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The recent market rally has pushed dividend yields lower in some FTSE 100 stocks. I’ve been taking a look at the latest dividend forecasts looking for high-yielding stocks to buy now.
HSBC Holdings: recovering
After a rough patch during the pandemic, HSBC holdings (LSE: HSBA) appears to be on the mend. Rising interest rates have helped rebuild the group’s profit, which rose from $5.3 billion to nearly $14 billion last year.
Broker forecasts suggest this earnings growth will continue through 2023. This is expected to feed through to the bank’s dividend, which could return to its pre-pandemic level of $0.50 per share this year.
Forecasts are never guaranteed, of course. But if City analysts are right, then HSBC shares currently offer a dividend yield of 6.8%.
In general, I see it as a very safe bank to invest in. My only concern is the political risk that arises from the bank’s heavy reliance on the China and Hong Kong markets. Some shareholders have called for the bank to be broken up, although I assume this will not happen.
Overall, I think HSBC shares look attractive to income seekers at current levels.
Taylor Wimpey: Bargain Home Builder?
Now may not seem like the logical time to buy home construction stocks. The market is slowing down and conditions could worsen.
However, shares of the FTSE 100 home builder taylor wimpey (LSE: TW.) have fallen 40% in the last five years. They are now trading in line with their book value of 120 pence per share. In other words, the stock price is backed by cash, land, and property.
Obviously, there is a risk that the UK will suffer a deeper than expected recession. Property prices could fall, weakening the stock’s asset backing.
However, Taylor Wimpey finished last year with a net cash of £864m. This should provide a large margin of safety to offset the impact of slowing sales.
I think it looks well prepared for a recession and at a reasonable price. With an expected dividend yield of 7%, I think this could be a good time to buy some stocks for a long-term portfolio.
Harbor Energy: too cheap?
North Sea oil and gas producer port power (LSE: HBR) divides investors. Some say that with shares trading at three times the expected earnings, this business is clearly too cheap.
Other investors might argue that most of the group’s fields are mature and that it will face large decommissioning costs in the coming years.
Oil prices may also fall and future financing is likely to be much more expensive than in the past. Interest rates are rising and investors are not as willing to lend money to oil producers as they used to be.
Harbor is about to pay off the mountain of debt it inherited from Premier Oil. I suspect that company management will then opt to hoard some cash while oil prices are high.
Overall, I think Harbor stock is probably a bit cheap right now, but I don’t think it’s a bargain.
However, the 7% dividend forecast for 2023 seems pretty safe to me, so I think Harbor is worth considering.
