The equity markets have been under pressure again after a brief recovery from the market correction in March. Ten-year Treasury yields hit their highest levels since 2018 earlier today, triggering an outflow of funds from the equity markets. Furthermore, persistent inflationary pressures have fueled bearish investor sentiment. The benchmark S&P 500 index has declined 7.7% year-to-date and 1.9% over the past three days, driven by surging market volatility.
Investing in blue-chip stocks with high dividend yields can hedge some of the market’s risks. This is because such multinational companies tend to have solid consumer bases and sufficient cash balances to weather market downturns.
Given this backdrop, we think investors could bet on S&P 500 constituents LyondellBasell Industries N.V. (LYB), Phillips 66 (PSX), Altria Group, Inc. (MO), and Exxon Mobil Corporation (XOM), each with impressive dividend payout histories.
LyondellBasell Industries N.V. (LYB)
LYB is a Netherlands incorporated chemical company operating through six segments: Olefins and Polyolefins-Americas; Olefins and Polyolefins-Europe, Asia, International (O&P-EAI); Intermediates and Derivatives (I&D); Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyolefins, polyethylene products, propylene oxide and its derivatives, oxyfuels, and various compounds and solutions.
On April 12, LYB announced its goal of reducing greenhouse gas emissions, boosting recycling of plastics, and using renewable-based feedstock in its “Future Focused” sustainability report. The company is focused on achieving its circular and sustainable plastics and decarbonization goals in the coming years. Such plans should make LYB appealing to ESG investors.
On February 2, LYB was named in Fortune Magazine’s World’s Most Admired Companies list for the fifth consecutive year. This recognition reflects LYB’s consistently robust performance within the industry.
The company paid a quarterly dividend of $1.13 on March 14, 2022, to its shareholders. LYB pays $4.52 as dividends annually, yielding 4.2% on the current share price.
In its fiscal 2021 (ended Dec. 31, 2021), LYB’s sales and other operating revenues increased 66.4% year-over-year to $46.17 billion. Its net income increased 293.6% from its year-ago value to $5.62 billion, while its EBITDA grew 164.5% year-over-year to $8.69 billion. The company’s EPS came in at $16.75, representing a 295% year-over-year improvement.
For its fiscal first quarter (ended March 31, 2022), LYB’s EPS and revenue are expected to increase 10.6% and 38.7%, respectively, year-over-year to $3.54 and $12.60 billion. The stock has gained 16.6% in price year-to-date to close the last trading session at $107.58.
Under the POWR Ratings, LYB has an A grade for Value. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. The stock is ranked #40 of 89 stocks in the A-rated Chemicals industry.
Click here to see the other ratings of LYB for Growth, Momentum, Stability Sentiment, and Quality.
Phillips 66 (PSX)
PSX in Houston, Tex., is a diversified energy manufacturing and logistics company. It operates through four segments: Midstream; Chemicals; Refining; and Marketing and Specialties (M&S). The company’s segments transport and stores crude oil, natural gas liquids, and refined petroleum product; produces and markets ethylene and other olefin products and various specialty chemical products; refines crude oil and other feedstocks into petroleum products; and markets refined petroleum and specialty products in the United States and Europe.
On March 22, PSX announced its plans to pursue lower-carbon hydrogen to refuel industrial heaters at Humber Refinery. This project should reduce onsite CO2 emissions, in line with the U.K. government’s carbon neutrality goals.
On March 9, PSX acquired Phillips 66 Partners (PSXP). This acquisition should simplify governance and strengthen the company’s corporate structure.
On March 1, PSX paid its quarterly dividend of $0.92 per share on the common stock for its fiscal fourth quarter. PSX pays $3.68 as dividends annually, yielding 4.4% on its current share price.
PSX’s earnings increased 336.2% year-over-year to $1.27 billion in its fiscal fourth quarter (ended Dec. 31, 2021). Its adjusted earnings grew 356% from its year-ago value to $1.30 million, while earnings per share of common stock increased 353.4% from its e year-ago value to $2.94.
