7 High Yield Dividend Stocks to Buy Now
Investing in high-yielding dividend stocks has always been great way to
grow your wealth.
Such stocks allow investors to profit in two ways: one, through potential
appreciation of the stock price, and two, through dividend distributions.
In fact, here are seven of the top high-yielding stocks you may want to
consider.
Better, many dividend paying companies also have a good amount of cash
and hand, and are typically strong companies with good prospects for long-
term growth.
Best of all, a dividend paying company often raises its dividend payout as it
grows. High-yielding stocks tend to have slower growth, but for those who
need income now, the cash comes in mighty handy.
Currently, the S&P 500 index averages a 1.35% yield, near historic lows.
That averages both high payers as well as companies that pay no dividend
at all. Investors who would like some income should buy some high-yielders
to round out their investment portfolio.
We’ve narrowed the list of hundreds of dividend paying stocks to seven of
the top high-yielding stocks you may want to consider buying now:
High Yielding Stock No. 1 – Verizon Communications (VZ) carries a dividend yield of 6.5%
Telecommunications stock Verizon Communications pays a dividend yield of
6.5%, currently the highest yielder in the S&P 500. It’s easy to see why.
It’s one of a handful of U.S. cellular carriers. Generally, companies that have
just a few competitors tend to be more profitable. And the cell networks are
no exception.
Plus, the business model for a network is to have a large number of
customers paying a recurring revenue.
While paying your monthly phone bill may be annoying, Verizon
shareholders are getting dividend checks from the company four times each
year! It certainly pays to be an owner of a company that earns and passes
through massive cash flows.
Verizon trades at about 18 times earnings, still a 25% discount to the price-
to-earnings ratio of the overall market.
High Yielding Stock No. 2 – Crown Castle International (CCI) has a
dividend yield of 6.0%
With a yield of 6.0%, Crown Castle is another telecom-related play.
However, CCI owns and operates cell towers.
That’s the key piece of infrastructure that connects smartphone users to the
cell network. And the tower operators may be a better business model than
the cell operators themselves.
Cell tower companies like Crown Castle even build automatic price
increases into their contracts, so each year they earn more money without
having to do more.
Crown Castle and other tower operators are structured as real estate
investment trusts (REITs). They pass through most of their income to their
shareholders, which can mean a hefty dividend payout.
That’s the case with Crown Castle, hence the hefty dividend. Investors
looking for current yield and lower volatility tend to find it with REIT
investments
High Yielding Stock No. 3 – Altria Group (MO) has a dividend yield of
7.3%
Demand for tobacco products isn’t what it used to be. However, tobacco
companies are a great investment.
Why? Because they make a product that has a low cost to manufacture, and
they can sell it for a tremendous markup. The high cash flows and profit
margins can mean big returns for patient investors.
Plus, there’s tremendous brand loyalty, which can allow companies to
charge even higher for some brands.
So it may be no surprise that Altria Group is a cash cow. It’s paying
investors a dividend yield of 7.3%, and the company has a sizable share
buyback program for the prodigious amounts of cash it generates.
And while tobacco use is declining, there is growth for smokeless tobacco
and vaping products. That provides a new source of revenue that will allow
the company to keep paying big yields for investors for decades to come.
High Yielding Stock No. 4 – Realty Income (O) carries a dividend yield of 5.6%
With years of dividend increases, Realty Income also pays out its dividends
monthly. They even copyrighted the phrase “The monthly dividend
company.”
Realty Income is a triple-net retailer. They own properties where the
tenants pay for all the bills.
Currently, Realty Income owns over 15,450 properties. Most tenants are
under long-term leases, and primarily come from commercial tenants
outside the office market.
While real estate related investments can be interest rate sensitive, that just
means that Realty Income shares can pay a higher dividend.
Over the past five years, shares have averaged a 4.5% dividend. Today’s
higher yield provides investors with a better return than average, and could
signal that shares are undervalued and capable of moving higher.
High Yielding Stock No. 5 – LyondellBasell Industries (LYB) carries a dividend yield of 6.0%
A global chemical company based out of Texas, LyondellBasell creates
everything from polymers, olefins, styrene, and other engineered chemical
and plastic products.
Those products are key components for nearly every manufactured good
today.
Of course, like any manufactured good, specialty chemicals can see some
big shifts in demand, depending on the state of the economy. That may be
part of LyondellBasell’s low valuation, which in turn has kept its dividend at
a juicy 6%.
Meanwhile, management is working on keeping its operations optimized,
which should help keep profits high. And they’re rolling out new
technologies such as an advanced catalytic recycling technology, which
could improve the quality and quantity of recyclable plastic.
LyonellBasell’s strong cash flow and earnings will allow it to continue
paying a hefty dividend while still investing in new technologies and
chemical processes.
High Yielding Stock No. 6 – Enterprise Products Partners (EPD) has a dividend yield of 6.6%
Pipeline companies like Enterprise Products Partners are a great way to
obtain a high income, and even offset inflation.
Enterprise Products Partners is one of the largest infrastructure companies
in North America. It owns and controls thousands of miles of oil and gas
pipelines, as well as terminals and facilities for liquefying natural gas.
Energy services such as pipelines tend to provide considerably cash flow for
investors, even if oil or natural gas prices fluctuate. Enterprise Products
Partners is no exception.
And with demand for energy remaining strong, and likely to rise as the
economy increases, shares can continue to make big payments to investors
for years.
With a dividend yield of 6.6%, Enterprise Products Partners already pays
well. But it’s also looking to increase its payout over time.
In fact, over the past five years, EPD has increased its dividend payout by
18%. So today’s investors can likely get a high yield and an upside in
shares.
High Yielding Stock No. 7 – Franklin Resources (BEN) carries a dividend yield of 5.7%
When the stock market is booming, financial services companies such as
asset managers can be big winners.
That could be the case with Franklin Resources, which is a diversified asset
management firm serving individuals and institutions, including the highly-
regarded Franklin Templeton brand of investment funds.
Over the past five years, Franklin has increased its assets under
management to $1.68 trillion, with 25% of that increase coming over the
past year amid a stock market boom. During the same time, Franklin was
able to increase its business in retirement planning and insurance products,
creating a fully in-house financial management service.
They’ve also acquired Putnam Investments and other assets, allowing them
to grow by acquisition.
In short, Franklin Resources is well positioned to build a leading position in
asset management, all while paying today’s investors a 5.7% dividend.