Free Trial

3 High-Yield Dividend Stocks for Income Now and Growth Later

→ Kiss of death from Joe Biden (From Porter & Company) (Ad)
Chevron Corporation company logo displayed on mobile phone screen

Key Points

  • Chevron is one of the oil majors to watch, as oil prices are likely to move higher as the economy recovers
  • Higher interest rates weigh down Bristol-Myers Squibb, but a rate cut will reward patient investors.  
  • The worst may be over for UPS, which is trading near its 52-week low.   
  • 5 stocks we like better than Chevron

The latest readings on inflation show some cooling, and stocks seem to like it. However, it's important to be clear about why investors feel bullish. Inflation growth of around 3.3% won't prompt the Federal Reserve to lower interest rates, but it won't cause them to hike rates either. 

So, if the next directional move for interest rates is lower, this is a good time to buy stocks. That's particularly true of stocks that are trading at a discount. Sadly, investor psychology can make it difficult for some investors to buy quality stocks when they're on sale.  

But that's the key to long-term investing. And it's particularly true for stocks that pay a high-yielding dividend. Buying shares at a low price today gives you current income that you can use to manage inflation or reinvest for more shares. Then, when rates go down, the prices of these stocks will move higher to give you growth along with that dividend income. 

Higher Oil Prices: Chevron's Inevitable Gain

Chevron Today

Chevron Co. stock logo
CVXCVX 90-day performance
+0.13 (+0.08%)
(As of 06/18/2024 ET)
52-Week Range
Dividend Yield
P/E Ratio
Price Target

Energy stocks, particularly oil stocks, were supposed to benefit from lower interest rates this year, which would boost demand. That hasn't been the case, and that's reflected in the price of Chevron Corp. NYSE: CVX stock, which is up just 3.4% in 2024 and is still down about 2.9% in the last 12 months.

However, at the risk of sounding like a broken clock, the long-term oil price will be higher. OPEC+ is maintaining output cuts while the Biden administration continues to release oil from our country's strategic oil reserve to keep prices down. That's a supply-demand imbalance that will have to be worked out in favor of higher oil prices.

And when interest rates move lower in late 2024 or early 2025, oil demand will increase. In that situation, CVX stock displays the qualities of a stock you'll want to own.

The company's merger with Hess Corp. NYSE: HES will likely be completed this year and give it much more leverage over oil prices. And today, investors get an attractive dividend with a 4.2% yield. Plus, the Chevron analyst forecasts on MarketBeat suggest growth of over 20% for CVX stock in the next 12 months. 

Bristol-Myers is a Poor Trade But a Good Investment 

Bristol-Myers Squibb Today

Bristol-Myers Squibb stock logo
BMYBMY 90-day performance
Bristol-Myers Squibb
-0.15 (-0.37%)
(As of 06/18/2024 ET)
52-Week Range
Dividend Yield
Price Target

The Bristol-Myers Squibb Co. NYSE: BMY is being weighed down by significant debt and concerns over patent expirations on some of its best-selling drugs. Both of those have soured traders on the stock, which is down 34% in the last 12 months and 17% in 2024.

Revenue is growing, albeit at a modest pace. However, the company posted a concerning $4.40 loss per share in its first quarter of 2024. That's a reminder that the company is digesting acquisitions it made to expand its pipeline. Unfortunately, that dilution is expected to weigh on earnings for the rest of 2024.

So, it's possible, perhaps likely, that BMY stock still has further to fall. However, with short interest only about 1.4% of the stock's float, selling the stock short is not a guarantee.  

The strategic choice is to take a long position. You'll capture a dividend that yields 5.79% and pays out $2.40 per share annually. And when interest rates become more favorable, BMY stock will be positioned for a strong recovery.  

The Worst Could be Over For UPS 

United Parcel Service Today

United Parcel Service, Inc. stock logo
UPSUPS 90-day performance
United Parcel Service
-1.65 (-1.21%)
(As of 06/18/2024 ET)
52-Week Range
Dividend Yield
P/E Ratio
Price Target

At a time when e-commerce continues to grow, a company like United Parcel Service Inc. NYSE: UPS is a bellwether for the economy. So, when the company missed the top line in its first quarter 2024 earnings report, the market took notice. It doesn't matter that the company is facing rough comps to 2023 and 2022 - lower revenue is lower revenue.

UPS is implementing efforts to streamline costs and raise productivity, but those will take time to show up on the bottom line. In the meantime, the primary issue bedeviling investors is rising labor costs at a time when demand is lower. The consumer has held up stronger than economists expected. However, there are clear signs that consumer spending is slowing, at least on goods. 

Another area of concern is debt. UPS has a higher debt load than it did 10 years ago, and servicing that debt is more expensive now, albeit not at historical levels.  

For all that, this company still has strong financials that are being hit by cyclical headwinds. Investors can still collect a dividend with a current yield of 4.85%. And the UPS analyst forecasts on MarketBeat give UPS stock a 22.7% upside from its current level.  

→ Elon Musk’s chilling warning for humanity (From The Freeport Society) (Ad)

Should you invest $1,000 in Chevron right now?

Before you consider Chevron, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Chevron wasn't on the list.

While Chevron currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Beginner's Guide to Pot Stock Investing Cover

Click the link below and we'll send you MarketBeat's guide to pot stock investing and which pot companies show the most promise.

Get This Free Report
Chris Markoch
About The Editor

Chris Markoch

Editor & Contributing Author

Retirement, Individual Investing

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Chevron (CVX)
4.6771 of 5 stars
$153.32+0.1%4.25%14.10Moderate Buy$186.95
Hess (HES)
4.2912 of 5 stars
Bristol-Myers Squibb (BMY)
4.7778 of 5 stars
United Parcel Service (UPS)
4.8637 of 5 stars
Compare These Stocks  Add These Stocks to My Watchlist 

Featured Articles and Offers

Recent Videos

Roaring Kitty’s GameStop Gamble: What Went Wrong?
Will FOMC Push Stocks Higher? Here’s What to Expect
Unlock Growth: Understanding Dividend Yield

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines