With a new month as well as a new quarter underway — and with Brexit fears abating — it’s a great time for investors to reconfigure their portfolios. This includes income-oriented investors.
While dividend stocks are often intended to be held forever, there’s no reason to not seek out new high-dividend stocks to replace names that just aren’t paying out the way they should be.
That, or perhaps the dividend-friendly holding in question has simply gotten overextended and is ripe for some profit-taking.
Whatever the motivation, to help the hunt along, here’s a quick run-down of some of the market’s better high-dividend stocks right now.
In no certain order:
High-Dividend Stocks to Buy: Ares Capital Corporation (ARCC)
Dividend Yield: 10.7%
There’s no such thing as a perfect investment, but if there was, Ares Capital Corporation (NASDAQ:ARCC) could very likely be it. It’s got a rarely seen balance of growth, value and dividends that leaves little to be desired.
Ares Capital, as the name suggests, provides capital to middle-market companies. Its portfolio of companies is diverse, eliminating much of the income ebb and flow that may stem from economic cycles. And, ARCC has staff versed in the nuances of all industries. It wouldn’t be wrong to call it an all-weather organization.
Moreover, the trailing price-earnings ratio of 11 is fair, and its forward-looking P/E of 8.8 is plausible. It’s got the results to prove those low values aren’t merely transitory either. Most important, though, its yield of 10.73% easily qualifies it as one of the top high-dividend stocks available today.
High-Dividend Stocks to Buy: RR Donnelley & Sons Co (RRD)
Dividend Yield: 5.6%
With a yield of 5.6%, RR Donnelley & Sons Co (NASDAQ:RRD) isn’t exactly at the top of a list of high-dividend stocks. What it lacks in outright payout prowess though, it makes up for in reliability and likeability.
It’s paid a dividend every quarter for the past ten years, and although the quarterly payout of 26 cents per share of RRD hasn’t gone up since 2003, it hasn’t gone down either.
RR Donnelley & Sons, in simplest terms, provides printing services. Those who know it well will know that an increasingly digital world has created something of a fiscal headwind for the company. It’s handled it as well as can be expected, although it’s not been easy.
Regardless, new deals with HarperCollins and a hedge-fund technology outfit are just two of a few partnerships that should help the company start to move forward in a meaningful way again.
High-Dividend Stocks to Buy: The GEO Group Inc (GEO)
Dividend Yield: 7.5%
Most lists of high-dividend stocks to buy will include at least one real estate investment trust. Their structure is intended to efficiently serve that very purpose. Not many of those lists will include an off-the-beaten path REIT called The GEO Group Inc (NYSE:GEO), though.
In most regards, it’s an ideal niche; GEO manages prisons, domestically and overseas. As long as humans inhabit the planet, at least some of them will be breaking the law and put in prison for it.
The proof of that premise is in The GEO Group’s numbers. It’s going on ten straight years of revenue growth, and margins are getting wider as the organization scales up. The dividend has grown accordingly too, and right now it’s yielding a healthy 7.5%.
High-Dividend Stocks to Buy: Care Capital Properties Inc (CCP)
Dividend Yield: 8.4%
Speaking of REITs, Care Capital Properties Inc (NYSE:CCP) is another real estate investment trust that’s earned a spot on a short list of high-dividend stocks to buy, currently paying out 8.43% of its current value.
As the name semi-suggests, Care Capital Properties manages a portfolio of health care properties. It specializes in post-acute health care, or so-called skilled nursing facilities.
Like so many other REITs right now, CCP is paying out more than it’s actually generating as income; that’s why the dividend is so impressive. Unlike most of those other REITs though, Care Capital Properties is in a relatively recession-proof business and should move back to a healthier fiscal operation sooner than later.
High-Dividend Stocks to Buy: Vector Group Ltd (VGR)
Dividend Yield: 7.1%
Yes, cigarette smoking is on the decline as people shift to e-cigarettes or decide to outright kick the habit. Somehow though, cigarette maker Vector Group Ltd (NYSE:VGR) continues to grow the top and bottom line.
As was the case with RR Donnelley & Sons, the math doesn’t quite add up. VGR has been dishing out more in dividends than it’s been earning as operational net income. But between its cash stash and — here’s the secret — its real estate brokerage firm (the country’s fourth-largest), Vector Group should be able to keep up its impressive dividend growth for a long, long time.
Its current yield is a healthy 7.1%.
