Interest rates continue to plunge, and for income investors that count on dividends, these are difficult times. With the distinct possibility that the Federal Reserve will continue to keep rates at record lows for years, the 30-year Treasury bond has fallen to a paltry 1.42% yield. Pretty small for committing capital to an investment for 30 years.
The problem for many income investors is they need higher yields but can’t risk buying junk bonds or highly leveraged closed-end and exchange-traded funds. The answer may be to look back to the equity markets, where some under-the-radar stocks have paid consistent, dependable long-term dividends for years and have been hammered.
We screened our 24/7 Wall St. research database and found five companies that all pay at least a 6% dividend and offer a reasonable degree of safety. While not intended to replace guaranteed issues like Treasury bonds or certificates of deposit, they make sense for those seeking investment income who have a slightly higher risk tolerance. While all five are rated Buy across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This off-the-radar idea is ideal for investors that are more conservative. B&G Foods Inc. (NYSE: BGS) manufactures, sells and distributes a portfolio of shelf-stable and frozen foods in the United States, Canada and Puerto Rico. Its products include frozen and canned vegetables, oatmeal and hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegars, maple syrups, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, puffed corn and rice snacks, cookies and crackers, and other specialty products.
The company markets its products under various brands, including B&G, B&M, Back to Nature, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Durkee, Emeril’s, Grandma’s Molasses, Green Giant, Joan of Arc, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Flatbreads, New York Style, Old London, Ortega, Polaner, Red Devil, Regina, Sa-són, Sclafani, Smart Puffs, SnackWell’s, Spice Islands, Spring Tree, Static Guard, Sugar Twin, Tone’s, Trappey’s, TrueNorth, Underwood, Vermont Maid, Victoria, Weber and Wright’s.
B&G Foods has handed out a dividend for 63 consecutive quarters since the company’s stock went public in 2004, and it has increased that dividend for 10 consecutive years.
Holders B&G Foods stock are served up a delicious 7.18% dividend. The Piper Sandler price target on the shares of $28 compares with the Wall Street consensus target of $29.33 and the closing price on Friday of $26.47.
Bank of Nova Scotia
Investors have to travel to the Great White North for this solid financial stock. Bank of Nova Scotia (NYSE: BNS) is the third-largest Canadian bank by market capitalization and the most international of the Canadian banks. In recent years, the bank has begun to consolidate operations, focusing more on Latin American countries, primarily Peru, Mexico, Chile and Colombia, and less on Asia and the Caribbean.
The company offers financial advice and solutions and day-to-day banking products, including debit and credit cards, checking and saving accounts, investments, mortgages, loans and related creditor insurance to individuals and small businesses. It offers commercial banking solutions including lending, deposit, cash management and trade finance solutions to medium and large businesses, including automotive dealers and their customers.
Bank of Nova Scotia is also involved in the provision of investment and wealth management advice, services, products and solutions to customers and advisors; wealth management solutions, such as private customer, online brokerage, full-service brokerage, pension and institutional customer services, as well as asset management business focusing on developing investment solutions for retail and institutional investors; and international banking services for retail, corporate and commercial customers.
Shareholders receive a 6.54% dividend. TD Securities has a $65 price target, which is lower than the posted consensus target of $72.27. On Friday, the final Bank of Nova Scotia stock trade came in at $41.99 per share.