![]() There’s reason to think this won’t be the last cash injection investors see, either. The group’s most recent buyback scheme is expected to reach $90bn. The group has a history of sending that cash straight back to investors, boosting share prices, and increasing ownership for those who continue to hold shares. Apple’s business is a sprawling cash cow, meaning management often has a surplus of excess cash that can’t be effectively reinvested into the business. However, the latter part of that phrase makes the tech giant a candidate. With a yield of less than 1%, Apple (NASDAQ: AAPL) doesn’t often make the list of top dividend and buyback stocks. Ultimately broadband is a must-have these days, meaning even as times get tougher, consumers will continue to pay to stay connected, so Verizon’s in a strong position to weather an oncoming economic storm. Its dividend payout is relatively high at 71%, but there’s still some breathing room, particularly if things pick up. Now that the largest outlay for 5G is behind us, Verizon should start gaining momentum. The group’s one of the world’s largest telecoms, and its model is strong- after the initial outlay to set up infrastructure, each new customer is virtually cost-less to add. However, there’s a lot to like about Verizon. Plus, the group’s had to shell out to update its 5G network, an expensive endeavor thanks to pricey spectrum licenses. Nowadays, it’s difficult to distinguish your mobile offering, and customer switching costs are low, so wireless companies compete mostly on price, eroding margins. That reflects the market’s concern about Verizon’s ability to compete in the mobile market. ![]() Some of this is due to a 30% share price decline over the past year. Verizon (NYSE: VZ) is no exception, with a dividend yield of over 7%. However, Pfizer has a strong history of successful drug development, so this could be a suitable entry point.Īnother sector to find stocks for long-term dividends and any buybacks is communications. Pfizer stock is lowly valued compared to some of its Pharma peers, reflecting uncertainty about the group’s ability to push out new drugs to plug the gap left by falling vaccine sales. The group’s payout ratio is less than 50%, which means there should be plenty of wiggle room as management copes with the more challenging environment ahead. The group pays out a dividend yield just shy of 4.5%, making it a good choice for income investors. This investment has set the group up to navigate difficult waters ahead as some of its blockbuster drugs lose their patent protection. But the group put the cash to good use, beefing up investment in research & development. The group benefitted from an enormous cash windfall from vaccine sales, which have now dropped off a cliff with the pandemic behind us. Thanks to its early vaccine candidate, pharmaceutical giant Pfizer (NYSE: PFE) was a huge winner during the pandemic. The pharmaceutical sector is a good place to find some of the top stocks for dividends and buybacks. It means shareholders automatically own a larger chunk of the company. Buying back shares reduces the number on the market, often leading to a bump in the share price as a result. Whereas companies have to cut their dividend if times are tight, buyback programs offer a way to return excess cash to shareholders on a one-off basis. The latter offers a bit more flexibility. Both dividends and buybacks are ways that companies return cash to shareholders. Investors can also look at cash flow compared to dividend payouts to understand how difficult it is for a particular company to cover or increase its dividend payments.įinally, income investors may want to consider the top stocks for dividends and buybacks. A number greater than 1 means the company pays investors more than it makes, suggesting those dividend payments are unsustainable. The first is to look at the payout ratio, which compares a company’s dividend payouts with its net income. There are a few ways to work out whether a company’s got the financial fortitude to continue paying and expanding its dividend. Dividends aren’t guaranteed and are often the first thing to hit the chopping block when financial trouble strikes. Typically, a low share price reflects low confidence in the market and could suggest the company’s financials aren’t strong enough to cover its expected payouts. Second, it can be artificially inflated by a low share price. First, it’s backward-looking- so it measures the previous dividend payments against the current share price. It offers a touchpoint for investors, but it’s an imperfect measure. ![]() This tells you the percentage of that company’s share price paid out in dividends. The obvious starting point to locate these types of investments is by looking at yield. Income investors often search for stocks for long-term dividends and buybacks to round out their portfolios.
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