The 25 Highest-Yielding Dividend Stocks in June

Here are the 25 top dividend-paying stocks this month.

Jun 6, 2014 at 6:33PM

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-paying dividend stocks can be very tantalizing. So 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. Given that dividend yields and stock prices move in opposite directions, a high yield usually means investors have begun to worry about the business and driven down its stock price.

However, certain types of companies such as real-estate investment trusts must 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 ran a screen for the highest-paying regular dividend stocks; the only limitations I've set this time is that the dividend stocks must have a market cap greater than $500 million, must be primarily listed in the U.S. (no American depositary receipts), and must be corporations (no REITs , BDCs , LPs, MLPs , or LLCs).

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

Rank

Company Name

Market Cap (millions)

Dividend Yield

1

Windstream (NASDAQ:WIN)

$5,798

10.4%

2

Ship Finance International (NYSE:SFL)(NYSE:SFL)

$1,750

8.7%

3

Vector Group (NYSE:VGR)

$1,989

8%

4

Consolidated Communications (NASDAQ:CNSL)

$804

7.8%

5

Diamond Offshore Drilling (NYSE:DO)

$6,546

7.3%

6

Transocean (NYSE:RIG)

$15,156

7.2%

7

Clear Channel Outdoor (NYSE:CCO)

$2,849

7%

8

TPG Specialty Lending (NYSE:TSLX)

$1,198

7%

9

HollyFrontier (NYSE:HFC)

$9,519

6.9%

10

Frontier Communications (NASDAQ:FTR)(NASDAQ:FTR)

$5,823

6.8%

11

TAL International Group (NYSE:TAL)

$1,473

6.6%

12

R.R. Donnelley & Sons (NASDAQ:RRD)

$3,158

6.6%

13

CVR Energy (NYSE:CVI)

$4,015

6.5%

14

New York Community Bancorp (NYSE:NYCB)

$6,875

6.4%

15

PDL BioPharma (NASDAQ:PDLI)

$1,518

6.4%

16

Seaspan (NYSE:SSW)

$2,135

6%

17

Capitol Federal Financial (NASDAQ:CFFN)(NASDAQ:CFFN)

$1,735

6%

18

W&T Offshore (NYSE:WTI)

$1,068

5.8%

19

CenturyLink (NYSE:CTL)

$21,782

5.7%

20

Ensco (NYSE:ESV)

$12,483

5.7%

21

Quad/Graphics (NYSE:QUAD)

$1,039

5.6%

22

Navios Maritime Acquisition (NYSE:NNA)

$538

5.6%

23

National CineMedia (NASDAQ:NCMI)

$971

5.5%

24

OneBeacon Insurance Group (NYSE:OB)

$1,457

5.5%

25

Newmont Mining (NYSE:NEM)

$11,411

5.4%

Source: S&P Capital IQ as of June 5, 2014.

Note: These stocks are a good place to start your research, but they're not formal recommendations.

Windstream was covered last month. The company has a heavy debt load, is trying to transform its business, and at the same time is working to maintain its dividend in the face of falling revenue. If the company can execute on its transformation and maintain its dividend, the stock looks fairly valued. The risk for shareholders is that if the company has to cut its dividend, the stock will be crushed, because so many people hold shares for the payout. On the flip side, once the stock was crushed, it could be a good opportunity to pick up shares, as the company would be able to take whatever action needed with the spare cash. Given the risk of a dividend cut, I would keep the stock on my watchlist for now.

Ship Finance International was covered in November. After a review, I decided it should go in the "too hard" bin, given its high leverage and dealings with interrelated companies also owned by Norwegian shipping magnate John Fredriksen.

Vector Group was covered a year ago. Vector Group has steadily raised its dividend over the past 19 years, but it has always paid out more in dividends than it brings in through free cash flow. The company currently pays out over 400% of its free cash flow as dividends.

VGR Cash Dividend Payout Ratio (Annual) Chart

VGR Cash Dividend Payout Ratio (Annual) data by YCharts.

Paying out more than your free cash flow is unsustainable for any company, so what's going on? There are two things at work here. Vector has ownership stakes in multiple real estate investments that it does not consolidate into its financials. The company previously did not consolidate its 50% ownership of real estate broker Douglas Elliman Real Estate. Vector this year upped its stake in the business to 70.6% and now consolidates Douglas Elliman's results with its own. This consolidation led to a 45% boost of Vector's reported revenue, but if you consolidate the stake for last year, revenue was only up 9%. The second way Vector Group pays out more in cash than free cash flow is by issuing convertible debt, which, when converted, dilutes existing shareholders.

Foolish takeaway
Remember, these 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.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Dan Dzombak can be found on Twitter @DanDzombak or on his Facebook page, DanDzombak. He owns shares of Frontier Communications. The Motley Fool owns shares of Seaspan and Transocean. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers