Investing

5 Mid-Cap Stocks That Also Pay The Highest Dividends

Lee Jackson

Published: February 16, 2024 12:10 pm

Investors love dividend stocks because they provide dependable income and give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

We decided to screen the U.S. Mid Cap stocks, which are companies with a market capitalization between $2 billion and $10 billion, looking for those that pay investors the biggest dividends. As the name suggests, a mid-cap company falls between large-cap and small-cap companies.

Five stocks that are all rated Buy on Wall Street made the cut, and all look like solid ideas for growth and income investors looking to add Mid-Cap shares with big dividends to their portfolios.

Leggett & Platt

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While somewhat off-the-radar, this stock has been cut in half over the last year, offering massive upside potential and a fat 9.14% dividend. Leggett & Platt Incorporated (NYSE: LEG) designs, manufactures, and markets engineered components and products worldwide.

It operates through three segments:

• Bedding Products
• Specialized Products, and Furniture
• Flooring & Textile Products

The company offers:

• Steel rods
• Drawn wires
• Foam chemicals and additives
• Innerspring
• Specialty foams
• Private label finished mattresses
• Mattress foundations
• Wire forms for mattress foundations
• Adjustable beds
• Industrial sewing and quilting machines
• Mattress packaging and glue drying equipment

The company also makes machines to produce innerspring for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores, and home improvement centers.

Leggett & Platt also provides:

• Mechanical and pneumatic lumbar support and massage systems for automotive seating
• Seat suspension systems, motors and actuators, and cables
• Titanium, nickel, and stainless-steel tubing,
• Formed tubes, tube assemblies, and flexible joint components for fluid conveyance systems
• Engineered hydraulic cylinders to automobile OEMs and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs.

Vector Group

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This relatively unknown company pays a hefty 7.83% dividend and has huge upside potential. Vector Group Ltd. (NYSE: VGR), manufactures and sells cigarettes in the United States through its subsidiaries.

It operates in two segments:

• Tobacco
• Real Estate.

The company produces cigarettes under these brand names:

• EAGLE 20s
• Pyramid
• Montego
• Grand Prix
• Liggett Select
• Eve
• USA
• Various partner and private label brands

It markets and sells its cigarettes to wholesalers and distributors of tobacco and convenience products and grocery, drug, and convenience store chains.

Vector Group also engages in real estate investment and operates apartment buildings, hotels, and commercial real estate ventures.

Spire

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Trading just above a 52-week low and paying a solid 5.23% dividend, this could be a total return home run. Spire Inc. (NYSE: SR) engages in the purchase, retail distribution, and sale of natural gas to residential, commercial, industrial, and other end-users of natural gas in the United States.

The company operates through three segments:

• Gas Utility,
• Gas Marketing
• Midstream.

It is also involved in the marketing of natural gas and related services; and transportation and storage of natural gas.

In addition, the company operates propane through its propane pipeline, risk management, and other activities.

Federal Realty Investment Trust

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While real estate has been hit strongly, hard assets are good in inflation, and this stock pays a solid 4.35% dividend. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation, and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C., to Boston, San Francisco, and Los Angeles.

Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply.

Its expertise includes creating urban, mixed-use neighborhoods like:

• Santana Row in San Jose, California,
• Pike & Rose in North Bethesda, Maryland
• Assembly Row in Somerville, Massachusetts

Federal Realty’s 102 properties include approximately 3,300 26 million square feet tenants and over 3,100 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry.

National Fuel Gas

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This is another off-the-radar company that pays a dependable 4.21% dividend and looks cheap at current trading levels. National Fuel Gas Company (NYSE: NFG) is a diversified energy company.

It operates through four segments:

• Exploration and Production
• Pipeline and Storage
• Gathering
• Utility

The Exploration and Production segment explores for, develops, and produces natural gas and oil.

The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York and owns and operates underground natural gas storage fields.

This segment also transports natural gas for the National Fuel Gas Distribution Corporation and other utilities, industrial companies, and power producers in New York State.

The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region and provides gathering services to Seneca.

The Utility segment sells natural gas or provides natural gas utility services to various customers in:

• Buffalo
• Niagara Falls
• Jamestown
• Erie and Sharon, Pennsylvania