3 interesting dividend stocks to watch

For investors looking for attractive dividend yields outside of the main S&P 500 index, stocks offering a combination of high dividends and solid fundamentals may be of interest. Below, we present three companies that analysts say combine high dividends with long-term growth potential.

Which 3 stocks are they?

CVS Health Corp. $CVS

CVS Health Corporation is a healthcare services giant that combines retail pharmacies with the insurance industry to create a strong ecosystem. The company operates more than 9,900 retail locations, 1,100 medical clinics and serves more than 102 million clients, generating nearly $369 billion in annual revenue.

Recent financial results show the company's resilience and growth. In the third quarter of 2024, CVS reported a 6.3% increase in revenue to $95.4 billion, driven primarily by a 25.5% increase in health benefits revenue. The number of health plan members grew 5.4% to 27.1 million.

CVS's position as one of the largest pharmacy chains in the U.S. gives it significant advantages, such as economies of scale and a strong negotiating position with suppliers. These fundamentals enabled the company to raise its dividend by 10% in December 2023, its third consecutive annual increase. The current dividend yield is 5.4% and with a payout ratio of 45%, the dividend appears to be safely sustainable.

For income-focused investors, CVS is an attractive option in the healthcare sector, combining stability, high yield and long-term growth potential.

Bank OZK $OZK

Bank OZK, formerly known as Bank of the Ozarks, is a regional bank with a proven track record of growth and stability. It is headquartered in Little Rock, Arkansas and offers banking services in states such as Florida, Texas and California.

The bank regularly exceeds expectations and has posted record profits for the past eight quarters. In the third quarter of 2024, net interest income grew 6% and earnings per share reached a record $1.55. Bank OZK's ability to manage challenges, such as rising deposit costs, demonstrates strong operating quality.

Bank OZK has an impressive history of dividend growth, with regular dividend increases over the past 57 quarters. The most recent increase in October 2024 yielded a quarterly dividend of $0.41 per share, a 10.8% increase year-over-year. The current dividend yield is 3.5% and the bank has good prospects for further growth.

For investors looking for opportunities in the banking sector, Bank OZK is an interesting choice due to its financial strength and consistent shareholder returns.

NACCO Industries $NC

NACCO Industries is a holding company that focuses on coal mining. While the industry faces long-term challenges, NACCO has secured its position as the largest lignite coal producer in the U.S. and provides services to energy companies in several states.

In the third quarter of 2024, results were mixed, with revenue down 4.5% to $46.5 million, but earnings per share improved significantly to $2.14 from a loss in the prior year. A positive point was the 54% growth in mineral management revenue, indicating efforts to diversify outside of traditional coal mining.

The company sees growth opportunities in the Thacker Pass lithium project, where production is expected to begin in 2027. This project shows a gradual focus on supporting renewable technologies.

NACCO boasts a 39-year history of uninterrupted dividend growth, which is remarkable given the cyclical nature of the mining industry. The current dividend yield is 3%. While this yield is lower than the other stocks mentioned, the potential for long-term growth and diversification may appeal to investors with a greater tolerance for risk.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.

Source: TheStreetPro