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Yahoo
31-07-2025
- Business
- Yahoo
Prediction: These 3 Dividend Stocks Will Become Dividend Kings Within the Next 5 Years (and Are Great Buys for Passive Income)
Key Points Sherwin-Williams has evolved into a paint and coating powerhouse with a 46-year streak of hiking dividends. The next Dividend King is a compelling stock to consider for purchase. McDonald's is top of the class when it comes to dividend reliability. 10 stocks we like better than Sherwin-Williams › There are about 55 companies that qualify as Dividend Kings -- meaning they have boosted their payouts for at least 50 consecutive years. The list will likely grow as existing Dividend Kings retain their status and new companies gain the distinction. Here's why Sherwin-Williams (NYSE: SHW), Pentair (NYSE: PNR), and McDonald's (NYSE: MCD) are all on track to become Dividend Kings within the next five years and are worth buying now. Sherwin-Williams has excelled at growing shareholder value -- and should continue to do so in the future Scott Levine (Sherwin-Williams): Professional painters and DIYers will certainly recognize the name Sherwin-Williams, but income investors will likely know the name for its extended commitment to rewarding shareholders. Over the past 46 years, Sherwin-Williams, whose stock currently offers a forward yield of 0.93, has provided investors with increasing dividend payouts. If the streak continues for another four years, the company will be coronated as a Dividend King. With origins going back to 1866, Sherwin-Williams has a long history that extends beyond its time as a dividend superstar. From its simple beginning until today, Sherwin-Williams has evolved into an industry stalwart, specializing in paints and coatings for automotive and marine applications, industrial wood coatings, and a variety of others. In addition to more than 5,400 stores and branches, Sherwin-Williams operates over 140 manufacturing and distribution facilities. Although the stock's 0.93% forward yield is modest, the allure of Sherwin-Williams stock as a passive income play is in the sustainability of its payout. Over the past decade, Sherwin-Williams has maintained an extremely conservative 26.6% payout ratio. Plus, the company generates ample free cash flow to cover the distributions. While some companies boast of impressive streaks of dividend raises -- all the while notching nominal boosts to their payout -- Sherwin-Williams has done the opposite. From 2014 through 2024, the company has raised its dividend at a 14.6% compound annual growth rate. For conservative investors looking for rock-solid income investments, Sherwin-Williams demands consideration. The stock is sensitive to activity in the housing market and industrial demand. However, investors who are comfortable riding out the temporary volatility will benefit over the long term. Solid end markets and ongoing margin expansion make Pentair an attractive stock to buy Lee Samaha (Pentair): This water products company has increased its dividend for 49 consecutive years, and is therefore on the cusp of becoming a Dividend King. As always with Dividend Kings, it's not just the dividend itself or the yield that's important; it's the reason why the company has been able to raise its dividend for so many consecutive years. In Pentair's case, it's the solidity of its end markets, which include fluid treatment and pump products and systems (Flow segment), commercial and residential water treatment solutions (Water Solutions), and energy-efficient pool solutions (Pool). There are two reasons to buy the stock. First, its end markets, as outlined above, depend on the need to maintain and improve water infrastructure, the growth of commercial and residential developments, as well as urbanization, and ongoing demand for pool products from an ever-growing installed base of pools in the U.S. The second reason stems from management's transformational initiatives, which continue to drive profit margins higher through more targeted pricing, reduced sourcing complexity, the implementation of lean manufacturing techniques, and a focus on developing and selling key products to key customers that account for the majority of its business, using the 80/20 rule. These initiatives have driven operating margin from 18.6% in 2022 to an estimated 25% in 2025 and then 26% in 2026, helping Pentair stock rise 45% since the start of 2022. McDonald's business model supports a growing dividend Daniel Foelber (McDonald's): In September 2024, McDonald's raised its dividend to $1.77 per share per quarter, marking its 48th consecutive year of boosting the payout. That puts McDonald's on track to reach 50 years of dividend increases by next year. McDonald's has the ideal business model for consistently returning cash to shareholders through dividends. Franchisees own and operate 95% of McDonald's restaurants -- paying McDonald's fees like rent and royalties. McDonald's offers franchises different options, depending