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.

Three months ago, I ran a screen for the highest-yielding stocks, and it got such a good reception that I'm doing it again this quarter. The only limitation I've set this time is that the dividend stocks must have a market cap greater than $500 million.

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

 

Company Name

Market Cap (millions)

Dividend Yield

1

PDL BioPharma (Nasdaq: PDLI  )

$703

       19.9%

2

Cypress Sharpridge Investments (NYSE: CYS  )

$975

       19.6%

3

American Capital Agency (Nasdaq: AGNC  )

$2,574

       19.2%

4

Invesco Mortgage Capital (NYSE: IVR  )

$1,098

       17.2%

5

Chimera Investment (NYSE: CIM  )

$4,262

       16.4%

6

Annaly Capital Management (NYSE: NLY  )

$12,513

       14.7%

7

Hatteras Financial (NYSE: HTS  )

$1,631

       13.8%

8

Anworth Mortgage Asset (NYSE: ANH  )

$835

       12.7%

9

Capstead Mortgage (NYSE: CMO  )

$900

       12.2%

10

World Wrestling Entertainment (NYSE: WWE  )

$906

       11.8%

11

MFA Financial (NYSE: MFA  )

$2,341

       11.3%

12

Cellcom Israel (NYSE: CEL  )

$3,180

       10.9%

13

Teekay Tankers (NYSE: TNK  )

$691

       10.9%

14

BlackRock Kelso Capital (Nasdaq: BKCC  )

$865

       10.6%

15

Prospect Capital (Nasdaq: PSEC  )

$1,055

       10.1%

16

Solar Capital (Nasdaq: SLRC  )

$910

        9.6%

17

Vector Group (NYSE: VGR  )

$1,259

       9.5%

18

Navios Maritime Partners (NYSE: NMM  )

$987

       8.8%

19

Encore Energy Partners (NYSE: ENP  )

$1,043

        8.7%

20

BP Prudhoe Bay Royalty Trust (NYSE: BPT  )

$2,373

       8.7%

21

Consolidated Communications (Nasdaq: CNSL  )

$546

       8.5%

22

Calumet Specialty Products Partners LP (Nasdaq: CLMT  )

$821

       8.1%

23

Knightsbridge Tankers (Nasdaq: VLCC.F  )

$609

       8.0%

24

Ares Capital (Nasdaq: ARCC  )

$3,395

       8.0%

25

Frontier Communications (NYSE: FTR  )

$9,392

       7.9%

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 or so, you never want to put all your eggs in one basket -- no matter how tempting the dividends are.

For a basket of some high-yield dividend opportunities, click here to get The Motley Fool's five-page free report: "13 High-Yielding Stocks to Buy Today."

Dan Dzombak's musings and articles he finds interesting can be found on his Twitter account: @DanDzombak.

The Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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