The 25 Highest-Yielding Stocks

Dividend investing is popular again. Investors have taken to heart Jeremy Siegel's studies, which show that higher-yielding stocks tend to offer greater returns over time than low- or no-yield stocks.

The highest dividend yields can be very tantalizing. As long as a stock yielding 15% doesn't lose value, you'll make 15% in one year! In more cases than not, however, an astronomical yield is a bad sign for a stock. Since dividend yields and stock prices move in opposite directions, a high yield usually means that investors have begun to worry about the business, and driven down its stock price.

However, certain types of companies, such as REITs have to pay out most of their income as dividends, so their yields will be higher than "normal." Dividends are not guaranteed; you need to make sure that a business is generating enough cash to pay its dividend, or your investment could be disastrous.

I'm touring the market to screen for the highest-yielding stocks in each category. Today, we're looking at the market as a whole, screening for stocks with a market cap greater than $400 million.

Here are the top 25 highest yielding stocks the screen produced:

Rank

Company

Market Cap
(millions)

Dividend
Yield

1

American Capital Agency (Nasdaq: AGNC  )

$956

19.9%

2

Chimera Investment (NYSE: CIM  )

$3,444

17.5%

3

Annaly Capital Management (NYSE: NLY  )

$10,810

15.5%

4

Hatteras Financial (NYSE: HTS  )

$1,112

14.8%

5

Invesco Mortgage Capital. (NYSE: IVR  )

$542

14.3%

6

Anworth Mortgage Asset (NYSE: ANH  )

$843

14.2%

7

Cellcom Israel (NYSE: CEL  )

$2,857

13.3%

8

Partner Communications (Nasdaq: PTNR  )

$2,749

12.8%

9

Prospect Capital (Nasdaq: PSEC  )

$710

12.2%

10

Capstead Mortgage (NYSE: CMO  )

$844

12.1%

11

BlackRock Kelso Capital (Nasdaq: BKCC  )

$708

11.9%

12

Solar Capital (Nasdaq: SLRC  )

$672

11.9%

13

Telecom Corp. of New Zealand (NYSE: NZT  )

$2,879

11.5%

14

Walter Investment Management (NYSE: WAC  )

$459

11.3%

15

Teekay Tankers. (NYSE: TNK  )

$598

10.9%

16

Provident Energy Trust (NYSE: PVX  )

$1,777

10.4%

17

Encore Energy Partners (NYSE: ENP  )

$846

10.4%

18

MFA Financial (NYSE: MFA  )

$2,059

10.4%

19

BGC Partners (Nasdaq: BGCP  )

$498

10.3%

20

Calumet Specialty Products Partners LP (Nasdaq: CLMT  )

$630

10.2%

21

Terra Nitrogen (NYSE: TNH  )

$1,758

9.9%

22

Frontier Communications (NYSE: FTR  )

$7,668

9.8%

23

SeaDrill Limited (NYSE: SDRL  )

$10,087

9.8%

24

Frontline (NYSE: FRO  )

$2,453

9.6%

25

Alaska Communications Systems Group (Nasdaq: ALSK  )

$408

9.6%

Source: Capital IQ, a division of Standard & Poor's.

These stocks are a good place to start your research, but they're not formal recommendations. Remember, their seemingly irresistible yields could be ticking time bombs, so do your own due diligence. Also, make sure you diversify your picks across various sectors. As investors relearn every decade years or so, you never want to put all your eggs in one basket -- no matter how tempting the dividends are.

Interested in any of these stocks? Hungry for more? If you want more thoroughly vetted suggestions, check out Jordan DiPietro's "The Best Dividend Stock. Period." or Jim Royal's "Dividend Play for a Lifetime."

Dan Dzombak did not have a position in any of the companies mentioned in this article. Cellcom Israel is a Motley Fool Global Gains pick. Partner Communications is a Motley Fool Income Investor selection. Fool's disclosure policy loves it some dividends.


Read/Post Comments (4) | Recommend This Article (63)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 10, 2010, at 4:58 PM, revealedin71 wrote:

    You missed PDL BioPharma, Inc...at present pays a $1,00 dividend ($.50 every 6 months) for a present yield of 15.84%..Ticker symbol PDLI.

  • Report this Comment On August 10, 2010, at 6:22 PM, czelbst wrote:

    PDL BioPharma does not have a formal dividend policy, has only 7 employees, receives 100% of its revenue from licensing of patents that are due to expire in the coming three years, and is actively seeking to be acquired by anyone else. Great stock, I am long on it because I believe it will be picked up by big pharma, but it is a roll of the dice.

  • Report this Comment On August 10, 2010, at 6:41 PM, JFarina1976 wrote:

    Most of these stocks are indeed in the upper regions of the NYSE (see http://phoenixmir2.com/NYSE )

  • Report this Comment On August 13, 2010, at 4:45 PM, solarpowerman wrote:

    Thanks alot for another stupid article..... "ticking time bombs"....... helped to pull the majority down! Good job! Why not do some "due diligence" before articles.... of course, if you have your own "means to an end".... guess you accomplished! Dan.... don't own the stock.... but who pays you?????

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