High-Dividend Stocks to Buy: Centurylink Inc (CTL)
Dividend Yield: 7%
Like Vector Group, Centurylink Inc (NYSE:CTL) is contending with a slight but persistent deterioration of its results. Unlike Vector Group though, Centurylink isn’t facing the serious uphill battle of a shrinking market. CTL, a telecom and internet service provider, merely has to contend with the entrenched likes of AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ).
It seems a daunting task to be sure, but Centurylink is more prepared to fight that fight than you might think.
The secret weapon: While the top line for CTL might be steadily (even if insignificantly) shrinking, the bottom line is getting bigger anyway, as Centurylink is making savvy acquisitions. Case in point: The company recently announced it would be acquiring assets of the company formerly known as Active Broadband Networks, giving Centurylink some new capacity to deliver cloud-based services.
CTL currently yields 7%, and its payout has been steady since 2013.
High-Dividend Stocks to Buy: Frontline Ltd. (FRO)
Dividend Yield: 20.7%
Frontline Ltd. (NYSE:FRO) is without a doubt the riskiest of the risky names on this list of high-dividend stocks to consider. But, with a trailing dividend yield of nearly 21%, it may just be worth the risk.
Frontline is an operator of a fleet of oil tankers. Back before 2011, it paid a dwindling dividend. For a myriad of reasons though — not the least of which is the oil meltdown that began in 2014 — FRO stopped paying them … that is, until December of last year. Since then it’s dished out 80 cents worth of dividends, and intends to keep doing the same.
What gives? Mostly the recovery of oil prices, which has made the oil-shipping business at least somewhat fruitful again.
If crude prices slip (and they’ve tumbled following the Brexit vote), that dividend could vanish with no warning. For investors with a strong bullish conviction about oil though, FRO is an interesting income-oriented speculation.
High-Dividend Stocks to Buy: Enviva Partners LP (EVA)
Dividend Yield: 8.8%
When most investors think of ideally-suited industries to pay reliable dividends, wood pellets usually don’t come to mind. But, maybe it should.
With a dividend yield of about 9%, Enviva Partners LP (NYSE:EVA) is among the most compelling of the high-dividend stocks that actually have a shot at sustaining that payout. Never heard of it? Don’t worry — a lot of other investors haven’t either. That’s because the lumber partnership as we know it (and the stock as we know it) didn’t come into existence until April of last year. It’s already logged three consecutively higher quarterly payouts, and presumably more are on the way.
The kicker: Not only does Enviva own six production plants and a marine terminal plant that integrates production and delivery, in early June the company announced a long-term off-take deal that guarantees a steady revenue stream from which to pay dividends.
High-Dividend Stocks to Buy: BGC Partners, Inc. (BGCP)
Dividend Yield: 7.25%
With concerns of an economic slowdown already keeping shares of investment and real estate broker BGC Partners, Inc. (NASDAQ:BGCP) in check since early 2015, fears of the post-Brexit fallout made BGCP one of the easier selling targets in the aftermath. The end result? BGCP has become one of the market’s more solid high-dividend stocks, with plenty of value and growth in tow.
Reality: Last year was a best-ever year for BGC Partners. The company drove $2.6 billion worth of revenue, and turned $127 million of it into a profit. The company only did $1.8 billion in sales the year before, and did just a hair better than a breakeven. This year is shaping up to be a nice growth year a well, with per-share profits projected to grow from last year’s 74 cents to 85 cents this year to 99 cents per share next year.
The company has simply been defying the odds, climbing the wall of worry and ramping up the dividend for the past few quarters. The current yield is a juicy 7.5%.
High-Dividend Stocks to Buy: Apollo Commercial Real Est. Finance Inc (ARI)
Dividend Yield: 11.4%
Last but not least, another REIT … Apollo Commercial Real Est. Finance Inc (NYSE:ARI).
There’s nothing especially special about ARI. The REIT (mostly) owns commercial real estate loans and related real estate debt.
Its portfolio is a nice mix of mortgage for residential rental property, hotels, and speculative or currently-unused and for-sale property. It’s this diversity, in fact, that makes ARI one of the more compelling high-dividend stocks available to income investors at this time.
Well, that and the fact that it’s well-managed. Apollo Commercial Real Est. Finance is one of the few REITs that’s also reliably profitable on an operational basis, and therefore not grinding away at its cash.
The reason you’d want to own this name over most other REITs, however, is the payout. It currently sports a dividend yield of 11.4%, and not only does it pay out religiously, it recently cranked the payout up. And more dividend hikes could be in the cards.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.