2 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Core Viewpoint - The article highlights the attractiveness of International Business Machines (IBM) and Darden Restaurants as reliable dividend-paying stocks that can provide inflation-beating payouts for investors in the current market environment [1]. Group 1: Dividend Yields Comparison - The average American savings account offers an annual percentage yield of approximately 0.5%, while the S&P 500 has an average dividend yield of 1.6% over the last five years, currently at 1.3% [2]. - Darden shares offer a dividend yield of 3.5%, and IBM's stock has a yield of 3.1%, both of which exceed the government's long-term inflation target of about 2% per year [2]. Group 2: Company Profiles and Financial Health - IBM is a leader in the computing sector, recently establishing a promising artificial intelligence business, while Darden operates full-service restaurant chains like Olive Garden and is expanding internationally [3]. - Both companies are experiencing sales growth and generating strong cash profits, with a commitment to returning cash flows to investors through dividends [3]. Group 3: Cash Flow and Dividend Policies - IBM generated $12.4 billion in free cash flows over the last four quarters, allocating 49% of that to dividends, while Darden used 64% of its $992 million free cash flow for dividends [4]. - Both companies' dividend policies are fully funded by current cash profits, indicating they have the capacity to grow dividends without financial strain [4]. Group 4: Investment Opportunity - Darden and IBM are established leaders in their industries with solid growth plans, and their stocks appear affordable compared to competitors, making them attractive for locking in high dividend yields and potential price appreciation [5]. - Both companies have a long history, with Darden nearly a century old and IBM even older, suggesting they are likely to continue generating income for shareholders through generous dividend policies [6].