Don’t Overlook These Highly Ranked Dividend Stocks: LCUT, KRT, MGA, SFD
Among the Zacks Rank #1 (Strong Buy) list, several high-yielding dividend stocks are starting to stand out as they are benefiting from a positive trend of earnings estimate revisions, suggesting more upside is likely ahead.
These highly ranked stocks may not be your household names, but they shouldn’t be overlooked as they offer compelling investment potential and can help investors diversify meaningfully across several key sectors.
Lifetime Brands – LCUT
Stock Price: $6
We’ll start in the consumer discretionary sector with Lifetime Brands LCUT), a leading designer, marketer, and distributor of a variety of kitchenware and home solution products.
Lifetime’s products and services also support broader climate, natural-resource, and empowerment initiatives, aligning the company’s practices with established environmental, social, and governance (ESG) standards.
Trading under $10 a share, Lifetime’s stock is at the high end of a tight nit 52-week range ($2.89-$6.68) and offers a 2.71% annual dividend yield. That said, LCUT still trades at 10X forward earnings, a noticeable discount to its Zacks Consumer Products-Discretionary Industry average of 17X.
This comes as FY26 EPS estimates have spiked from $0.45 to $0.61 over the last 60 days. Furthermore, FY27 EPS estimates have risen to $0.78, from $0.60 two months ago. In addition to its strong buy rating, LCUT checks an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
Karat Packaging – KRT
Stock Price: $28
Next up is Karat Packaging KRT), hailing from the industrial products sector and offering an eye catching 6.4% annual dividend yield. Karat Packaging is a specialty distributor and manufacturer of disposable foodservice products and related items, and also offers customized solutions, including new product development and designs, printing, and logistics services.
Well positioned in the growing market for sustainable foodservice products, Karat’s FY26 and FY27 EPS estimates have spiked 20% and 15% over the last 60 days, respectively. Plus, KRT is at a 13X forward earnings multiple, offering a slight discount to its Zacks Containers-Paper and Packaging Industry average, and its dividend towers over its peers’ average of 2.45%.
While Karat has a payout ratio above 100%, management appears to be confident that it will be able to sustain its lofty dividend, most recently declaring a quarterly dividend of $0.45 per share. The company is currently paying out more in dividends than it generates in earnings, but EPS is now expected to increase 25% this year and is projected to rise another 13% in FY27 to $2.28.
Magna International – MGA
Stock Price: $54
Moving on to the auto sector, Magna International MGA) is appealing as a mobility technology company and global automotive supplier that offers comprehensive vehicle engineering and contract manufacturing expertise.
It’s rare to see auto sector stocks that offer high dividend yields, with Magna’s at 3.62%. Even better, MGA trades at 8X forward earnings compared to its Zacks Automotive-Original Equipment Industry average of 12X, and EPS is now expected to increase 19% in FY26 and is projected to spike another 17% in FY27 to $7.98.
In the last two months, Magna’s FY26 and FY27 EPS estimates have risen over 12%. Notably, Magna’s stock checks an overall “A” VGM Zacks Style Scores grade and has produced a total return of more than 80% in the last year when including dividends.
Smithfield Foods – SFD
Stock Price: $28
We’ll end in the consumer staples sector, with Smithfield Foods SFD), a pork producer and food-processing company. Considering surging oil prices are leading to recessionary fears, it’s noteworthy that consumer staples stocks, especially food companies, are historically strong performers during recessions and periods of market volatility.
Optimistically, SFD offers a 3.47% annual dividend yield, and its 10X forward P/E multiple is nicely beneath its Zacks Food-Meat Products Industry average of 12X. Better still, FY26 EPS estimates are up 11% in the last 60 days to $2.74, with FY27 EPS revisions rising 4% to $2.69 despite a small contraction expected on its bottom line next year.
SFD is at a 52-week high and has a total return of more than 60% in the last year when including dividends.
Bottom Line
The trend of positive EPS revisions suggests these highly ranked dividend stocks may be positioned for further gains, and they are likely to attract income-focused investors, especially with uncertainty still weighing on the market
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include
Stock #1: A Disruptive Force with Notable Growth and Resilience
Stock #2: Bullish Signs Signaling to Buy the Dip
Stock #3: One of the Most Compelling Investments in the Market
Stock #4: Leader In a Red-Hot Industry Poised for Growth
Stock #5: Modern Omni-Channel Platform Coiled to Spring
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.
See Our Newest 5 Stocks Set to Double Picks >>
Magna International Inc. (MGA) : Free Stock Analysis Report
Smithfield Foods, Inc. (SFD) : Free Stock Analysis Report
Lifetime Brands, Inc. (LCUT) : Free Stock Analysis Report
Karat Packaging Inc. (KRT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Discover more from stock updates now
Subscribe to get the latest posts sent to your email.
