Top high yield dividend-paying stocks to explore in October

Highlights

  • Navient Corporation (NASDAQ: NAVI) provides education loan and business processing services. It has a P/E ratio of 3.84 and a dividend yield of 2.86%.
  • H&R Block, Inc. (NYSE: HRB) provides income tax return services like do-it-yourself solutions. Its dividend yield is 4.29%, with an annualized dividend of US$1.08.

  • Prospect Capital Corporation’s (NASDAQ: PSEC) dividend yield is 9.33%, with an annualized dividend of US$0.72. The stock gave nearly 54% return YTD.

Dividend-paying companies are considered reliable, especially those paying dividends for a long time. Therefore, they are a passive source of income for investors who do not have time or interest in intraday trading. Here we discuss five dividend stocks that have paid more than 3% dividend, with a dividend payout ratio of less than 50%, meaning that they hold 50% for other activities. In addition, their stocks price rose more than 40 percent YTD.

Let us have a look at them.

Navient Corporation (NASDAQ: NAVI)

Navient Corp is a financial services company that provides education loan and business processing services to the government, and education and healthcare sectors.

The Wilmington, Delaware-based finance company has a market capitalization of US$3.29 billion and a P/E ratio of 3.84, with a forward P/E for one year of 4.51.

Its dividend yield is 2.86%, and its annualized dividend is US$0.64.

Its revenue for the second quarter ended June 30, 2021, was US$836 million, and the net income was US$185 million. The cash and cash equivalents were US$1.77 billion as of June 30, 2021, compared to US$1.47 billion as of December 31, 2020.

It had over 3600 employees at the end of the second quarter.

The stock closed at US$19.24 on Sep 29. It gave a 101.5% return YTD.

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Top dividend stocks: Navient Corporation (NASDAQ: NAVI), H&R Block, Inc. (NYSE: HRB), Prospect Capital Corporation (NASDAQ: PSEC), and Kimco Realty Corporation (NYSE: KIM) )

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H&R Block, Inc. (NYSE: HRB)

The company provides income tax return services like do-it-yourself solutions to clients in the US, Canada, and Australia.

The Kansas City, Missouri-based company’s market capitalization is US$4.47 billion. It has a P/E ratio of 6.3, and the forward P/E for one year is 9.03. In addition, the company has been paying an annual dividend of US$1.08, with a dividend yield of 4.29%.

For the fiscal year ended April 30, 2021, the company reported filing 21.6 million US tax returns. It operated 9,271 offices across the US in FY 2021, along with its franchisees.

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The total revenue was US$3.4 billion, and the net income was US$583.8 million for the fiscal year 2021. The cash and cash equivalents were US$1.06 billion as of April 30, 2021, compared to US$2.87 billion as of April 30 FY 2020.

The company also increased its quarterly dividend to 0.27 percent, a 4% increase. It was the fifth increase in six years, making a 35% increase in the period.

The stock gained around 64% YTD based on the closing price of US$25.2 on Sep 29.

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Prospect Capital Corporation (NASDAQ: PSEC)

Prospect Capital Corp is a closed-end investment company. It invests in debt and equity of private companies for recapitalization, acquisition, and other purposes.

The company is based in New York. Its market capitalization is US$3 billion, the P/E ratio is 3.09, and the forward P/E for one year is 10.81. The dividend yield is 9.33%, with an annualized dividend of US$0.72.

For the fiscal year ended June 30, 2021, the company posted revenue of US$501 million compared to US$475 million in the previous fiscal year. The net income attributable to common shareholders was US$962 million compared to a net loss of US$(16.2) million in FY 2020.

Its cash and cash equivalent were US$63.6 million as of June 30, 2021, increased from US$44.56 million as of June 30, 2020. The stock closed at US$7.78 on Sep 29. It rose nearly 54% YTD.

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Kimco Realty Corporation (NYSE: KIM)

KIM is one of the oldest real estate investment trusts in the US. Its headquarters are situated in Jericho, New York. The trust has a market capitalization of US$12.9 billion. The company’s P/E ratio is 23.38, and the forward P/E for one year is 16.63.

KIM has a dividend yield of 3.19%, with an annualized dividend of US$0.68.

For the three months ended June 30, 2021, KIM posted revenue of US$289 million compared to US$239 million in the same period in the previous year. The net income attributable to the company was US$116.7 million compared to US$747.9 million for the June quarter of 2020.

The cash and cash equivalents were US$230 million as of June 30, 2021, compared to US$202 million as of June 30, 2020. The stock gained 46% YTD. The stock closed at US$21.45 on Sep 29.

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(Dividend stocks, Valley National Bancorp Common Stock (NASDAQ: VLY) )

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Valley National Bancorp (NASDAQ: VLY) 

The New York-based Valley National is a bank holding company. The Valley National Bank is a wholly-owned subsidiary. The company provides commercial, retail, and investment services in the US.

Its market cap is US$5.49 billion, the P/E ratio is 12.59, and the forward P/E for one year is 11.53. The company’s current dividend yield is 3.3%, with an annualized dividend of US$0.44.

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Valley National reported a net income of US$117.3 million for the quarter ended June 30, 2021, compared to US$92.4 million for the same quarter a year ago. The revenue for the June quarter of 2021 was US$376.7 million.

The cash and cash equivalents of the company were US$5.5 million as of June 30, 2021.

VLY stock surged around 43% YTD. It closed at US$13.61 on Sep 29, 2021.

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Bottomline

The dividend-paying companies typically offer reliability and stability to investors as these are often big and well-known brands. Besides, value investors often choose dividend stocks as they are generally less volatile. For instance, the Dow Jones US Select Dividend Index (DJDVP) jumped 20.24% YTD, indicating continued growth of the dividend-paying companies. However, investors should evaluate the companies carefully before investing.

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