on how much skin they want in the game. Half of McDonald's stores operate using a conventional license where McDonald's pays for the building and real estate, the franchisee pays for the equipment, and the franchisee collects operating profit from the store and pays McDonald's rent and royalties. Another option is a developmental license (20% of McDonald's restaurants), where the franchisee pays for the building, real estate, and equipment, thereby avoiding rent payments to McDonald's and pocketing a higher percentage of cash flow (although still paying McDonald's royalties). For foreign-affiliated franchisees (which are 25% of McDonald's restaurants), franchisees pay for equipment, the building, and real estate, and McDonald's receives royalties and equity-based earnings depending on its ownership stake. These fees give McDonald's steady free cash flow (FCF), making its results fairly predictable and its capital return program forecast highly accurate. McDonald's also has a very high operating margin because the franchise model is capital-light. That means McDonald's doesn't have to spend a lot of money to make money, and converts a high amount of sales to operating income. As you can see in the chart, McDonald's can afford to boost its dividend because of its high-margin FCF growth. Add it all up, and McDonald's stands out as an ultra-high-quality dividend stock that can serve as a foundational holding in a passive income portfolio. Should you invest $1,000 in Sherwin-Williams right now? Before you buy stock in Sherwin-Williams, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Sherwin-Williams wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Sherwin-Williams. The Motley Fool has a disclosure policy. Prediction: These 3 Dividend Stocks Will Become Dividend Kings Within the Next 5 Years (and Are Great Buys for Passive Income) was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
Prediction: These 3 Dividend Stocks Will Soar in the Second Half of 2025
Key Points Brookfield Infrastructure operates a massive infrastructure portfolio, and its stock offers an attractive high-yield dividend. It could be worse before it gets much better for Whirlpool. Dow is a deep value stock for risk-tolerant investors. 10 stocks we like better than Brookfield Infrastructure › Despite an epic sell-off in April, the S&P 500 (SNPINDEX: ^GSPC) recovered and rose 5.5% in the first half of 2025. It's a decent performance considering the index has averaged a 12.2% annual gain over the last decade. And the S&P 500 is up another 2.6% in July at the time of this writing. However, not all individual stocks have benefited from the index's rise. Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC) is up slightly on the year, while Whirlpool (NYSE: WHR) and Dow (NYSE: DOW) are down big. Here's why these three beaten-down dividend stocks have what it takes to recover in the second half of the year. Brookfield Infrastructure offers a high-yield stock that's partly powered by data centers Scott Levine (Brookfield Infrastructure): Lagging the 8.2% rise in the S&P 500 since the start of 2025, shares of Brookfield Infrastructure are up 4.9% year to date as of this writing. While the stock's underperformance may be disheartening for shareholders, there's no reason to speculate that the trend will continue throughout the remainder of the year. In fact, there's good reason to suspect that shares will bound higher in the back half of 2025, making today a great time for passive income investors to pick up Brookfield Infrastructure stock along with its 4.1% forward-yielding dividend. While Brookfield Infrastructure stock has provided a lackluster performance recently, the growing interest in artificial intelligence (AI) may lead investors to consider Brookfield Infrastructure stock as a way to gain AI exposure. Because data centers provide the backbone for AI computing, data center stocks have benefited from the explosion in AI interest. In addition to the midstream, transport, and utility assets it operates, Brookfield Infrastructure also includes data centers in its portfolio. In fact, data centers represent about 13% of Brookfield Infrastructure's funds from operations. And while it doesn't represent one of the larger asset classes in the portfolio at present, there's no reason to dismiss the possibility that the company may seek further data center acquisitions to strengthen its portfolio. Currently, shares of Brookfield Infrastructure are priced at a discount to their historical valuation, trading at 3.3 times operating cash flow compared to the five-year average operating cash flow multiple of 4. Although semiconductor stocks and nuclear energy start-ups are getting the lion's share of attention right now as AI investment opportunities, Brookfield Infrastructure isn't basking in the limelight. However, that may change significantly in the remainder of 2025. A long-term winner from the trade war Lee Samaha (Whirlpool): This is a somewhat controversial call, but