Income investors generally look for high-dividend stocks and low risk. But that’s a difficult combination to find. Dividend yields can rise if the dividend increases; they more often, and more quickly, rise if the stock price falls. And that, in turn, means that many high-yield stocks aren’t performing all that well at the moment — and may have reasonably significant risks going forward.
One way for dividend stock investors to minimize risk is to focus on the balance sheet. Cash-rich companies can be attractive for income investors for two reasons. First, the cash balance protects the dividend itself, by providing a source of funds to keep the dividend intact (or to raise it) in a down year. And second, a clean balance sheet limits the risk to an investor’s capital.
Here are 20 dividend stocks with yields over 3% — and net cash on the balance sheet. All could — and maybe should — be considered for any income investor’s portfolio.
Hot Warren Buffett Stocks To Buy Right Now: Noble Corporation(NE)
Noble Corporation PLC (NYSE:NE) shares are extending a 55%-plus rally off of its early April lows, closing in on the January high near $5.80, setting up a possible breakout from a long consolidation range going back to the summer of 2017.
The company will next report results on Aug. 2 after the close. Analysts are looking for a loss of 45 cents per share on revenues of $265.5 million.
When the company last reported on May 2, a loss of 55 cents per share beat estimates by a penny on a 35.2% decline in revenues.
Hot Warren Buffett Stocks To Buy Right Now: ENSCO plc(ESV)
In a pattern similar to NE, Ensco PLC (NYSE:ESV) is rising powerfully off of its early April low for a rally that’s already booked a gain of 55% from the nadir. This caps a long consolidation range going back to the summer of 2017. Watch for a run at the early 2017 highs near $12, which would be worth a gain of more than 80% from current levels.
The company will next report results on July 25 after the close. Analysts are looking for a loss of 28 cents per share on revenues of $445 million. When the company last reported on April 25, a loss of 32 cents per share missed estimates by five cents on an 11.5% decline in revenues.
Hot Warren Buffett Stocks To Buy Right Now: Newfield Exploration Company(NFX)
From the oil and gas exploration and production group, Newfield Exploration Company (NFX, $27.91) was one of the worst performers over the past 17 months as it fell from a high of $50 to a low of $22.72. On Feb. 21, the company released better-than-expected Q4 earnings, yet the stock tumbled more than 10% that day.
In charting lingo, it was the culmination of a bearish trend and ended with a selling climax. This is a final washout where the last bulls finally throw in the towel. The good news is that it sets up a rather strong condition for a rally. Indeed, buyers started to test the waters and money started to flow back into the stock shortly thereafter. All that was needed to unleash this bullish sentiment was crude oil’s move to a three-year high in April.
The trailing 12-month price-to-earnings ratio on NFX is roughly 13, which is below the sector’s average P/E. Its forward P/E (based on analyst estimates for the coming year’s earnings) is 8.9, which also is historically on the low side.
That means the market has not yet priced the stock for the improvements expected by analysts.
Technically, NFX is rising off the bottom of a multiyear trading range at around $23 per share. The top of the range is near $48, so there is plenty of room for the stock to rally before running into an overwhelming amount of supply, or sellers willing to unload shares at what was historically an expensive price.