Dividend.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
British American Tobacco has taken the first position in the list, as valuation and dividend seem very attractive. Second on the list is Prospect Capital Corp, the business development company that recently declared a dividend. Third is Apple, which has seen its stock rise recently on artificial intelligence excitement. Last is the telecommunications company AT&T.
Don’t forget to read our previous edition of trends here.
British American Tobacco’s Dividend Excites Investors
British American Tobacco (BTI) has been the most popular ticker with our readers, with an increase in traffic of 20%. The cigarette maker pays a solid dividend of $2.97 per share, which yields nearly 10% at current prices.
The company trades dirt-cheap at around 7, making it a strong dividend play. Investors might be worried about the fact that cigarettes are a dying business and could eventually disappear. However, the company is making provisions to secure its business by moving into non-combustible items, which are believed to have less of a negative impact on health.
British American has also been repurchasing shares recently. This might have a positive impact on the company over the long term as earnings per share are going to be higher. The company is expected to grow revenue by 4% per year. The growth prospects, combined with the high dividend yield and low valuation, has made this stock attractive for some investors.
Source: Barchart
Prospect Capital Declares Dividend
Prospect Capital Corp (PSEC) has taken the second spot in the list with an advance in viewership of 18%. Prospect has declared its monthly dividends for the four months through August. As a result, Prospect will be paying a 6 cents dividend for 84 consecutive months.
The annual dividend yield is even higher than British American Tobacco at more than 13%. Prospect is an income-oriented business development company investing in private debt and private equity. The company typically invests in the U.S. middle market across different industries, with its goal to generate current income. The company also has a dividend reinvestment plan, under which investors can reinvest the dividend back into the business for stronger compounded returns over time.
Prospect’s shares have fallen about 11% over the past year, but that decline was more than offset by the dividend. Also, the company said it already paid its net asset value 2.3 times as of March 2024.
Source: Barchart
Apple's Stock Up on AI Prospects
Apple (AAPL) has taken the third spot in the list, seeing viewership jump 13%. The iPhone maker’s stock has been rising recently, as investors likely started to like the idea that Apple is going to be a winner in the era of artificial intelligence (AI).
Instead of building its own AI models, Apple has decided to team up with OpenAI, the startup that currently has some of the most advanced AI models. Apple could use these models to revamp its voice assistant Siri. This seems like a partnership that makes sense for both companies. OpenAI has the technology, while Apple has access to about one billion customers through the iPhones.
As a result of these initiatives, Apple stock has jumped 30% over the past two months, with the company now having a market capitalization of $3.4 trillion.
Source: Barchart
AT&T Declares Regular Dividend
AT&T (T) is last in the list, with an increase in traffic of 7%.
AT&T has recently declared its regular dividend of $0.2775 per share, which currently yields more than 5%. The company cut its dividend in half in 2022 to deal with its mountain of debt accumulated from pricey acquisitions that did not deliver and were unwound.
The company has been generating between $4 billion and $5 billion of free cash in the last four quarters, meaning this dividend is not at risk. And the stock trades at a very weak price-to-earnings ratio of just 10, a sign the stock is cheap.
Debt has been decreasing as the company has been selling off assets. Growth, however, remains elusive.
Source: Barchart
The Bottom Line
British American Tobacco has a strong dividend yield and its business prospects do not look weak. Prospect Capital has declared four monthly dividends. Apple shares have surged in recent months, as investors got excited about the company’s prospects. AT&T rounded off the list as the telecom giant recently declared dividend.
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