hear me out. I believe the household appliance maker may well be compelled to revise its full-year earnings and cash flow expectations, and potentially cut its dividend in the process. The reality is that mortgage rates are close to where they were when the Federal Reserve last started cutting its rates last year, and the housing market hasn't shown meaningful improvement. That's not great news for a company that relies on purchases of higher-margin, discretionary major household appliances. In addition, the fear of further tariff escalation may have encouraged Asian competitors to push forward imports to the U.S. The setup is not ideal going into the company's second-quarter earnings report, and significant near-term risks remain. Still, there's strong reason to believe that Whirlpool will emerge as a long-term winner from President Trump's trade actions, not least as the administration seeks to close loopholes that have allowed competitors to avoid paying tariffs on Chinese steel used in their products. Moreover, with 80% of what it sells in the U.S. being produced in the U.S., the company is well positioned to prosper long-term from ongoing tariffs. The market may recognize that possibility after the earnings report (which could contain bad news) is released. Dow is a better buy now that the dividend is lower Daniel Foelber (Dow): The chemical giant plummeted 17.5% on July 24 in response to weak second-quarter 2025 results and a 50% cut to its dividend. The dividend reduction marks the first adjustment to the payout since Dow spun off from DowDuPont in 2019 and initiated a $0.70 per share quarterly dividend. The latest quarterly dividend was $0.35 per share. Dow's sales and earnings continue to decline due to weak volumes and pricing pressure. The commodity chemical industry is in a multiyear downturn due to weakness across end markets, with Dow calling the situation a "lower-for-longer earnings environment" in its second-quarter earnings release. "Dow's strategic actions enable us to mitigate the dynamic factors that our industry is facing," said Dow's CEO, Jim Fitterling, in the earnings release. "However, signs of oversupply from newer market entrants who are exporting to various regions at anti-competitive economics require broader industry engagement and additional regulatory action to restore competitive dynamics." Dow's plummeting earnings, a lack of guidance, and management's concerns about a prolonged downturn have led investors to become understandably sour on the stock. The cut to the dividend means there's less passive income to help cushion declines in the stock price. But as I alluded to in June, even if Dow cut its dividend in half, it would still have an excellent yield because the stock is so beaten-down. Even after the dividend cut, Dow still yields a sizable 5.6%. More importantly, the dividend cut frees up dry powder for Dow to fix the underlying business, manage costs, and ride out this downturn. The company has sold off some assets to raise cash, but that's not a viable long-term strategy. The dividend cut will save Dow about $990 million per year. For context, Dow's cost-saving program is $1 billion -- so cutting the dividend is roughly equal to efforts across Dow's operations. Typically, shareholders prefer to see dividend growth, not a cut. So it may seem strange to buy the stock now that there's less passive income. But long-term investors that are more interested in where a company is headed than where it has been may want to scoop up shares in this commodity chemical giant while it is out of favor. With cost savings, a lower dividend expense, and billions in cash flow from asset sales, Dow has what it takes to endure this slowdown and return to earnings growth when the cycle turns. If macro data is encouraging, I could see Dow recovering quickly in the second half of the year. However, Dow is forecasting more challenges across its end markets -- especially infrastructure. So it's best to only consider the stock if you have a long-term investment time horizon and a high-risk tolerance, given there's no telling how long this downturn will last. Should you buy stock in Brookfield Infrastructure right now? Before you buy stock in Brookfield Infrastructure, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Brookfield Infrastructure wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and Whirlpool. The Motley Fool has a disclosure policy. Prediction: These 3 Dividend Stocks Will Soar in the Second Half of 2025 was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
3 Dirt-Cheap Value Stocks to Invest $1,000 in This July
