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3 Under-the-Radar Dividend Stocks Yielding More Than 5% That You Won't Want to Overlook

By Matthew DiLallo – Aug 24, 2020 at 11:05AM

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These stocks offer big-time yields.

Lots of companies pay an attractive dividend. The list includes many household names that investors probably already know and many they've yet to discover. Three that most yield-seeking investors might not know about are Atlantica Sustainable Infrastructure (AY -0.04%)Crestwood Equity Partners (CEQP 0.98%), and Medical Properties Trust (MPW 3.67%). Here's why income investors won't want to overlook these high-yielding stocks.

A sustainable income stream

Atlantica owns a portfolio of sustainable infrastructure assets like renewable energy facilities, power lines, and water desalination plants. These businesses generate stable cash flow backed by long-term contracts that Atlantica uses to support a 5.5%-yielding dividend.

An open safe with a bag full of money on a table.

Image source: Getty Images.

While that current yield is attractive to income seekers, Atlantica also stands out for its growth prospects. The company has steadily increased its payout over the years by continuously expanding its portfolio of cash-generating sustainable infrastructure assets. That trend has continued as the company recently formed a joint venture to invest in renewable energy in Chile and bought its partner's stake in a U.S. solar project. These investments should give it the power to keep growing its payout.

Meanwhile, it has lots of funding flexibility to continue expanding its portfolio, which should drive additional growth in the coming years. Given its focus on sustainable infrastructure, it's an ideal dividend stock for investors who want to make some green from the trend of going green. 

A monster payout that will survive the oil market's turbulence

Crestwood Equity Partners, a master limited partnership, currently yields an eye-popping 17.8%. The main reason the payout has risen to such heights is that investors are worried about its sustainability, given all the turbulence in the oil market this year.

While crashing crude prices had some impact on the pipeline company's results during the second quarter, it still managed to grow its cash flow thanks to recent expansion-related investments. Because of that, it generated enough cash to cover its payout with plenty of room to spare.

Meanwhile, with the worst for the oil market seemingly in the rearview mirror, Crestwood believes its cash flow will be even stronger during the second half. That gives it increasing confidence in the long-term sustainability of its payout since it's on track to generate enough money to fund its dividend and growth-focused spending with room to spare, which will enable it to shore up an already solid balance sheet.

That outlook makes it an intriguing option for investors who want a big-time yield fueled by the energy market.  

A healthy dividend from real estate

Medical Properties Trust is a real estate investment trust (REIT) that focuses on owning hospitals. While these healthcare facilities have been ground zero during the COVID-19 pandemic, that hasn't stopped its tenants from paying rent, which has been a challenge across the real estate sector. It currently expects to collect 100% of its contractual rent this year. Because of that, the company's 5.8%-yielding dividend is on a solid foundation. 

Meanwhile, instead of hurting its business, COVID-19 should bring forth new acquisition opportunities as hospital operators seek to cash in on their real estate to fund their operations. Medical Properties Trust has already agreed to acquire $3.1 billion of hospital properties this year and expects to capitalize on a few more opportunities by year-end. These deals will boost its cash flow, giving the REIT more funds to grow its dividend, which it has done in each of the last seven years.

That combination of a healthy yield and growth prospects makes Medical Properties Trust an ideal way to generate income from real estate without becoming a landlord. 

Generous income streams from lesser-known companies

Atlantica, Crestwood Equity Partners, and Medical Properties Trust aren't as well known as other dividend-paying stocks. Because of that, it's easy for investors to overlook them and miss out on some attractive income streams. It's a reminder that digging a little deeper and getting to know new companies can pay some big dividends. 

Matthew DiLallo owns shares of Atlantica Sustainable Infrastructure plc, Crestwood Equity Partners LP, and Medical Properties Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Medical Properties Trust, Inc. Stock Quote
Medical Properties Trust, Inc.
MPW
$11.86 (3.67%) $0.42
Crestwood Equity Partners LP Stock Quote
Crestwood Equity Partners LP
CEQP
$27.77 (0.98%) $0.27
Atlantica Sustainable Infrastructure plc Stock Quote
Atlantica Sustainable Infrastructure plc
AY
$26.30 (-0.04%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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