3 highly rated dividend stocks you probably haven’t heard of (but)

When it comes to dividend investments, choosing the right stock often means choosing the largest, most consistent, safest and most popular companies in their respective fields. I’m talking about Coca Colas and Abbott around the world – the name that has a balance sheet, brand strength, operational foundation, and where we pay (and increase) dividends while weathering the economic storm.

However, more adventurous income investors may want to explore high-risk stocks that are often overlooked. Small businesses are not common names or industry leaders, but they may offer consistent yields at a more attractive level. However, such stocks can be hits or misses unless you are looking for the best stock that meets the right criteria.

So, today, let’s find a lesser-known, wall-approved dividend stock that offers consistent payments and the best yield.

I added the following filters using Barchart’s Stock Screener tool:

Number of Analysts: 8-12. The final list will be limited to the inventory that Wall Street covers, but not overly. The 8-12 range is best for that situation.
Current Analyst Rating: 4.5-5 (strong purchase). We want to improve the chances of only the best and best on this list to succeed.
Dividend Payment Rate: 25% to 60%. Dividend payment rates are part of the company’s revenue used to pay dividends. The 25% to 60% range represents a reasonable balance between relatively high yields and ample funds to support business growth and improvement. This is something long-term investors would appreciate.
Market Cap: $3 billion to $10 billion. This filter restricts searches to mid-season corporations. This is often ignored on top dividend stock lists.
Annual dividend yield: Over 0.01%.

Once I placed the filter in place I ran the screen and got the following results:

13 companies were obtained on the screen. From there, we placed the results in order of the highest TTM dividend yield to lowest, then checked the dividends above for dividend consistency. Thankfully, the top 3 had regular dividend payments, so I chose to discuss all of them today.

I’ve previously featured Rithm Capital in my “Best Recovery Stocks” analysis and I’m happy to say it retains its title. REIT provides U.S. mortgage services, asset management and outbound delivery. Its subsidiaries include NewRez, Genesis Capital, Guardian Asset Management, Greenbard and Sculptor, rounding out their vast investment platform across a variety of companies. RITHM Capital has been offering a stable quarterly dividend of 25 cents per share since 2021. This leads to an annual fee of $1.00 and an 8.9% yield. Based on a dividend payout rate of 43.01%, the company has sufficient funds to continue its dividend.

The RITM stock has an impressive average analyst score of 4.80, showing a strong purchase rating based on 10 individual analyst reviews. It is also well below pre-pandemic price levels. This can grow significantly upon full recovery.

Next on the list is Copa Holdings, a holding company for South American airlines that operate the Copa Airlines, Aerorepublica and Wingo brands. The company offers approximately 375 flights daily to 32 countries across all businesses. It is one of the top airlines in Latin America, and cheaper products via Wingo have become an attractive option for budget-conscious travelers.

According to the latest finances, Copa pays a quarterly dividend of $1.61, which is equivalent to $6.44 per share per year, converting it to a high yield of 6.02%. The company has a relatively safe payout rate of 43.98%, one of the highest analyst scores we’ve seen recently – 4.91 based on 10 reviews, and an attractive, high target price of $190.

Last but not least, it’s Nexstar Media Group, one of the largest local television broadcasting groups in the United States. The company has a TV station presence in almost every US state, and also owns the CW Network, the fifth largest broadcast network in the country and one of the most prolific networks in terms of scripted television content for younger audiences. I would like to wager the top dollar that I have heard or seen from the CW in the US actually reading this.

Nexstar Media Group pays $1.86 per quarter. This leads to an annual yield of $7.44 per year and 4.46%. NXST stocks also maintain a strong purchase rating with an average score of 4.75.

I firmly believe that income investors should have some of the top dividend stocks from the list of dividend kings and nobles such as KO, ABT, JNJ, PEP, etc., but there are no strict rules for investing in smaller dividend stocks with attractive yields. That said, small businesses tend to be at a higher risk of experiencing significant price fluctuations.

But if you’re lucky, you might snag a high-yield dividend stock while you’re heading for Megacap status.

On the date of publication, Rick Orford had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published barchart.com

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