NextEra Energy is a leading utility stock that has fallen out of favor due to the passage of the "One Big Beautiful Bill." United Airlines' low valuation really is a buying opportunity. Lockheed Martin is a stable stalwart that can afford to grow its dividend for decades to come. 10 stocks we like better than NextEra Energy › With the major stock market indexes hovering around all-time highs, there aren't as many dirt-cheap value stocks hiding in plain sight. But there are plenty of opportunities if you know where to look. Utilities, airlines, and stodgy industrial companies won't light up a growth investor's radar. However, they can be exactly what dividend seekers are looking for to boost their passive income stream. Here's why these three Motley Fool contributors think NextEra Energy (NYSE: NEE), United Airlines (NASDAQ: UAL), and Lockheed Martin (NYSE: LMT) stand out as dividend stocks that are worth investing $1,000 in this July. Scott Levine (NextEra Energy): While passage of President Donald Trump's "One Big Beautiful Bill" helped to drive nuclear energy stocks higher, those focused on solar and wind power -- like utility stock NextEra Energy -- have quickly fallen out of favor. Value investors know, however, that there are great opportunities to be had when the market turns its back on quality stocks. For those willing to buck the trend, NextEra's stock, along with its 3.1% forward-yielding dividend, are worth adding to the buy list. With ample renewable energy assets powering its portfolio, the utility, in some investors' estimations, is on shaky ground as President Trump's budget bill phases out tax credits for solar and wind energy established in the 2022 Inflation Reduction Act. What investors may be missing is that the company also operates ample natural gas and nuclear assets -- energy sources favored in the recently passed legislation. In 2024, natural gas and nuclear represented 69% and 10%, respectively, of Florida Power and Light's (FPL) net generating capacity. As one of the largest U.S. utilities, FPL was NextEra Energy's most profitable business in 2024, providing $2.21 in earnings per share (EPS) of the company's overall EPS of $3.37. It's also important to acknowledge the company's track record of success over the past decade, growing shareholder value at a pace that exceeds both the S&P 500 and the Dow Jones Utility Average. Trading at 11.9 times operating cash flow, NextEra Energy stock is priced at a discount to its five-year average cash flow multiple of 14.8, making it a great opportunity today. Lee Samaha (United Airlines): Airlines have been much-maligned investments over the years, and that's one of the reasons they trade on such low earnings multiples (United Airlines trades on just over eight times its estimated 2025 earnings). The other reason is that investors are concerned about the traditional cyclical nature of the business and the level of debt that airlines incurred when travel restrictions were imposed on the public. Those fears are still partly justified, but there's strong evidence to suggest that airlines, particularly network carriers like United, have mitigated these risks to such an extent that the stocks now appear to be excellent values. Through the development of loyalty programs, co-branded credit cards, and premium offerings, United has diversified its revenue streams, reducing its reliance on main-cabin tickets. And, as previously discussed, network carriers like United and Delta Air Lines have a structural advantage in an era of rising airport, labor, and supply-chain costs. For example, only a slight increase in these costs will challenge the business models of the low-cost carriers and squeeze their profit margins. Whereas airlines like United are less affected by a $10 increase in costs per ticket compared to low-cost airlines. It all adds up to make United Airlines an excellent long-term investment for readers who believe the airline industry has learned from the mistakes of the past. Daniel Foelber (Lockheed Martin): Defense contractor Lockheed Martin is down a steep 24% from an all-time high reached in October of last year. The sell-off could present a buying opportunity for dividend investors seeking an industry leader at a favorable value. Last quarter, Lockheed reaffirmed its full-year outlook for low single-digit revenue growth and an increase in diluted earnings per share (EPS). It's not a great forecast, but it should provide ample free cash flow (FCF) to continue returning capital to shareholders through stock buybacks and consistent dividend increases. It has a huge backlog that is more than double a year's worth of sales. This allows Lockheed to plan its spending and have an accurate handle on its FCF, which is helpful when budgeting for its capital return program. Last October, it raised its dividend for the 22nd consecutive year, boosting the quarterly payout to $3.30 per share. That's good for a forward yield of 2.9%, which is sizable relative to other defense contractors like RTX, Northrop Grumman, General Dynamics, and L3Harris Technologies. Lockheed also stands out as a good value, with a mere 17.3 price-to-earnings ratio based on its share price at the time of this writing and the midpoint of its 2025 diluted EPS guidance of $27.15. What's more, management's diluted EPS guidance is more than double its dividend payment, meaning that Lockheed can easily afford its generous payout thanks to its strong earnings. Add it all up, and Lockheed checks all the boxes when it comes to finding a reliable dividend stock at a good value this July. Before you buy stock in NextEra Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and NextEra Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $998,376!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends L3Harris Technologies and NextEra Energy. The Motley Fool recommends Delta Air Lines, Lockheed Martin, and RTX. The Motley Fool has a disclosure policy. 3 Dirt-Cheap Value Stocks to Invest $1,000 in This July was originally published by The Motley Fool
