3 Growth Stocks with Above Market Dividend Yields

As the market has gravitated towards value stocks in recent months, many high-growth companies with rich valuations have come under attack. Stocks with more modest growth profiles have fared relatively well. But what if investors could have their cake and eat it too?

There are several companies out there that fall under the growth style of investing that also offer above-average dividend yields. Considering the current dividend yield of the benchmark S&P 500 as the average (roughly 1.5%) here are three of those rare growth stocks that come with a sizeable dividend cushion.

 What is a Good Large Cap Growth Stock?

Qualcomm (NASDAQ:QCOM) presently offers the highest dividend yield (2%) among S&P 500 "pure growth" names. Due in large part to the debut of 5G phones worldwide, revenue growth topped 80% last quarter as the company kicked off its new fiscal year. Being a supplier for Apple's iPhone 12 lineup certainly helps.

Looking ahead, the growth will be derived from sales of semiconductor chips used in mobile phones, tablets, computers and wireless infrastructure. Although the imminent and largest growth opportunity for Qualcomm is the buildout of 5G networking and phones, it will still be making plenty of money from royalties and licensing related to its 3G and 4G technology. These streams will provide a steady revenue base that compliments the higher growth 5G business.

While there are plenty of competitors clamoring for a slice of the massive 5G opportunity, Qualcomm will undoubtedly get a significant piece of the action due to its reputation, relationships, and competitively priced products. As 5G phones become mainstream, Qualcomm's growth will likely take off. So too could its dividend. This may give investors a desirable combination of long-term growth and value.

Will Williams Sonoma Continue to Grow?

Switching over to the mid-cap space, Williams Sonoma (NYSE:WSM) stock comes with a 1.6% dividend yield. A solid track record of growth at the specialty retailer has supported its ability to boost its dividend in each of the last eight years.

In the age of accelerating e-commerce growth, Williams Sonoma may seem like an unlikely winner, but it may actually be the poster child for how to strike a balance between brick-and-mortar and online retail growth. It operates more than 600 physical stores across the U.S., U.K., and Australia under its namesake, Pottery Barn, and other home goods brands. These are the anchor for the company's booming e-commerce presence and catalog business.

In the pandemic-driven economy of fiscal 2020 online sales exceeded those of traditional retail. And the shift to an e-commerce led model suits the company just fine because its websites generate higher profit margins than its stores.

Increased consumer awareness of Williams Sonoma's online storefronts should continue to drive growth as people look to spruce up their homes with unique merchandise. Looking past the favorable pandemic effect, a successful social media campaign, exposure to Millennial and GenZ shoppers, and international expansion are expected to support future growth. This makes Williams Sonoma an attractive consumer discretionary stock with which to decorate a portfolio.

 Is Insperity a Good Stock to Own?

Insperity (NYSE:NSP) is another mid-cap play that offers a blend of growth and income. The provider of HR and small business services pays out roughly half of its net income as dividends. Last month it hiked its quarterly dividend by a dime boosting its forward yield to 1.7%.

While an employment-related stock may not get the blood boiling for some investors, Insperity has some interesting growth prospects. Alongside an improving jobs market, the professional employer organization (PEO) space is heating up.

Demand from smaller businesses for outsourcing firms and solutions is taking off. Companies shaken by the pandemic and looking to outperform are seeking out ways to outdo the competition. Insperity's Workforce Optimization and Workforce Synchronization offerings are becoming popular solutions for getting the most out of employees whether working in offices or remotely—and cutting costs in the process. The cloud-based Insperity Premier platform for human capital management is also getting some attention and contributing to sales growth.

Simply put, Insperity helps small businesses run smoother and make more money. Its customers tend to operate in industries that have low worker's compensation and unemployment risk like technology, engineering, medical services, banking, and light manufacturing companies.

Insperity now serves over 100,000 small and medium sized U.S. businesses that have employee counts ranging from five to 5,000. Its solutions run the gamut of HR needs including recruiting, insurance, accounting, employee scheduling, and performance reviews. This balanced customer profile has driven some sizeable earnings beats in the last few quarters—and has analysts expecting strong growth ahead.

The consensus expectations for revenue and earnings growth in fiscal 2022 are 10% and 24%, respectively. This level of growth along with a growing dividend and active share buyback program make Insperity a name to own for growth and income.