In this article, we will take a look at the 10 High Yield Stocks For Lasting Retirement Income.
Dividend stocks have long attracted investors across different market conditions. A report from RidgeWorth Investments found that dividend-paying stocks have delivered consistent and positive return streams over time, regardless of broader market movements. The report also noted that the long-term compounding effect of dividends has played a major role in overall returns.
According to ISI, compounded dividends have historically accounted for about 50% of total stock market returns since the 1930s. The report also pointed to the support dividends provided during difficult economic periods, including the 1930s, 1970s, and 2000s.
The findings also showed that dividend-paying stocks performed well on a risk-adjusted basis. The report analyzed the 1,000 largest stocks by market capitalization and grouped them by dividend yield. Higher-yielding stocks, represented by quintiles 1, 2, and 3, produced stronger returns while carrying considerably lower risk compared with lower-yielding stocks in quintiles 4 and 5.
The report further highlighted that dividend growers and dividend initiators performed even better than dividend payers overall. Companies that either raised or initiated dividends generated returns of 9.6% over the past 38 years. Stocks that maintained their dividend payouts returned 7.5% over the same period. In comparison, non-dividend-paying stocks posted gains of just 1.7%.Companies that reduced or eliminated their dividends were penalized by investors and recorded a decline of 0.5%.
Given this, we will take a look at some of the best dividend stocks for lasting retirement income.
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Our Methodology:
For this list, we screened for dividend companies that have raised their dividends for at least 10 consecutive years and shortlisted those with dividend yields above 3%, as of May 22. We picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. The Southern Company (NYSE:SO)
Dividend Yield as of May 22: 3.22%
On May 21, Morgan Stanley analyst David Arcaro lowered the firm’s price recommendation on The Southern Company (NYSE:SO) to $87 from $92. He reiterated an Underweight rating on the shares. The analyst said the firm updated its price targets for Regulated & Diversified Utilities and IPPs across North America for April. Morgan Stanley also noted that utilities lagged the S&P’s return during the month.
Earlier in the month, on May 1, Raymond James raised its price goal on SO to $104 from $103. It kept an Outperform rating on the stock. The analyst said the company continues to execute well, backed by solid demand visibility, a large contracted load pipeline, and an $81B regulated capital expenditure plan expected to support 9% rate base growth through 2030. The research note also pointed to improving financing clarity, which the firm believes gives Southern Company more flexibility as investments increase. The analyst added that there could still be more upside for the stock despite only modest gains following earnings.
The Southern Company (NYSE:SO) is an energy provider that owns three traditional electric operating companies, along with Southern Power Company and Southern Company Gas. Its electric utilities, Alabama Power, Georgia Power, and Mississippi Power, provide electricity to retail customers across three Southeastern states, as well as wholesale customers throughout the Southeast.
