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 companies average a 1.35% yield. That averages both high payers as well as companies that pay no dividend at all.
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 6.7%
Telecommunications stock Verizon Communications pays a dividend yield of 6.7%.
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 15 times earnings, a 25% discount to the overall earnings of the overall market.
High Yielding Stock No. 2 – Crown Castle International (CCI) has a dividend yield of 6.3%
With a yield of 6.3%, Crown Castle owns and operates cell towers. That’s the key piece of infrastructure that connects smartphone users to the cell network.
With a yield of 6.3%, Crown Castle owns and operates cell towers. That’s the key piece of infrastructure that connects smartphone users to the cell network.
That may make the tower operators a better business model than the cell operators themselves. These companies 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, which may also benefit from the rollout of the 5G network.
High Yielding Stock No. 3 – Altria Group (MO) has a dividend yield of 8.7%
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.
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 8.7%, and the company has a sizable share buyback program too.
And while tobacco use is declining, there is growth for smokeless tobacco and vaping products. That could provide 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 – Universal Corp. (UVV) carries a dividend yield of 6.0%
Tobacco company Universal Corp. carries a yield of 6.0%.
As with Altria Group, tobacco companies offer high yields. They produce a product with a high profit margin.
While growth has slowed in recent decades given the health concerns over smoking, Universal has been able to still pay out handsomely for investors. And the rise of vaping and e-cigarettes is creating a new market for more health-conscious smokers.
Today, Universal shares trade under their book value, and at about half their price-to-sales ratio. So there could be some upside potential in addition to the big dividend payment now.
Plus, Universal has a history of growing its dividend payout over time. So those who buy today could see even more income coming in tomorrow.
High Yielding Stock No. 6 – Kinder Morgan (KMI) has a dividend yield of 6.2%
Pipeline companies like Kinder Morgan are a great way to offset inflation.
Kinder Morgan 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.
Energy tends to provide considerably cash flow for investors. Kinder Morgan 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 6.2%, Kinder Morgan already pays well. But it’s also looking to increase its payout over time. So today’s investors can likely get a high yield and an upside in shares.
High Yielding Stock No. 7 – Pfizer (PFE) carries a dividend yield of 6.0%
Drugmakers have been out of favor with the market lately. That’s pushed prices down, but the dividend yields on drugmakers up.
For investors in companies like Pfizer (PFE), that could be great news. Besides trading at about half the overall market’s valuation, shares pay a hefty 6% dividend, more about four times more than the S&P 500’s yield.
Pfizer develops and manufactures a number of products, both as generics and under brand names. Typically, brand name drugs have higher margin, but in time will become generic as patents expire.
Since the pharmaceutical market can be cyclical, Pfizer shares could see some sizeable gains in the coming years as the stock comes back into favor.
Today’s buyers can lock in a high yield, and likely see higher payouts over time as earnings increase.