To The Moon

Investors looking for great dividend stocks are having a tough time these days. Yields are low, and most of the stocks paying higher yields come with more risk, as well. Risk is usually a no-go for income investors, especially retirees. These two dividend stocks are flying under the radar with healthy yields and stable cash flows.

Newell Brands

Newell Brands (NASDAQ:NWL) is a great dividend stock that's being overlooked by the market. For most income investors, stability and cash flow are the two most important characteristics that a stock can have. That's exactly where this one shines.

The name Newell Brands might not be familiar to many consumers, but the company has a portfolio absolutely full of iconic brands. Newell produces a vast array of consumer and commercial products under brand names that include Rubbermaid, Oster, Sunbeam, Crock Pot, Elmer's, Expo, Sharpie, Paper Mate, Coleman, Marmot, Graco, and Yankee Candle. Newell's products are sold on six continents, with 35% of its revenue coming from international sources. Its largest customer is Walmart (NYSE:WMT), which only accounts for 15% of sales.

Newell is a diversified leader in consumer staples. It's unlikely that the market for its portfolio of products will change drastically in any short time frame. That creates long-term stability, and it also makes the business fairly resilient across economic cycles. It's never going to be an exciting high-growth stock, but that's not the priority for income investing.

Newell Brands also passes the tests for dividend sustainability. Last year, the company's cash distributions to shareholders were around $400 million. Newell produced roughly $600 million in free cash flow during the period. That included an abnormally large $350 million in cash spent on an inventory buildup, which the company attributed to preparation for sales growth. With a dividend payout ratio below 70%, Newell seems to generate plenty of cash to support its dividend.

It's also reasonable. The company's long-term debt-to-equity ratio is 1.2, which is completely manageable and normal for this sort of mature, diversified company. Newell reduced its financial leverage during 2021, and its net debt is down to $4.4 billion -- only $3 million of which is due in 2022. In a pinch, Newell has an additional $2 billion in liquidity available. This level of financial health suggests that the dividend won't be jeopardized if unexpected disruptions hit the business.

Newell's 3.97% dividend yield is strong in today's market. The market could be favoring Dividend Aristocrats and other blue chips that have a more consistent history of dividend growth. Newell Brands hasn't increased its quarterly distribution since 2017. It still represents a great opportunity for immediate investment income, and there's certainly potential for those dividends to grow in the next few years.

Greif

Greif (NYSE:GEF) is an industrial packaging leader that makes products such as barrels, drums, corrugated boxes, bulk containers, bags, adhesives, and rolls. It also provides some packaging services, which contributes roughly 40% of the company's total revenue. Greif operates in 40 different countries all over the world, and its customers include businesses of all sizes.

Greif's product line is just about completely commoditized, so the opportunity for growth is limited. What it lacks in growth opportunities, it makes up for in stability. This is a highly diversified company that provides basic products and services that will always be demanded by manufacturing, industrial, and basic material businesses. Greif needs to contend with competitors, but it fills a market niche with extreme staying power.

Unlike Newell Brands, Grief's financial results are influenced more heavily by economic cycles. Its sales tend to be weak when its customers pull back on capital spending during recessions. However, cyclicality is a short-term issue. The long-term trend has been consistently positive.

GEF Revenue (TTM) data by YCharts

Greif is paying a 3% dividend yield right now, which is roughly $27 million in quarterly distributions to shareholders. The company is forecasting free cash flow around $400 million for the full year, so that should be more than enough to cover the dividend -- its payout ratio is under 30%. Greif reported a 35% increase in sales and gross margin last quarter, but earnings are expected to rise around 3% this year. There's room for the dividend to grow modestly over the next few years.

Greif's long-term debt-to-equity ratio is around 1.4. Its short-term debt is around $170 million, which is manageable, based on the company's cash and projected cash flows. That's strong enough financial health to feel confident about its dividend stability.