These are 6 high-yield stocks with good upside potential. The main criteria I looked for with these stocks is a dividend over 5% annually where the earnings more than cover the dividends.

This is known as the dividend coverage ratio. Typically, I’m looking for no more than 35% to 45% as a dividend coverage ratio. In addition, the stock has to have an ongoing quarterly dividend that works out to an annual 5% dividend yield.

In addition, I wanted to find stocks that also have good upside potential. I measured this by assuming that earnings will be stable or growing over the next year. This screens out stocks that have lower earnings forecasts or that appear to be trading over their inherent true value.

Let’s dive in and look at these stocks.

DVN	Devon Energy	$54.66
STOR	Store Capital	$26.75
LYB	LyondellBasell Industries	$87.81
SRC	Spirit Realty Capital	$38.55
ET	Energy Transfer	$9.89
KT	KT Corp	$14.33

Devon Energy (DVN)

Dividend Yield: 7.3%

Devon Energy (NYSE:DVN) recently raised its fixed and variable dividend to $1.27 quarterly, giving it a minimum 9.24% yield on an ongoing basis.

However, given that oil has come down from its highs, I estimate the variable portion of its dividend has fallen about 25%. The variable portion was $1.11 of the total $1.27 quarterly dividend. This is because the free cash flow portion allocated to the dividend last quarter was $732 million, and I now estimate it will be about $550 million.

With 658 million shares outstanding after buybacks, that brings the variable quarterly dividend to 84 cents. Combined with the fixed dividend of 16 cents, DVN stock has an expected quarterly dividend rate of $1.00.

That brings the total annual run-rate dividend to $4.00 and its yield expected going forward to 7.3%, making this one of the high-yield stocks worth buying for the time being.

Analysts expect that its 2022 earnings per share will reach $8.85 per share. That puts it on a very inexpensive multiple of 6.2. Moreover, 2023 earnings are forecast to stay high at $9.33 per share. For that to happen, oil and gas prices have to stay close to where they are today.

Store Capital (STOR)

Yield: 6%

Store Capital Corporation (NYSE:STOR) is a real estate investment trust (REIT) and a leasing company of single-tenant store offices. Its stock is down 21.5% year-to-date. With its $1.54 annual dividend, Store Capital’s yield is 6%.

By comparison, its four-year dividend yield average was 4.56%, according to Seeking Alpha. This is despite the fact that the dividend has risen every year for the past seven years.

STOR stock is likely to rise to a point where its dividend yield falls to its historical average. That implies a potential gain of 26.3% to $33.77 per share. This can be seen by dividing $1.54 by 4.56%.

Moreover, Store Capital’s earnings cover the $1.54 annual dividend. Its earnings are measured by its funds from operations (FFO).

For example, analysts forecast its 2022 FFO will be $2.17 in 2022 and $2.24 in 2023. That shows that the company’s earnings are set to grow, despite a potential recession. The bottom line is that this makes STOR stock one of the best high-yield stocks on this list.

LyondellBasell Industries (LYB)

Yield: 5.6%

LyondellBasell Industries (NYSE:LYB) is a global chemical company that makes plastics and composites. It pays an annual $4.76 dividend annually which is well covered by its earnings. Its dividend yield works out to 5.63% based on its current price.

Analysts forecast earnings for 2022 of $16.78 per share. This more than covers the $4.76 dividend per share. Its earnings appear to be fairly stable for now, despite fears of a recession. Earnings projected for 2023 are $16.47, down just 1.8%.

The advantage of buying this high-yield stock is that it is essentially a cyclical play. Once fears of recession abate, perhaps later this year after the Federal Reserve stops raising interest rates, the stock will rebound.

This makes LYB stock one of the more interesting high-yield stocks to buy for the long term.

Spirit Realty Capital (SRC)

Dividend Yield: 6.7%

Spirit Realty Capital (NYSE:SRC) is a well-diversified single-tenant REIT operator with leases in 48 states and a market capitalization of $5.2 billion. The REIT pays an annual dividend of $2.552 which was recently raised by management to this level. This gives the stock an attractive yield of 6.69%.

Moreover, the company’s earnings as seen in its FFO (funds from operations) forecast by analysts is more than sufficient to cover the dividends.

The $3.66 per share FFO forecast for 2022 is forecast to grow 2.46% to $3.75 per share in 2023. That shows the potential upside for the stock, despite fears of a recession. This makes SRC stock one of the top high-yield stocks for investors to own.

Energy Transfer (ET)

Dividend Yield: 7.7%

Energy Transfer LP (NYSE:ET) is a natural gas pipeline company that provides natural gas to electric utilities and other industrial companies. The company is forecast to earn $1.49 this year and then $1.59 for 2023, according to analysts, for an implied growth rate of 6.7%.

These earnings more than cover the company’s annual 80-cent dividend. This also gives ET stock a dividend yield of 7.71% at today’s price.

This makes this energy company of the best high-yield stocks to own for the coming year, especially if a recession hits.

KT Corp (KT)

Dividend Yield: 5.2%

KT Corporation (NYSE:KT) is a South Korean telecom and platform services company. It is forecast to show positive earnings growth in 2022 and 2023.

Its $2.23 EPS forecast for 2022 more than cover its annual dividend payment of approximately 75 cents per share. Moreover, the dividend gives KT stock a 5.2% dividend yield at its price today.

Analysts also forecast that its earnings will rise modestly by 3.1% in 2023, ensuring that the dividend can continue to be paid.

Including a non-US telecom stock in the mix is an easy way to diversify an investor’s portfolio of high-yield stocks. This country is a solid ally of the U.S. and there are no issues with its accounting integrity, as sometimes there are with Chinese stocks.

On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.