Yahoo
10-07-2025
- Business
- Yahoo
Why MP Materials Stock Soared Today
MP Materials is a U.S.-based company that provides a unique opportunity for gaining exposure to rare earths. The Department of Defense is making a substantial investment in the company in an effort to strengthen the nation's security. Shares have soared so far in 2025, and potential investors may want to wait for a pullback. 10 stocks we like better than MP Materials › With shares climbing 113% through the first half of 2025, there are certainly a lot of new investors in rare earths producer MP Materials (NYSE: MP). But investors are sitting up and taking notice of a notable new investor -- Uncle Sam. The company announced a new deal with the United States Department of Defense, and investors are enthusiastically expressing their approval. As of 10:31 a.m. ET, shares of MP Materials have skyrocketed 50.6% higher. In an effort to expedite the development of the domestic end-to-end rare earth magnet supply chain -- and shore up the nation's security by reducing its dependence on China and others for rare earths -- the Department of Defense has entered into a public-private partnership with MP Materials. The Department of Defense is providing "a multibillion-dollar package of investments and long-term commitments" that will assist the company in developing a second magnet manufacturing facility in the U.S. According to the agreement, the Department of Defense will purchase $400 million of a newly created series of preferred stock that's convertible into shares of the MP Materials common stock as well as a warrant permitting the Department of Defense to acquire additional shares of common stock. As a result of the agreement, the Department of Defense is poised to become the largest shareholder of MP Materials stock. The new deal with the Department of Defense may very well turn out to be transformational for MP Materials, and the market's enthusiasm is understandable. With the stock's impressive rise since the start of the year, however, those looking to load up on the mining stock may want to wait for a pullback as the market's exuberance tapers off. Before you buy stock in MP Materials, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and MP Materials wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $998,376!* Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy. Why MP Materials Stock Soared Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-06-2025
- Business
- Yahoo
These 2 Beaten-Down Dividend Stocks and This ETF Yield Over 4%. Here's Why They Are Worth Doubling Up on in June.
Phillips 66 is a leading refining company with a history of hiking its dividend consistently higher. J.M. Smucker is too cheap to ignore. The Global X MLP & Energy Infrastructure ETF invests in America's energy future. 10 stocks we like better than Phillips 66 › The S&P 500 (SNPINDEX: ^GSPC) has staged an epic recovery and is now positive year to date as investors look past ongoing macro challenges and focus on long-term growth. The rebound has increased the valuations of many stocks and exchange-traded funds (ETFs) -- making major indexes like the S&P 500 relatively expensive. But there are still compelling bargains if you know where to look. Here's why Phillips 66 (NYSE: PSX), J.M. Smucker (NYSE: SJM), and the Global X MLP & Energy Infrastructure ETF (NYSEMKT: MLPX) are great buys for investors looking to generate passive income from dividend stocks and ETFs. Scott Levine (Phillips 66): With energy prices plunging over the past year, many oil and gas stocks have received a cold shoulder from investors. Shares of leading refining company Phillips 66, for example, have plummeted more than 18% over the past year as of this writing. Disconcerting as this drop may be, it provides a great buying opportunity for investors to load up on a solid energy stock that currently offers a 4.3% forward yield. It's not merely the fact that Phillips 66 offers a high-yield dividend that makes it alluring. From 2012, the first full year it paid a dividend after it was spun off, through 2024, the company has boosted its dividend higher at a compound annual growth rate of 15%. While returning an increasing amount of capital to shareholders, management hasn't been willing to jeopardize the company's financial well-being. Over the past five years, Phillips 66 has averaged a 