McCormick & Company, Incorporated (MKC): Among the Best High Yield Stocks to Buy in April for Dividend Capture

We recently published a list of Dividend Capture Strategy: 15 High Yield Stocks to Buy in April. In this article, we are going to take a look at where McCormick & Company, Incorporated (NYSE:MKC) stands against other best high yield stocks to buy in April.

Dividend investing appears to be a simple strategy on the surface, but in reality, it requires a much deeper analysis. These stocks are best known for their long-term appeal, a trait recognized by seasoned investors. Over the years, dividend growth stocks have outperformed other asset classes during periods of economic downturns.

This can also be observed in today’s economic landscape. With the Trump administration’s trade war or soft economic data, dividend stocks have the potential to outperform, according to analysts. In addition, these equities are currently trading at lower price-to-earnings ratios than the broader market, which could be a great entry point for income investors. Wolfe Research analyst Chris Senyek also advised investors to pay attention to dividend growth stocks as they can serve as a buffer against market downturns. Here is what he said:

“Our favorite defensive dividend strategy, dividend aristocrats, is a good place for investors to ‘hide’ in the event of an economic slowdown or recessionary environment.”

For this, he recommends investing in the Dividend Aristocrats Index, which tracks the performance of companies that have achieved 25 consecutive years of dividend growth. The index is outperforming the broader market this year, surging by over 2%, compared to the market’s nearly 5% decline.

Though dividend aristocrats are gaining this year, their performance in the last two years has been less impressive. With AI taking center stage, dividend stocks were overlooked by investors, leaving many still trading at a discount. Analysts are presenting a strong outlook for dividend stocks this year because of the changing economic and political landscape. According to a report by BNY Investments, dividend stocks are poised for growth this year as tech stocks have also entered into the dividend territory last year. Combining factors of growth and income can bode well for dividend equities. As of September 2024, nearly 80% of the companies in the S&P index pay dividends to shareholders, 24% of which are from the tech sector. The percentage has grown significantly from 13% a decade ago, as reported by BNY.

Dividend yield is an important aspect of dividend investing, and investors often pay attention to yields when making investment decisions. However, falling for yield traps does more harm than good. Dan Lefkovitz, a strategist for Morningstar Indexes, made the following comment for investors with a preference for high yields:

“It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield. Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to screen for dividend durability and reliability going forward.”

While dividend stocks are mostly known for their long-term appeal, some investors also reap profits in the short term through a dividend capture strategy. By using this approach, investors can buy shares of the company just before it pays dividends and then sell those shares shortly after receiving the dividend. The main aim of this strategy is to capitalize on dividend income while also benefiting from a stock’s price increase leading up to the dividend announcement. Given this, we will take a look at some of the best dividend stocks for a dividend capture strategy.

Our Methodology:

For this list, we selected dividend stocks that will trade ex-dividend in April 2025. Ex-dividend date indicates the cutoff day to buy a stock to receive its upcoming dividend payment. These stocks have dividend yields above 2%, as of March 30. The stocks are ranked according to their ex-dividend dates.

At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

McCormick & Company, Incorporated (NYSE:MKC)

Ex-Dividend Date: April 7

Dividend Yield as of March 30: 2.21%

McCormick & Company, Incorporated (NYSE:MKC) is an American food company, headquartered in Maryland. The company deals in flavoring products used in a wide variety of beverages. The company’s business is divided into two main segments: Consumer and Flavor Solutions. The Consumer segment, which serves households directly, benefits from higher profit margins. Meanwhile, the Flavor Solutions segment supplies flavors to food manufacturers and food service providers. Although this division operates with lower profitability, it plays a crucial role in driving long-term revenue growth. In recent years, McCormick has prioritized expanding its brand portfolio and reinforcing its presence in global markets. Since the start of 2025, the stock has delivered a 7.35% return to shareholders.

In the first quarter of 2025, McCormick & Company, Incorporated (NYSE:MKC) reported revenue of $1.6 billion, which grew by nearly 1% from the same period last year. However, the revenue missed analysts’ estimates by $8.6 million. The company reported an operating income of $225 million, down from $234 million in the same period the previous year. On an adjusted basis, operating income stood at $225 million, compared to $238 million a year earlier. Its net income of $162.3 million also declined by 2.2% from the prior-year period.

Despite reporting losses on various fronts, McCormick & Company, Incorporated (NYSE:MKC)’s cash position remained somehow stable. The company ended the quarter with $103 million available in cash and cash equivalents and generated $115.5 million in operating cash flow. Due to this cash position, the company is recognized as a strong dividend payer, with 39 consecutive years of dividend growth under its belt. Currently, it pays a quarterly dividend of $0.45 per share for a dividend yield of 2.21%, as of March 30.

Overall, MKC ranks 10th on our list of the best the best high yield stocks for a dividend capture strategy. While we acknowledge the potential of MKC as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than MKC but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.