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 ran a screen for the highest-yielding stocks, the only limitation I've set this time is that the dividend stocks must have a market cap greater than $500 million and must be a corporation, so no REITs or MLPs.
Here are the top 25 highest-yielding stocks the screen produced:
|Company Name||Market Cap (millions)||Dividend Yield|
|1||BoiseBoise Inc. (NYSE:BZ)||$860.3||13.80%|
|2||SeaDrill Seadrill Ltd (NYSE:SDRL)||$17,629.6||12.00%|
|3||Windstream Corporation (NASDAQ:WIN)||$5,125.4||11.50%|
|4||Pitney Bowes Inc. (NYSE:PBI)||$2,750.4||11.10%|
|5||Great Lakes Dredge & Dock Corporation(NASDAQ:GLDD)||$580.3||10.40%|
|6||RR Donnelley & Sons Co (NASDAQ:RRD)||$1,900.8||10.10%|
|7||Vector Group Ltd (NYSE:VGR)||$1,442.9||10.10%|
|8||Wynn Resorts, Limited (NASDAQ:WYNN)||$11,700.5||9.87%|
|9||Ship Finance International Limited (NYSE:SFL)||$1,410.9||9.53%|
|10||Frontier Communications Corp (NASDAQ:FTR)||$4,092.9||9.52%|
|11||Consolidated Communications Holdings Inc (NASDAQ:CNSL)||$664.2||9.39%|
|12||National Presto Industries Inc. (NYSE:NPK)||$521.8||8.65%|
|13||PDL BioPharma Inc. (NASDAQ:PDLI)||$977.1||8.60%|
|14||SouFun Holdings Limited (ADR) (NYSE:SFUN)||$1,992.7||8.51%|
|15||First Financial Bancorp (NASDAQ:FFBC)||$896.4||7.90%|
|16||New York Community Bancorp, Inc. (NYSE:NYCB)||$5,909.6||7.41%|
Werner Enterprises, Inc. (NASDAQ:WERN)
|18||Linn Energy LLC (NASDAQ:LINE)||$1,349.4||7.37%|
|19||Costamare Inc (NYSE:CMRE)||$1,214.0||7.05%|
|20||Capitol Federal Financial, Inc. (NASDAQ:CFFN)||$1,813.3||6.89%|
|21||HCA Holdings Inc (NYSE:HCA)||$16,386.9||6.82%|
|22||VimpelCom Ltd (NYSE:VIP)||$19,611.6||6.77%|
|23||United Online, Inc (NASDAQ:UNTD)||$549.6||6.77%|
|24||Exelon Corporation. (NYSE:EXC)||$26,881.8||6.70%|
|25||Giant Interactive Group Inc (NYSE:GA)||$1,550.4||6.69%|
These stocks are a good place to start your research, but they're not formal recommendations.
Let's take a look at the top 3:
Boise Inc. (NYSE:BZ) is first with a trailing yield of 13.8%. Boise does not pay a regular dividend; 2012 was the third year in a row that the company paid a special dividend. In fact, in 2012 the company paid two special dividends: one of $0.48 per share and one of $0.72 per share. On the company's most recent conference call, when asked about future dividends, Boise's CEO reiterated the company's track record of returning capital to shareholders but said he would not commit to anything until later in the year. While Boise could indeed continue to pay out large dividends, if you are looking for regular dividends, pass on Boise Inc. (NYSE:BZ)
Seadrill Ltd (NYSE:SDRL) is second with a trailing yield of 12%. This is also artificially high as the company accelerated its fiscal fourth-quarter dividend to December, which normally would have been paid in March, to allow investors to get the lower tax rate on dividends, which expired at the beginning of 2013.