power.
remains stubbornly strong on consumer demand Imperial Marks (LSE: IMB), despite efforts to reduce tobacco consumption. The share price has been down for a few years, but has been on an upward trend since mid-2020.
I’m sure most of the decline was due to anti-smoking sentiment. But when it comes to profits, some of the world’s most populous developing countries haven’t really caught on to the anti-smoking thing.
Couple that with the growing popularity of alternative tobacco products in the developed world, and I think I see a recession-proof cash cow. For the year 2021/22, the company has announced a dividend of 6.6%. Analysts expect it to continue to grow in the coming years.
The biggest risk is certainly the growing aversion to tobacco, which I hope will have an impact one day. But maybe not for a while.
I love insurance stocks. Heading into an economic downturn, I’m looking for strong coverage with decent dividend yield and profit potential. i think i see them both legal and general (LSE:LGEN).
Our share price is down 11% over the last 12 months, although it has been on an upward trend since October.
Today’s price puts the stock at an estimated dividend yield of 7.2%. And if the recent data shows, it should be well covered. For the year 2021, we covered 1.85 times earnings. That is good for the sector.
Recession should be the biggest risk right now. I think a few years of economic pain will probably reduce demand for financial services. So we can see pressure on legal and normal dividends. But short-term pain can mean a long-term bargain.
Rio Tinto (LSE: RIO) cut its half-year dividend this year, but I still see long-term sustainability. The Rio share price fell in the second half of 2022. But it is still up 15% over 12 months.
Full-year dividend forecasts still point to a yield of 8.3%. But I think it could be a disappointment to investors hoping to replicate the 12% they paid in 2021.
Rio Tinto, like the industry as a whole, has enjoyed several years of strong earnings growth. But mining and commodities companies are cyclical and forecasts point to weak earnings and dividends for years to come.
Declining demand in China and the global slowdown are part of that. And the biggest risk I see is multiple years of declining dividends. But I think it’s a good time to get into this cyclical business.
i will buy
If I had enough money for all the high yield stocks that I think are good values, I would buy all three today. In the real world they would have to wait for my candidate list for my next purchase.
The post 3 High Yield Dividend Stocks I’d Buy Today appeared first on The Motley Fool UK.
Alan Oscroft has no position in any of the listed stocks. The Motley Fool UK recommends Imperial Brands. Opinions about the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a wide range of insights makes us better investors.
Motley UK 2022