Inflation in the US has been declining for the last six months in a row, with the current rate now when this article is being written amounting to 6.5%. We will discuss companies whose stocks demonstrate a dividend yield of more than 7%. Our Top 3 list features Pioneer Natural Resources Company, Rio Tinto PLC, and BHP Group Limited.

Selection criteria

  • The companies are trading on the NYSE, NASDAQ, or AMEX
  • Their yearly dividend yield is above 7%
  • Their market capitalisation is over 50 billion USD
  • Their debt load coefficient is under 0.5
  • Their profitability is more than 30%
  • Their average trading volume is more than 750,000 stocks

1. Pioneer Natural Resources Company – 11.03%

Founded in: 1997

Registered in: the US

Head office: Irving, Texas

Sector: oil and gas exploration and mining

Platform: NYSE

Market capitalisation: 55.8 billion USD

Debt load ratio: 0.23

Profitability: 28%

Pioneer Natural Resources Company (NYSE: PXD) was formed as a result of the merger of Parker & Parsley Petroleum Company and MESA Inc. It mines oil and gas in the US, Canada, Argentina, and South Africa. It also holds shares in eleven gas-processing companies.

According to the 2021 report, the primary cost of mining a barrel of oil was 5.63 USD. A WTI barrel at the moment this article was being prepared cost 80 USD. Pioneer Natural Resources sells oil to other oil-processing companies – Sunoco LP (NYSE: SUN), Shell plc (NYSE: SHEL), Occidental Petroleum Corporation (NYSE: OXY), and Plains All American Pipeline L.P. (NASDAQ: PAA).

Pioneer Natural Resources has been paying dividends since 2005, with extra dividends paid in 2022 apart from quarterly payments. In Q3 last year, the stockholders received 1.1 USD per share and 4.61 USD extra. Hence, the yearly dividend yield exceeded 11%.

2. Rio Tinto PLC – 8.56%

Founded in: 1873

Registered in: the UK

Head office: London, UK

Sector: other industrial metals and mining

Platform: NYSE

Market capitalisation: 129 billion USD

Debt load ratio: 0.25

Profitability: 29%

Rio Tinto PLC (NYSE: RIO) mines copper, gold, aluminium, iron ore, diamonds, and more. It owns oil-processing plants and smelters, electric plants, and research and service enterprises. Rio Tinto works in many countries and has a diversified portfolio of assets, which provides for smaller risks and a more stable income. The following renowned funds that manage trillions of dollars are among its stockholders: BlackRock Inc. (NYSE: BLK), Vanguard Group, and State Street Corporation (NYSE: STT).

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In Q3, 2022, Rio Tinto paid 2.66 USD dividends per share. The yield is now 8.56% a year; but at the time of payment, when the stocks were trading 25% lower than the current price, the yield exceeded 11%.

3. BHP Group Limited – 9.19%

Founded in: 2001

Registered in: Australia

Head office: Melbourne, Australia

Sector: oil and gas exploration and mining

Platform: NYSE

Market capitalisation: 187.3 billion USD

Debt load ratio: 0.37

Profitability: 47.5%

BHP Group Limited (NYSE: BHP) was created after the merger of BHP and Billiton. It is one of the world’s largest mining companies that explores, develops, and mines a wide range of resources, including iron ore, copper, coal, and oil.

The portfolio of BHP Group is diversified and includes shafts, processing plants, and transport infrastructure. Moreover, the company provides marketing, trading, maintenance, and financial services.

In September 2022, BHP Group paid 3.48 USD of dividends per share, and the yearly dividend yield amounted to 9.19%.

Summary

The Top 3 list of dividend stocks with a yearly dividend yield higher than the US inflation rate features Pioneer Natural Resources Company, Rio Tinto PLC, and BHP Group Limited. They all mine natural resources and hydrocarbons. Their high dividend yield can be attributed to the significant increase in the prices of their produce.

The US inflation is slowing down, but the chairman of the Fed Jerome Powell informs that the trend might reverse. The rising prices for natural resources and hydrocarbons raise concerns: this might send inflation back up.


Past performance is not a reliable indicator of future results or future performance.


The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.


Material is prepared by

A trader since 2004, Eugene started actively investing on the US stock market in 2012. He now regularly publishes a variety of analytical articles about stocks on the RoboMarkets website and blog.