Stocks have soared this year, which means this is a good time to take a look at dividend stocks that have high yields and see which ones are expected to generate enough cash to cover payouts and hopefully raise them.
But today we’re focusing on current income, which means dividend stocks with high yields, and we’re looking ahead to see how well the dividends may be covered by companies’ cash flow through 2025. Among the S&P 1500, there were 121 stocks with dividend yields of at least 5.00% as of the close on Aug. 7, according to data provided by FactSet.
If we divide a company’s expected FCF per share for a 12-month period by its current share price, we have an estimated FCF yield. This can be compared with the dividend yield to see whether or not there is “headroom” to increase the dividend. The more the headroom, the less likely it may be that a company will be forced to lower its payout.
In the following table, the “FCF yield” columns are based on the appropriate calculation method used for each company , as indicated.