Investing, Stocks

High Yield Dividend Champions That Will Boost You Portfolios Defense!

Written By: Lyster Rosales
Reviewed by: Mike Reyes
Last Updated May 16, 2023

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The Bureau of Labor Statistis has just released the April CPI report and it mostly falls in line with analysts’ expectations. This gives investors a hint that things will still be the same for the next few months. According to Sarah House, senior economist at Wells Fargo Economics, “We expect the FOMC to maintain the federal funds rate at its current level for the foreseeable future and for inflation to slow further in the months ahead as supply pressures continue to ease and demand growth weakens.” Should things continue in line with the experts’ expectations, investors may be in for a long defensive approach to their investment strategy. When talking about defensive strategies, one of the best ways to fight back against high inflation and potential rate increases is to focus on quality companies that give dividends.

In the world of dividend investing, investors can choose to look at different kinds of dividend stocks that dividend and income investors follow. There are different varieties of classes for dividend stocks that have been accepted throughout the years. There are Dividend Kings (stocks that continuously increased dividends for at least 50 years) and Dividend Aristocrats (S&P500 stocks that continuously increased dividends for at least 25). However, with a more stringent list of classifications, the lesser the pool of companies an investor’s investable universe becomes. 

If an investor wants a pool of stocks that has the minimum dividend growth requirement as a Dividend Aristocrat but is not restricted to S&P500 stocks only, then let me introduce Dividend Champions.

What Is a Dividend Champion?

Dividend Champions have increased their dividend payouts for at least 25 consecutive years. It is similar to Dividend Aristocrats, but with a wider pool of choices that are not bound to S&P500 constituents. Stocks belonging to these groups are highly regard by investors due to their ability to provide their investors with a consistent way to generate a growing income via dividends from their investments beyond the usual capital appreciation. In this article, we will look at three high-yielding dividend stocks that belong in the category called Dividend Champions. 

Telephone and Data Systems, Inc.(TDS)

TDS stock overview

Dividend Yield: 10.29%

Telephone and Data Systems, Inc. is a diversified telecommunications company that provides wireless, cable, and wireline broadband, video, and voice, and hosted and managed services through its businesses UScellular, TDS Telecom, OneNeck IT Solutions, and BendBroadband. The company focuses on 2 business segments:

  • TDS Telecom – provides wireless telecommunications services as well as a range of broadband, video, and voice communications. This segment also operates and invests in communications services in a mix of rural and suburban communities throughout the United States
  • UScellular – accessories, including wireless essentials such as cases, screen protectors, chargers, memory cards, and consumer electronics such as audio, home automation, and networking products. 

TDS Dividend yield is a whopping 10.29%, which is rare for most dividend stocks. The company is expected to announce its next dividend in the 3rd week of May, based on its historical announcements. The company has continuously increased its dividends for 49 years.

Analyst Rating

TDS analyst hold rating

Analysts are rating TDS as a “Hold” rating based on 4 analysts. The mean price target is for TDS $15,00 with a high estimate of $16.00, an upside of 123.15%. The company has been 

Altria Group, Inc. (MO)

mo stock overview

Dividend Yield: 8.1%

Altria Group is an international tobacco company with a market capitalization of $84.41 billion. 

Founded in 1902 and headquartered in Richmond, Virginia, United States, the company employs over 6,300 people. Its popular brands include Marlboro, Chesterfield, and L&M.

Altria Group primarily sells oral tobacco products and smokeable products. Among its accessories are cigarettes made and sold by Philip Morris USA Inc. and machine-made cigars and pipe tobacco by John Middleton Co. Altria Group Distribution Company, Helix Inventions LLC, Philip Morris Capital Corporation, and Altria Client Services LLC are further add-ons. The business offers deals and distribution services, support services, and a variety of financial tools.

Altria Group has an annual dividend yield of 8.1 %. The company is expected to make its next dividend announcement in the 3rd week of May. The company has been increasing its dividends for 53 straight years.

Analyst Rating

mo analyst buy rating

Altria is being rated by  12 analysts as a “Buy”. The mean target price for MO is $48.90 with a high estimate of $53.00, an upside of 15.32%. 

Enterprise Products Partners L.P. (EPD)

epd stock overview

Dividend Yield: 7.68%

Enterprise Products Partners L.P. is a company that provides midstream energy services to consumers and producers of natural gas, crude oil, natural gas liquids (NGLs),  petrochemicals, and refined products. The Company operates in four main segments:

NGL Pipelines & Services – this includes its natural gas processing and related NGL marketing activities, NGL fractionation facilities, NGL pipelines, NGL and related product storage facilities, and NGL marine terminals.

Crude Oil Pipelines & Services – includes its crude oil pipelines, crude oil storage, marine terminals, and related crude oil marketing activities. 

Natural Gas Pipelines & Services –  includes its natural gas pipeline systems that provide for the gathering, treating, and transportation of natural gas.

Petrochemical & Refined Products Services – propylene production facilities, butane isomerization complex, and others.

EPD has an annual dividend yield of 7.68% and is expected to announce its next dividend in the first week of July. The company has continuously increased its dividend for the last 26 years.

Analyst Rating

edp analyst strong buy rating

Analysts rated EPD as a Strong Buy based on 16 analyst recommendations. The mean price target is $32 with a high estimate of $35, an upside of 35.92%.

Final Thoughts

Investing in companies that fall in a certain theme has been one of the strategies investors follow. As markets tend to rotate into different sectors and themes depending on market environments, investors tend to start seeing certain groups of stocks do well in certain scenarios. However, investors should always ensure to do their due diligence in making investment decisions. Just because a company is part of an elite list of stock does not mean that there will be no risks involved.

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