US stocks are back at all-time highs. All major indices are back in the green today with the Dow extending gains above 27,000 and the S&P 500 well above 3,000. Equity analysts takes a contrarian view towards large department stores such as Macy’s and Nordstroms.

Equity Analysts Weigh In on High-Yielding Stocks

In a recent Morningstar Investing Insights podcast, equity analyst David Swartz highlights three high-yield stocks with stable dividends in the consumer sector.

Macy’s pays an annual sky-high dividend yield of nearly 10%.

Equity analyst David Swartz explains,

“Macy’s raised its dividend consistently until 2017 but has kept it at the $1.51 level since as it has prioritized debt reduction. We forecast Macy’s will pay about 52% of 2019’s earnings as dividends and expect a 45% dividend payout ratio in the long term. We project Macy’s will hold its dividend constant through 2022 as it continues to pay down debt, and then begin to increase its dividend again in 2023. We forecast it will generate more than enough free cash flow to cover its dividend for the foreseeable future.”

Later in the podcast, Christine Benz invites Judith Ward from T. Rowe Price to discuss cash cushions. Also, equity analyst Erin Lash picks a wide-moat stock from the packaged food aisle.

Finally, Alec Lucas shares a few great picks from Vanguard’s large-cap offerings, before equity analyst John Barrett outlines why investors should wait before purchasing two noted payroll processors.

While PinnacleTV tends to focus on small-cap stocks and ideas, diversification is the cornerstone of every great portfolio. The doubters of the US economy continue to be proven wrong. If the consumer stays strong and the US economy avoids recession, many stocks outlined by Morningstar will do well.