Investors know that chunky payouts can be found in energy stocks, financials, and electric utilities. There's also no shortage of hefty disbursements coming out of drug stocks and telcos.
However, most sectors have a company or two that realize that regular distributions play an important part in keeping stockholders around. Let's go over a few of the stocks yielding at least 4% in some pretty unlikely industries.
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Regional amusement park operators are known more for the ups and downs of their roller coasters than the steady chain-lift that their rising dividends have become, but Cedar Fair (NYSE: FUN) and Six Flags (NYSE: SIX) sport hefty yields of 5.4% and 4.8%, respectively.
Amusement parks generate gobs of cash flow, and while investing in big-ticket scream machines to keep families and thrill seekers coming year after year matters, there always seems to be enough at the end of the season to shell out big distributions.
Dividends matter. They provide a cushion for investors, and that also sometimes holds true in analysis. Janney Capital analyst Tyler Batory slashed his estimates for Six Flags and Cedar Fair for the seasonally potent third quarter that ends later this month. Poor weather, particularly over Labor Day weekend, didn't help. However, he stuck to his bullish rating on both stocks, arguing that the pullback is a buying opportunity. One has to wonder if the bullishness would still be there if Cedar Fair and Six Flags weren't providing monster payouts.
The country's two best-known automakers also return a lot of money to their stakeholders through quarterly distributions. Ford (NYSE: F) and General Motors (NYSE: GM) pack generous yields of 5.7% and 4.1%, respectively.
The payouts may seem like a lot for a cyclical industry with plenty of ups and downs and a history of big pension obligations. New car sales have also been languishing lately. Millennials are opting for ride-sharing services and moving to metropolitan hubs with reasonable mass transit in lieu of automobile purchases. Quality cars are also lasting longer, extending the upgrade cycle on purchases.
It may seem like a crummy climate to be selling cars, and it obviously doesn't help that neither of these two icons is the electric-car darling with hundreds of thousands of preorders for its latest entry-level vehicle. However, the big dividend checks are keeping investors parked in Ford and General Motors.
There are a couple of eateries that have beefy payouts, but let's key in on Brinker International (NYSE: EAT). Brinker may not be a household name, but it's the parent company behind Chili's. The casual-dining giant hasn't been at its best these days. Comps have fallen in back-to-back years. Margins and profitability have fallen even harder.
Brinker isn't standing still. It announced last week that Chili's was going back to basics, trimming its menu by 40% to focus on core items. It remains to be seen how offering less can drum up more customers, but Brinker has to do something with the stock hitting another 52-week low last week.
Brinker raised its dividend rate last month, and the combination of a shrinking price and rising dividend translate into the stock's current 5.1% yield. Brinker is also picking up the pace on its share buyback efforts, hoping to take advantage of the low price. Investors aren't following suit, but if a leaner menu sparks a revival on the bottom line at least it could make the stock another appetizing name to buy on weakness.
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