Since the beginning of the year, the major market indexes have faced intense selling pressure due to in large measure to the Federal Reserve’s tightening monetary policy to control high inflation, rising energy and commodity prices, supply disruptions arising from the Russian-Ukraine war, and the potential for the economy to slip into recession.
A stronger-than-expected jobs report is not expected to revive investor sentiment because it may bolster the Fed’s commitment to its hawkish stance. According to the labor department, the U.S. economy added 390,000 jobs in May, which was better than the 328,000 estimated by Dow Jones. The benchmark 10-year Treasury yield also climbed above the 2.96% level after the report.
Since the stock market is expected to remain highly volatile in the coming months on concerns over the lingering issues, it could be wise to bet on high-dividend stocks from ZIM Integrated Shipping Services Ltd. (ZIM), Western Midstream Partners, LP (WES), Stellantis N.V. (STLA), and Turkcell Iletisim Hizmetleri A.S. (TKC) to generate a steady income stream.
ZIM Integrated Shipping Services Ltd. (ZIM)
Headquartered in Haifa, Israel, ZIM provides international container shipping and related services. The company offers seaborne transportation and logistics services. It operates a fleet of 118 vessels, including 110 container vessels and eight vehicle transport vessels, of which four vessels are owned by it and 114 vessels are chartered.
On March 30, 2022, ZIM announced a new charter transaction with a group of investors initiated by MPC Capital AG. Eli Glickman, ZIM President & CEO, said, “We continue to advance our strategy of chartering in highly versatile vessels to strengthen our commercial prospects, maintain our flexibility and enhance our position as an innovative provider of seaborne transportation.”
While its four-year average dividend yield is 7.5%, its current dividend translates to a 17.9% yield. Its payout ratio is 46.7%.
ZIM’s revenues increased 210% year-over-year to $3.72 billion for its fiscal first quarter, ended March 31, 2022. The company’s adjusted EBITDA grew 209% year-over-year to $2.53 billion, while its net income came in at $1.71 billion representing a 190% year-over-year increase. Also, its EPS was $14.19, up 190% year-over-year.
For the quarter ending June 30, 2022, analysts expect ZIM’s EPS and revenue to increase 72.8% and 61.9% year-over-year to $12.76 and $12.76 billion, respectively. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has gained 56.8% in price over the past year to close yesterday’s trading session at $66.37.
ZIM’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has an A grade for Value and Quality and a B grade for Momentum. Within the B-rated Shipping industry, ZIM is ranked #5 out of 46 stocks.
To see the additional POWR Ratings for ZIM (Stability, Growth, and Sentiment), click here.
Western Midstream Partners, LP (WES)
WES in The Woodlands, Tex., acquires, owns, develops, and operates midstream assets primarily in the United States. It engages in gathering, compressing, treating, processing, and transporting natural gas. The company manages assets located in Texas, New Mexico, the Rocky Mountains, and North-Central Pennsylvania.
On May 10, 2022, Craig Collins, SVP and COO of WES, said, "We continue to attract incremental volumes from Occidental and third parties due to our superior position in the Delaware Basin, improved cost structure, and commitment to customer service."
While its four-year average dividend yield is 11.1%, its current dividend translates to a 7% yield. Its annual dividend is $2, with a payout ratio of 57.5%.
WES’ revenues increased 12.3% year-over-year to $758.30 million for its fiscal first quarter, ended March 31, 2022. The company’s operating income grew 38.5% year-over-year to $404.82 million, while its net income came in at $317.67 million representing a 66.1% year-over-year increase. Also, its EPS was $0.75, up 70.5% year-over-year.
For its fiscal 2022, analysts expect WES’s EPS to come in at $3.11, representing a 42.7% year-over-year increase. Its revenue is expected to rise 17.9% year-over-year to $803.97 million for the quarter ending June 30, 2022. Over the past six months, the stock has gained 45.9% in price to close yesterday’s trading session at $28.61.
WES’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. It has an A grade for Momentum and Quality and a B grade for Stability and Sentiment.
Click here to access WES’ ratings for Value and Growth as well. WES is ranked #2 of 34 stocks in the A-rated MLPs - Oil & Gas industry.
Stellantis N.V. (STLA)
Based in Hoofddorp, the Netherlands, STLA designs, engineers, manufactures, distributes, and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, and production systems worldwide. It sells its products directly, as well as through distributors and dealers.
On May 30, 2022, STLA and Toyota Motor Europe N.V. announced the expansion of their existing partnership with an agreement for a new large-size commercial van. Carlos Tavares, STLA’s CEO, said, “This agreement strengthens our leadership in the EU30 for LCVs and low emission vehicles and moves us a step closer to realizing our Dare Forward 2030 goal of becoming the undisputed global light commercial vehicle leader, in terms of technology, manufacturing, market share and profitability.”
STLA’s dividend payouts have grown by a 17.3% CAGR over the past three years. While its four-year average dividend yield is 9.2%, its current dividend translates to a 7.3% yield.
STLA’s net revenues increased 12% year-over-year for the quarter ended March 31, 2022. Its shipments declined 12% to 1,347K units.
STLA’s revenue is expected to increase 14.6% year-over-year to $43.66 billion for the quarter ending Sept. 30, 2022. The stock has gained 14.5% in price over the past month to close yesterday’s trading session at $15.34.
STLA’s POWR Ratings reflect solid prospects. The company has an overall B rating, which translates to Buy in our proprietary ratings system. It has an A grade for Value and a B grade for Sentiment.
Click here to see the additional POWR Ratings for STLA (Growth, Momentum, Quality, and Stability). STLA is ranked #8 out of 67 stocks in the Auto & Vehicle Manufacturers industry.
Click here to check out our Automotive Industry Report for 2022
Turkcell Iletisim Hizmetleri A.S. (TKC)
Headquartered in Istanbul, Turkey, TKC provides digital services internationally and operates through Turkcell Turkey and Turkcell International segments. The company offers voice, data, and video communication solutions to its individual and corporate customers, and broadband services.
TKC’s four-year average dividend yield is 6.4%.
TKC’s net revenues increased 36.7% year-over-year to TRY 10.70 billion ($649.19 million) for its fiscal first quarter, ended March 31, 2022. The company’s EBITDA grew 30.1% year-over-year to TRY 4.30 billion ($261.13 million). Also, its EBIT came in at TRY 2.22 billion ($134.57 million), up 34.4% year-over-year.
Analysts expect TKC’s EPS and revenue to increase 19% and 26.7%, respectively, year-over-year to $0.75 and $4.23 billion in its fiscal 2023.
It is no surprise that TKC has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Value and a B grade for Quality.
Click here to see TKC’s ratings for Momentum, Sentiment, Growth, and Stability. TKC is ranked #10 out of 45 stocks in the A-rated Telecom - Foreign industry.
ZIM shares were trading at $67.02 per share on Friday afternoon, up $0.65 (+0.98%). Year-to-date, ZIM has gained 47.15%, versus a -13.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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