The Nasdaq-100 index is where you’ll find many thriving growth stocks. It’s home to nine out of the ten largest companies by market capitalization, all of which are part of the billion-dollar valuation group. Interestingly, this index also houses several stocks that consistently pay generous dividends.
High dividend payouts can be particularly beneficial for shareholders, provided they are deliberate and backed by robust cash earnings. However, it’s essential to note that in certain circumstances, high dividend yields can arise when the same stock’s market value decreases. Such elevated returns might lead some investors to perceive them as a warning signal of financially distressed companies.
To examine the three companies within the Nasdaq-100 that offer the highest dividends, as of July 18: Are these firms thriving powerhouses with surplus funds at their disposal, or are they struggling titans grappling with significant problems?
1. Kraft Heinz: 5.7% dividend yield
The food conglomerate Kraft Heinz (KHC) currently provides the highest dividend yield among its peers, with no other competitor coming particularly close.
Kraft Heinz consistently maintained a high return on investment, with an average of 4.6% over the past five years. However, its stock prices have recently fallen, causing a significant increase in its yield over the past 52 weeks.
In simple terms, the company that produces your favorite ketchup, hot dogs, and processed cheese has experienced a plateau in its sales growth over the past half year. Despite this, Kraft Heinz remains an efficient money maker, turning 12% of its revenue into free cash flow, which is slightly higher than the 11% it was generating six years ago, even before the COVID-19 pandemic caused significant changes in consumer behavior.
This particular stock appears to be underpriced at the moment, as it trades for only 10.4 times its free cash flow and 0.7 times its book value. These valuation ratios are relatively low, even within the conservative sector of packaged food manufacturers. Despite facing the same economic challenges that other companies are dealing with, Kraft Heinz boasts an exceptional collection of food brands. I believe it’s worth considering purchasing Kraft Heinz shares at a discount due to its attractive dividend yield.
2. PepsiCo: 3.9% yield
I haven’t plans to vacate the food market just yet. Next up on our list is PepsiCo (PEP), a renowned producer of soft drinks and snacks with an illustrious history.
The latest enhancement in the dividend is more pronounced compared to the rise experienced by Kraft Heinz. Since the summer of 2020, PepsiCo’s yield has been consistently around 2.9%, and there’s been a significant increase of approximately 34% over the past year.
Last year, the company encountered challenges with managing its inventory, leading to relatively stagnant sales since mid-2023. It appears that an exceptionally well-regarded consumer goods enterprise is currently grappling with maintaining its own high-quality benchmarks.
In simpler terms, this scenario seems similar to the Kraft Heinz case. Investors who are keen on seizing opportunities might find success over time by purchasing PepsiCo stocks during this prolonged price decrease.
3. Comcast: 3.8% yield
I’m noting down Comcast (CMCSA), a dominant force in the entertainment industry, currently offering dividend yields that surpass its historical norms.
Once more, we see falling stock prices leading to attractive dividend payouts. However, it’s important to clarify that Comcast is not currently facing financial difficulties.
The recently opened Epic Universe theme park at Universal Orlando resort by Comcast is expected to revitalize their struggling theme parks sector. The Universal movie studio section has been successful with films like “Jurassic World: Rebirth” and the live-action adaptation of “How to Train Your Dragon.” At the same time, Comcast’s extensive connectivity and platform division serves as a strong financial foundation for further growth endeavors.
To put it another way, even though I’ve already mentioned it, it’s worth noting that Comcast might be an excellent investment opportunity given its current low price. Despite the rapid evolution of the entertainment industry, Universal is holding its ground and fighting fiercely for its position.
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2025-07-20 19:51