72% payout ratio. While it operates midstream assets and has a chemicals business, it's the company's refining business that contributes most to its bottom line. From 2021 through 2024, the refining business represented, on average, 38% of the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Phillips 66 has succeeded in reducing refining costs over the past couple of years, and it's targeting further reductions by 2027 -- something that makes further dividend hikes more likely. After reducing refining costs from $6.98 per barrel in 2022 to $5.90 in 2024, management has set a goal of dropping this to $5.50 by 2027. Another potential factor that could help drive further dividend growth is the recent activist investor activity, which resulted in Elliot Investment Management picking up two board seats. Those looking to procure more passive income would be well served to gas up their portfolios with Phillips 66. Daniel Foelber (J.M. Smucker): J.M. Smucker got hammered on Tuesday -- falling 15.6% in a single session. That steep of a sell-off is unusual for a traditionally low-growth, stodgy, dividend-paying company. The stock is now treading water at its lowest level in over 12 years. The packaged food company has a diverse portfolio of brands spanning five key categories -- U.S. retail coffee (led by Folgers and Café Bustelo), retail frozen handheld and spreads (Jif peanut butter, Uncrustables sandwiches, Smucker's toppings, etc.), U.S. retail pet foods (brands like Milk-Bone and Meow Mix), and sweet baked snacks (mainly Hostess products like Twinkies). The challenge with J.M. Smucker is that some of its products depend on discretionary spending (like treats for pets). Many of its snack brands are pressured by competition and changing buyer preferences toward healthier options. Throw in inflationary challenges and tariffs, and it's easy to see why J.M. Smucker profits have been falling. Given these headwinds, some investors may pass on J.M. Smucker and not think twice about buying the beaten-down value stock. But J.M. Smucker has an exceptionally valuable ace in the hole -- its free cash flow (FCF). Even during a down year, the company still generated $816.6 million in FCF compared to $455.4 million in dividend payments. Better yet, it expects FCF to tick up higher in fiscal 2026 -- reaching $875 million. J.M. Smucker has a generous 4.6% yield and 29 consecutive years of dividend increases , making it a great stock for collecting passive income. J.M. Smucker's growth is slowing, but the stock's valuation already reflects investor concerns -- with the company guiding for $8.50 to $9.50 in fiscal 2026 adjusted earnings per share. Even if it achieves the low end of that earnings guidance range, it would still have a dirt-cheap adjusted forward price-to-earnings ratio of just 11.1. Add it all up, and J.M. Smucker is a great choice for value investors looking for a high-yield dividend stock to buy in June. Lee Samaha (Global X MLP & Energy Infrastructure ETF): This ETF currently yields 4.5% and offers investors a way to get diversified exposure to investing in America's future as an energy superpower. The fund invests in midstream infrastructure (pipelines and storage) companies. They tend to have relatively stable streams of income from take-or-pay contracts and offer less sensitivity to the price of energy compared to companies such as oil and gas exploration and production companies or oil and gas services companies. That's not to say the companies it invests in, such as Kinder Morgan, Cheniere Energy, and Energy Transfer, don't have indirect exposure to the price of energy, because they do. High energy prices encourage investment in energy development, which in turn leads to increased production. That makes signing long-term contracts with customers a lot easier for pipeline and storage companies. Another factor improving the prospects for energy infrastructure companies is an administration committed to promoting energy production and ensuring the U.S. achieves energy self-sufficiency and the capability to export energy. It's no coincidence that President Donald Trump's secretary of the interior is Doug Burgum, the former governor of North Dakota, a major oil-producing state. It's also notable that one of the first actions Trump took in office was to remove the pause on export permit applications for new liquefied natural gas terminals that had been put in place by the previous administration. It all adds up to making this ETF an attractive investment, particularly with the price of oil still above $60 a barrel. Before you buy stock in Phillips 66, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Phillips 66 wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cheniere Energy, J.M. Smucker, and Kinder Morgan. The Motley Fool recommends Phillips 66. The Motley Fool has a disclosure policy. These 2 Beaten-Down Dividend Stocks and This ETF Yield Over 4%. Here's Why They Are Worth Doubling Up on in June. was originally published by The Motley Fool
