7 Dividend Stocks at Historically High Yields

AI-generated source summary

The analysis focuses on identifying dividend stocks that are trading at historically cheap valuations based on their dividend yields relative to their past performance. Stocks like Accenture (ACN), Nike (NIKE), PepsiCo (PEP), McDonald's (MCD), McCormick & Company (MKC), Lowe's Companies (LOW), and Procter & Gamble (PG) are highlighted. The primary thesis is that stocks with dividend yields in the top percentiles of their historical range present a "deep value" opportunity. For example, Accenture's yield is at the 95th percentile of its 5-year range, while Nike is at the 99th percentile of its 10-year range. McDonald's is noted for its consistently high dividend growth, and Coca-Cola (KO) is mentioned as a dividend king with a consistently high yield. The analysis also touches upon the sustainability of these dividends through free cash flow and earnings payout ratios, indicating that most are in sustainable ranges, though some, like PepsiCo's FCF payout ratio at 99.8%, warrant attention. The general trend observed across many of these stocks is a recent increase in dividend yield, driven partly by stock price declines, which, when combined with consistent dividend growth, makes them attractive entry points. The analyst suggests that these stocks are not overvalued and offer potential upside based on their historical performance and dividend payouts.

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