Tags: barrons | midcap | stocks | dividends

Barron's: 3 Mid-Cap Stocks With Sustainable Dividends

Barron's: 3 Mid-Cap Stocks With Sustainable Dividends
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By    |   Monday, 25 March 2019 09:09 AM

In the never-ending search for yield, investors reportedly might be overlooking a patch in the market with offerings ripe for harvest: mid-cap stocks.

Barron’s said it looked for a handful of mid-cap companies that have yields of at least 2% and that grew their “free cash flow” in 2018 from the previous year.

Barron’s defined free cash as operating cash flow minus capital expenditures. A barometer of a company’s financial health, free cash can be used to pay down debt, make acquisitions, repurchase shares, or fund dividends.

Highlighting three of Barron’s picks:

Sabre (SABR), known for its airline reservations software, sports the highest yield, at 2.7%. The company has paid a quarterly dividend of 14 cents a share for about two years.

Shares of ManpowerGroup (MAN), which handles temporary staffing, were recently yielding 2.4%, the second highest on the list. The stock has struggled, with a one-year return of minus 28%. But on the plus side for dividend investors, the company’s free cash flow totaled $418 million in 2018, up from about $346 million the previous year. Last May, ManpowerGroup declared a semiannual dividend of $1.01 a share, up 8.6% from 93 cents.

Webster Financial (WBS), the only bank included in the table, yields 2%. Its stock has a one-year return of minus 1.4%, a reflection of the tough environment for banks amid concerns about an economic slowdown. Webster pays a quarterly dividend of 33 cents a share. The payout was raised more than 25% about a year ago.

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In the never-ending search for yield, investors reportedly might be overlooking a patch in the market with offerings ripe for harvest: mid-cap stocks.
barrons, midcap, stocks, dividends
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2019-09-25
Monday, 25 March 2019 09:09 AM
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