Fed Reserve Governor Lael Brainard and San Francisco Fed Reserve President Mary Daly recently emphasized the need to raise interest rates aggressively to fight surging inflation. This, along with further Western sanctions on Russia in response to its Ukraine invasion, has dampened investor sentiment. What is more, the intensifying supply chain disruptions and a resurgence of COVID-19 cases in many states could add to the volatility in the coming months.
According to Jefferies analysts Aneta Markowska and Thomas Simons, “It's premature to start the recession countdown. This does not look like a late-cycle economy; It's a mid-cycle economy and the business cycle has room to run.” Therefore, investors looking to dodge the short-term market fluctuations could bet on high-yielding dividend stocks. Investors’ interest in high dividend stocks is evident in the iShares Core High Dividend ETF’s (HDV) 5.8% returns over the past three months.
High-yielding dividend stocks Rio Tinto Group (RIO) and Dorchester Minerals, L.P. (DMLP) could be solid picks for generating a steady income stream amid uncertain market conditions. These stocks also have an overall A (Strong Buy) rating in our POWR Ratings system, indicating decent upside potential.
Rio Tinto Group (RIO)
Based in London, RIO explores for, mines, and processes mineral resources worldwide. It offers aluminum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium.
On March 29, 2022, RIO completed the acquisition of the Rincon lithium project in Argentina after approval from Australia’s Foreign Investment Review Board. RIO’s CEO, Jakob Stausholm, said, “Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained. We will be working with local communities, the Province of Salta, and the Government of Argentina as we develop this project to the highest ESG standards.”
RIO has been paying dividends for more than 10 consecutive years. Its dividend payouts have grown at a 36% CAGR over the past five years. Its current dividend translates to a 10.35% yield, while its four-year average yield is 9.1%.
RIO’s consolidated sales revenue came in at $63.49 billion for the year ended Dec. 31, 2021, up 42.3% year-over-year. Its operating profit was $29.82 billion, up 77.2% year-over-year, while its EPS was $12.95 up 115.9% year-over-year.
Over the past three months, the stock has gained 16% in price to close yesterday’s trading session at $80.57.
RIO’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Value and Quality. It is ranked #4 of 37 stocks in the Industrial - Metals industry. Click here to see the additional ratings for RIO (Growth, Momentum, Stability, and Sentiment).
Click here to check out our Gold and Silver Industry Report for 2022
Dorchester Minerals, L.P. (DMLP)
DMLP in Dallas, Tex., engages in the acquisition, ownership, and administration of producing and non-producing natural gas and crude oil royalty, net profit, and leasehold interests in the United States.
On March 31, 2022, DMLP completed its acquisition of mineral and royalty interests totaling approximately 3,600 net royalty acres located in 13 counties. This is expected to help its future growth prospects.
DMLP has been paying dividends for more than 30 consecutive years. Its dividend payouts have grown at a 16.5% CAGR over the past five years. Its current dividend translates to a 9.7% yield, while its four-year average yield is 10.35%.
For the year ended Dec. 31, 2021, DMLP’s operating revenues increased 99.1% year-over-year to $93.42 million. Its net income came in at $70.17 million, up 220.9% year-over-year. Also, its EPS came in at $1.94, up 218% year-over-year.
Over the past year, the stock has gained 89.4% in price to close yesterday’s trading session at $26.35.
It is no surprise that DMLP has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth and Quality.
DMLP is ranked #2 of 35 stocks in the A-rated MLPs - Oil & Gas industry. Click here to see the additional POWR Ratings for DMLP (Value, Momentum, Stability, and Sentiment).
RIO shares were trading at $80.35 per share on Thursday afternoon, down $0.22 (-0.27%). Year-to-date, RIO has gained 27.91%, versus a -6.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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