The $1.46 consensus EPS estimate for its fiscal first quarter (ended March 31, 2022) represents a 225.9% improvement year-over-year. The $34.11 billion consensus revenue estimate for its about-to-be-reported quarter represents a 55.6% increase from the same period last year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters. PSX has gained 14.3% year-to-date.
PSX’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system.
PSX has a B grade for Growth and Momentum. Within the Energy - Oil & Gas industry, it is ranked #35 of 96 stocks.
To see additional POWR Ratings for Value, Stability, Sentiment, and Quality for PSX, click here.
Altria Group, Inc. (MO)
MO in Richmond, Va., manufactures and sells smokable and oral tobacco products in the United States. It offers its products under six brands: Marlboro, Black & Mild, Copenhagen, Skoal, Red Seal, and Husky to wholesalers, distributors, and chain stores.
On April 5, MO signed a virtual power purchase agreement (VPPA) for energy produced by Inertia Wind Energy Center. This should accelerate its progress towards its goal of achieving 100% renewable electricity and reducing operational greenhouse gases emissions by 55% by 2030.
On February 10, the company was named on CDP’s 2021 Supplier Engagement Leaderboard for climate change, thanks to its sustainable supply chain management protocols.
On February 25, MO declared a quarterly dividend of $0.90 per share, payable on April 29, 2022. The company pays $3.60 as dividends annually, yielding 6.6% on its current share price.
During its fiscal year 2021 fourth quarter (ended Dec. 31, 2021), MO’s operating income increased 5.9% year-over-year to $2.73 billion. Its gross profit rose 5.4% from its year-ago value to $3.32 billion. Its adjusted net earnings grew 8.3% from the same period last year to $1.99 billion, while its adjusted EPS came in at $1.09, representing a 10.1% increase year-over-year.
Analysts expect MO’s EPS to increase 1.9% year-over-year to $1.09 in its fiscal first quarter (ended March 31, 2022). It surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 16% in price year-to-date to close the last trading session at $54.98.
MO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. MO also has an A grade for Quality and a B grade for Growth. The stock is ranked #3 of 10 stocks in the Tobacco industry.
Click here to see the other ratings of MO for Value, Momentum, Stability, and Sentiment.
Exxon Mobil Corporation (XOM)
XOM explores and produces crude oil and natural gas. It also manufactures, trades, transports, and sells crude oil, natural gas, petroleum products, petrochemicals, and specialty products. The Irving, Tex.-based concern operates through three segments: Upstream; Downstream; and Chemical.
On April 4, the company made a final investment in its Yellowtail development offshore Guyana. This project is expected to produce approximately 250,000 barrels per day beginning in 2025. Given the increased demand for oil globally, this investment is expected to significantly boost XOM’s revenues and profit margins.
On March 1, XOM announced its plans to build a hydrogen production plant, carbon capture, and storage projects at Baytown. This expansion reflects the company’s decarbonization efforts.
On February 25, XOM expanded its carbon capture and storage at its LaBarge facility. This expansion is expected to increase annual carbon capture by approximately 1.2 million metric tons, reducing its total carbon footprint.
XOM pays $3.52 as dividends annually, yielding 4% on its current share price.
In the third quarter ended Dec. 31, 2021, XOM’s total revenues and other income increased 82.6% year-over-year to $84.97 billion. Its net income improved 144.2% from its year-ago value to $8.87 billion, while its earnings per common share came in at $2.08, representing a 144.3% year-over-year improvement.
Analysts expect XOM’s revenue for its fiscal first quarter (ended March 31, 2022) to be $81.29 billion, representing 37.4% year-over-year growth. The Street expects the company’s EPS to increase 235% year-over-year to $2.18 in the about-to-be-reported quarter. It has surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent. Over the past year, the stock has gained 55% in price to close the last trading session at $87.83.
The company has an overall B rating, which equates to Buy in our POWR Ratings system. XOM also has an A grade for Momentum and a B grade for Growth and Quality. Among the 96 stocks in the Energy - Oil & Gas industry, it is ranked #36.
Click here to see the additional POWR Ratings for XOM (Value, Stability, and Sentiment).
LYB shares were trading at $108.72 per share on Monday afternoon, up $1.14 (+1.06%). Year-to-date, LYB has gained 19.23%, versus a -7.30% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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