2 High-yielding dividend stocks will rise

“The true investor … will do better if he forgets the stock market and pays attention to the dividend yield and operating results of his companies.” -Benjamin Graham

With that quote in mind, here are two companies with high dividend yields and improving operations or future growth potential that should put income investors on high alert: United Parcel Service (UPS 0.41%)and LTC Properties Inc. (LTC -0.20%).

Return to growth

UPS is one of the largest companies in the world. It provides a wide range of logistics solutions for customers in more than 200 countries and territories. While Wall Street may have lower expectations for UPS, that doesn’t mean income investors should avoid a stock that offers a solid dividend and could bounce back in the near term. The stock lagged the broader markets as customers switched to lower-cost shipping options and it hurt the company’s financials.

In fact, second-quarter consolidated revenue was down 1.1% year-over-year, but consolidated operating profit was down 30.1% compared to Q2 2023. Adjusted diluted earnings per share also fell by 29.5%.

But something else happened that should pique investors’ interest: The second quarter could prove to be a turning point, as UPS returned to U.S. volume growth for the first time in nine quarters. While a quarter doesn’t make a trend, it’s certainly a change of pace worth noting further.

UPS also made a move in July to acquire Estafeta, a leading Mexican express delivery company. The acquisition is targeted to close by the end of 2024 and will boost UPS’s business as Mexico’s role in global trade continues to grow.

UPS has returned to growth and made key acquisitions. It offers a dividend yield of 4.8% and has maintained or increased its dividend every year since going public in 1999. This makes it a solid dividend stock to buy as it positions itself for a comeback .

Population aging

LTC Properties is a real estate investment trust (REIT) that invests in senior housing and medical properties through lease transactions, mortgage loans and other investments. It has turned into an attractive income investment option as it has maintained monthly dividends throughout the COVID-19 pandemic when most healthcare REITs have cut their dividends.

LTC Properties boasts a long-standing executive management team with decades of real estate healthcare experience and has recorded 233 consecutive monthly dividend payments. It also offers a conservative and strong balance sheet, with debt maturities matched to cash flow and portfolio maturities – meaning investors can sleep easier at night.

However, growth is what makes this investment interesting. It specializes in senior housing and skilled nursing properties, and it’s worth noting that America’s population is aging. More than 4.1 million Americans will turn 65 each year through 2027, creating high demand for LTC properties. In addition, the US adult population aged 85 and older is expected to continue to grow rapidly — reaching 11 million by 2035 and surpassing 17 million by 2050.

While income investors wait for an aging population to drive demand for LTC properties, the company will pay a healthy dividend yield of 6.2%, making it a smart income play for investors.

Buy now?

UPS offers a potential turnaround story as it returns to U.S. volume growth and offers investors a dividend yield of nearly 5% while it waits for its financials to return to growth. LTC Properties has a bright future as America’s population ages and demand for senior housing and skilled care properties increases, and its 6.2% dividend yield is just the icing on the cake. Both stocks look like excellent high-dividend-yielding options and could be set to rise in the future.