With a yield of 5%, Certificate of Deposits (CODs) are some of the safest investments to consider. However, many times, you can do far better than 5% with higher-yielding income stocks, such as:
| CALM | Cal-Maine Foods | $56.77 |
| PBR | Petrobras | $10.90 |
| SQM | Sociedad Química | $74.26 |
Income Stocks: Cal-Maine Foods (CALM)
Cal-Maine Foods (NASDAQ:CALM) is well off its highs of above $60 after it posted third-quarter results. The supplier of fresh eggs reported revenue growing by 108.9% Y/Y to $997.5 million. Investors are expecting 2022’s “eggflation” to ease. This would lower Cal-Maine’s sales growth for the year.
CEO Sherman Miller said that the company benefited from a dynamic market environment, with higher average selling prices and strong demand boosting sales. However, the epidemic of highly pathogenic avian influenza reduced egg-laying capacity in the U.S.
After demand for eggs slows following the peak winter holiday season, the company expects continued demand strength for shell eggs. Cal-Maine has a competitive advantage. It has a diversified customer base, from the grocery chain to the club store levels.
CALM stock pays a dividend of $107.7 million, or $2.20 a share. Its dividend policy changes quarterly, depending on eggshell sales. The cumulative $4.403 a share dividend yielded 7.9%. If it pays a lower dividend next quarter, the yield is still above 5% from CDs.
Income Stocks: Petrobras (PBR)
Petrobras Brasileiro (NYSE:PBR) is a state-owned Brazilian multinational petroleum company. The stock trades at a discount to the energy industry at a price-to-earnings ratio of only 1.9 times. Interference from Brazil’s new President, Luiz Inacio Lula da Silva, prevents the stock from rising by much.
Income investors may count on Petrobras to pay a record dividend worth $6.9 billion. The 2.745 Brazilian Real converts to USD 0.54 or a yield of 5.05%. The company is firmly committed to keeping increasing fossil fuel output for decades. Western oil production is shrinking, so the Brazilian firm must expand output to meet tight supply. The current global energy crisis caused inflation rates to rise. This would alleviate the world’s problem of higher consumer prices.
Petrobras is balancing its oil energy ambitions with green energy developments. CEO Jean Paul Prates said that the company will focus on renewable energy projects. It is reviewing new partnerships with energy companies. These wind projects will net a capacity of 14.5 gigawatts.
Sociedad Quimica y Minera (SQM)
Sociedad Quimica y Minera (NYSE:SQM) is a Chilean chemical company that also supplies plant nutrients. SQM stock last paid a dividend of $7.6267 in the fiscal year of 2022 for a trailing yield of 10.4%.
Sociedad stock trended lower since Feb. 2023 on worries about China spot prices dropping. CEO Ricardo Ramos said that the company is geographically diversified by segment and by product. The weakness in China is not yet a concern. Shareholders may patiently wait for transaction volumes to trend higher this year.
SQM is investing in new capacity for iodine. This takes time to pay off. For example, it needs to get permits and meet environmental conditions before proceeding. Once its iodine capacity expands, revenue will rise, supporting its dividend payout. SQM is strengthening its lithium capacity in Chile, China, and the Citroen region. When the new capacity arrives, expect the miner to increase production to 210,000 metric tons annually.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.