In an unstable economic environment, dividends provide peace of mind.
When it comes to a low-risk investment, most investors tend to turn to dividend stocks. That’s in part because of the reassurance of a regular payday from your stocks, but it’s also because companies need to exhibit substantial and reliable profits if they are going to commit to a regular dividend cycle. The following nine stocks don’t just offer modest distributions to shareholders, however. While the typical S&P 500 component only yields about 1.4%, these stocks all yield at least 5%, and in one case, double digits. If you want the comfort of dividends but demand a high yield, consider one of these nine options.
AllianceBernstein Holding LP (ticker: AB)
Asset management firm AllianceBernstein offers research and investment services to wealthy individuals and institutional clients through pension services, trusts and estates, and 401(k) management. The company’s respected brand and expertise have helped it maintain an enviable track record over the years, and it continues to expand with average projections of 6.6% revenue growth in 2022 and 9.1% growth in 2023, according to Yahoo Finance. AB boasts $779 billion in assets under management and has the capital to weather any short-term disruptions in the global economy.
Dividend yield: 8.9%
Altria Group Inc. (MO)
Altria Group is one of the biggest tobacco operations in the world, producing brands like Marlboro cigarettes, Black & Mild pipe and cigar products, and smokeless tobacco such as Copenhagen and Skoal. Tracing its roots back almost 200 years, this Virginia company has an enviable history of 56 dividend increases in the past 52 years, proving its commitment to shareholders and its long-term income potential. And looking forward, the company is moving beyond tobacco with investments in legal marijuana operations as well as Juul vaping products to ensure continued success for years to come.
Dividend yield: 7.1%
EPR Properties (EPR)
EPR is structured as a real estate investment trust, or REIT. This special class of corporation must deliver 90% of its taxable income back to shareholders, meaning a mandate for big dividends. What makes EPR unique right now is its specialization in “enduring experiential properties,” as it likes to say in corporate literature. That translates to vacation resorts, theme parks, theaters and other entertainment-oriented properties. With all the pent-up wanderlust in the wake of COVID-19 and the warm weather right around the corner, it could be the perfect time to bank on this generous REIT to deliver a regular payday in 2022.
Dividend yield: 6.3%
FS KKR Capital Corp. (FSK)
FSK is a business development company. This category of stock specializes in financing investments, much like a publicly traded version of a private equity group or hedge fund. In FS KKR’s case, it invests primarily in senior secured debt, often buying this debt on the secondary market from other issuers. The company targets a wide range of enterprises, too, as it invests in companies with earnings before interest, taxes, depreciation and amortization from $25 million to $100 million. At the end of the day, you’re buying FSK for its expertise. Based on its generous dividend and a share price that is up about 6.4% in 2022 while the rest of Wall Street has struggled, that expertise might be worth adding to your portfolio.
Dividend yield: 10.9%
Gerdau SA (GGB)
Brazilian steelmaker Gerdau is a bit volatile, in part because it’s exposed to both the ups and downs of emerging markets across Latin America and the fluctuations in commodity prices. Business is booming right now, however, thanks to a recovery in industrial demand as the pandemic wanes and materials prices jump for steel billets, rebar, wire and specialty products including auto and appliance parts. GGB suspended its dividend during the pandemic downturn, but reinstated payouts at the end of 2020 and now has a large yield based on thriving operations amid inflationary pressures and growing customer demand.
Dividend yield: 8.6%
International Business Machines Corp. (IBM)
IBM may not be the most innovative tech stock out there, but it’s perhaps the oldest and most respected. The IBM brand is more than a century old, with roots in electric typewriters, calculators and other productivity devices that helped support the growth of the modern office. Nowadays, IBM competes to offer cloud platform and software solutions, including Red Hat open-source solutions and business automation powered by its Watson artificial intelligence. Shares have struggled to post the gains that we’ve seen in other tech stocks over the past few years, but one thing they do offer is a tremendous $1.64 quarterly dividend that should be comfortably sustainable.
Dividend yield: 5.3%
Oneok Inc. (OKE)
Oneok is a midstream energy company that processes, stores and transports natural gas. The company owns about 40,000 miles of pipelines and various terminals across the U.S. from Texas to North Dakota to Colorado. Founded in 1906, OKE has a well-run and low-risk business model that is mostly insulated from the volatility in natural gas markets because it is simply storing and transporting the fuel instead of drilling new wells or marketing it to consumers. OKE has shown strong performance lately in a rough market, but its real appeal to income investors is its tremendous dividend yield.
Dividend yield: 5.7%
Prospect Capital Corp. (PSEC)
Prospect Capital is another business development company focused on investment activity that is meant to deliver a nice return for shareholders. Specifically, PSEC specializes in middle-market companies, including later-stage financing, turnarounds and bridge transactions. In other words, these tend to be companies in need of an interim solution as they obtain longer-term loans. Right now the deals done by Prospect include investments in health care, real estate, financial and industrial firms. The result is a diversified income stream, which is passed on to shareholders via generous dividends.
Dividend yield: 8.9%
W. P. Carey Inc. (WPC)
W. P. Carey is a diversified net lease REIT. That means it collects rent checks from tenants but is not on the hook for upkeep and expenses such as maintenance, insurance or the like. Specializing in office and industrial space, WPC has roughly 1,300 properties that cover about 156 million square feet in U.S. and Europe. This massive operation is diversified across tenants, geography and facilities, adding up to a reliable operation that can help support consistent and generous dividend payments to shareholders.
Dividend yield: 5.3%
Nine high-yield dividend stocks to buy:
— AllianceBernstein Holding LP (AB)
— Altria Group Inc. (MO)
— EPR Properties (EPR)
— FS KKR Capital Corp. (FSK)
— Gerdau SA (GGB)
— International Business Machines Corp. (IBM)
— Oneok Inc. (OKE)
— Prospect Capital Corp. (PSEC)
— W. P. Carey Inc. (WPC)
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Update 03/15/22: This story was published at an earlier date and has been updated with new information.