These 2 Dividend Elites Are Beating Their Own Sector Indices!
Let's face it. This market has been tough. Indeed, the quest for profit has always been a long and difficult task. It's hard to predict which stock will give the maximum upside with low risk. That’s why some investors focus on stocks that outperform their sector indices and provide dividends. By choosing stocks that outperform their sector, investors can potentially benefit from higher returns as they outperform its sector peers. That's why we like to focus on quality dividend stocks.
Dividends offer investors a sense of security through a stable cash flow that can also be a hedge against inflation. By focusing on quality companies, investors can end up with a diversified portfolio of stocks that pay dividends with a higher potential for capital appreciation.
In this article, let's look at two dividend aristocrats outperforming their S&P sector indices.
West Pharmaceutical Services (WST)
WST YTD Performance: 37.41%
S&P500 Health Care Sector YTD Performance($SRHC):-5.24%
West Pharmaceutical Services, Inc. is an American manufacturer of integrated containment and delivery solutions for injectable medicines. The company was founded in 1923 by J.R. Wike and Herman O. West. Currently, the company is headquartered in Exton, Pennsylvania, U.S. Additionally, the company employs over 13,000 employees.
The company offers various pharmaceutical products and services, such as:Vial Containment, Solutions,Prefillable Syringe Systems,Self-Injection Devices,Cartridge Systems and Components,Specialty Components,Analytical Services,Quality Enhancements,Contract Manufacturing,Vial Adapter Systems, and Integrated Solutions.
West Pharmaceutical Services stock has an annual dividend yield is 0.23% and a 5-year dividend growth rate of 37.74%. The company recently announced its next dividend on May 3, 2023, for $0.19 per common share. WST has continuously increased its dividends for 30 straight years and is a part of the Dividend Aristocrats.
Analyst Recommendations
Analysts rate West Pharmaceutical Services a “Moderate Buy” rating based on 5 Strong Buys, 4 Moderate Buys, 3 Holds, 2 Moderate Sells, and 1 Strong sell from analysts. WST’s mean target price is $300.83, with a high target of $375.00, an upside of 15.95% based on its last trading price.
Nucor Corp (NUE)
NUE YTD Performance: 33.18%
S&P 500 Materials Sector YTD Performance($SRMA):6.86%
Nucor Corporation (NUE) is a diversified manufacturing company that sells steel and steel products. Currently, it is the largest steel manufacturer in the United States. Nucor is also the biggest recycler in North America, creating steel and steel-related products by utilizing scrap steel as the primary raw material. The company was founded in 1940. Its headquarters are in Charlotte, North Carolina, the United States.
The company is mainly divided into three segments:
The steel mills segment produces sheet, structural, and bar steel. This segment primarily offers these products to steel service centers, fabricators, and manufacturers in Mexico, the United States, and Canada.
The steel products segment produces and sells steel tubing, electrical conduits, deck, fasteners, metal building systems, and steel wire.
The raw materials segment produces DRI and various metals, such as crude iron and HBI. It also supplies ferro-alloys and processes scrap metal. Additionally, it offers natural gas drilling services.
Nucor also has many independent subsidiaries, such as Nucor Steels, Duferdofin, Nucor Cold Finish, Nucor Skyline, etc., to name a few. Today, the company has over 31,400 active employees.
Nucor Corp’s stock features an annual dividend yield of 1.14% and has a 5-year dividend growth rate of 33.11%. The company recently announced its next dividend to be paid on May 11, 2023, for $0.51. NUE has continuously increased its dividends for 50 years and is a newcomer to the elite Dividend Kings list.
Analyst Recommendations
Analysts rate Nucor Corp a “Moderate Buy” rating based on 5 Strong Buys, 4 Moderate Buys, 3 Holds, 2 Moderate Sells, and 1 Strong Sell from analysts. NUE’s mean target price is $157.67 with a high target of $190.00 - representing an upside of 8.24% based on its last trading price.
Final Thoughts
Focusing on stocks that outperform their sector indices and provide dividends can be a good strategy for getting exposure in different sectors. However, investors should always remember that outperformance never guarantees future returns. Investors should still look at company financials and company details before making any investments because there are still risks in the market even with the potential growth and income from dividends. With these companies outperforming their sectors, the only question is, is now the time to buy?
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On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
Provided Content: Content provided by Barchart. The Globe and Mail was not involved, and material was not reviewed prior to publication.
