The problem is, many “Old Reliable” dividend stocks like utilities are trading at premium valuations, while double-digit yields from more adventurous plays like dry bulk shippers and mortgage REITs might not be sustainable.
Unfortunately, if you want yield, you’re stuck with these options. So what you do from here is just a matter of risk tolerance.
If you’re a conservative investor, you’ll want to stick with “Old Reliable” stocks, but take heart — there’s still some decent yields to be had, even if they’re a little frothy.
But if you’re searching for dividend yields greater than 5%, you’re probably going to need to wade into the deeper end of the pool. Companies with those kinds of yields are usually in sectors that have fallen on hard times (like shipping) or investments that are inherently more volatile, like mREITs. These riskier plays may not be the best bet for income investors at or nearing retirement, but they’re not necessarily bad for everyone.
Here’s a look at three possible winners on both the safe and adventurous sides of the coin: