In this article, we will be taking a look at 10 dividend stocks with over 7% yield.
Although investing in stocks is about much more than high dividend yields, such as long-term dividend growth, earnings per share, and price-to-book ratio, investors find high dividend yields very attractive. Moreover, different investors have different reasons for investing, and, accordingly, they may desire different results.
Is High Dividend Yield Important?
According to research published by Mackenzie Investments, companies that initiate, pay, and grow their dividends deliver a higher return and lower risk than companies that do not pay a dividend or those that cut their dividends. Another research by Ned Davis confirms that the companies in the S&P 500 index that grow their dividends have a markedly higher return per annum.
With this background in mind, let us proceed to analyze the 10 dividend stocks with over 7% yield.
Our Methodology
We have carried out extensive research to identify stocks with yields of over 7%. We listed the companies that were famous for their high dividend yields regardless of the industry they operate in. For each stock, we have mentioned its yield and the number of hedge funds holding shares in it.
Why is hedge fund activity important? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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10 Dividend Stocks with Over 7% Yield
10. MIND C.T.I. Ltd. (NASDAQ:MNDO)
Number of Hedge Fund Holders: 2
Dividend Yield: 8.05%
MIND C.T.I. Ltd. (NASDAQ: MNDO), a customer care solutions company, is tenth on our list of the 10 dividend stocks with over 7% yield. Headquartered in Yokneam, Israel, the company also operates in the United States, Germany, and Romania.
On March 16, the company announced dividends to be $0.26 per share, which demonstrated an increase of 8.3% from the previous dividend of $0.24.
9. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 68
Dividend Yield: 8.09%
AT&T Inc., a telecommunications company, is ninth on our list of the 10 dividend stocks with over 7% yield. The company operates through its Communications, WarnerMedia, and Latin America segments.
By the end of the second quarter of 2021, 68 hedge funds out of the 873 tracked by Insider Monkey held stakes in AT&T Inc. worth roughly $2.9 billion. This is compared to 63 hedge funds in the previous quarter with a total stake value of around $2.7 billion.
8. British American Tobacco plc (NYSE:BTI)
Number of Hedge Fund Holders: 12
Dividend Yield: 8.21%
British American Tobacco plc (NYSE: BTI), headquartered in London, England, is a multinational company that produces and markets cigarettes, tobacco, and other nicotine products. The company was established in 1902 and is eighth on our list of the 10 dividend stocks with over 7% yield.
British American Tobacco Plc (NYSE:BTI) recently took part in a $3.5 million funding round in energy and wellness drink startup Tru Inc.
7. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 33
Dividend Yield: 8.27%
Lumen Technologies, Inc. (NYSE: LUMN), headquartered in Monroe, Louisiana, is an American telecommunications and cloud computing company. The company offers network services, voice, and security services, and is placed seventh on our list of the 10 dividend stocks with over 7% yield.
By the end of the second quarter of 2021, 33 hedge funds out of the 873 tracked by Insider Monkey held stakes in Lumen Technologies, Inc. worth slightly more than $1 billion.
6. PBF Logistics LP (NYSE:PBFX)
Number of Hedge Fund Holders: 4
Dividend Yield: 8.30%
PBF Logistics LP (NYSE: PBFX), based in Parsippany, New Jersey, was founded in 2012. It ranks sixth on our list of the 10 dividend stocks with over 7% yield. The company owns, operates, and also leases pipelines, terminals, and storage facilities of refined petroleum oil.
By the end of the second quarter of 2021, out of the 873 tracked by Insider Monkey, 4 hedge funds held stakes in PBF Logistics LP worth roughly $1.895 million. This is compared to 3 hedge funds in the previous quarter with a total stake value of approximately $673,000.
5. MFA Financial, Inc. (NYSE:MFA)
Number of Hedge Fund Holders: 24
Dividend Yield: 8.6%
MFA Financial, Inc. (NYSE: MFA) is a real estate and investment company that deals with residential mortgage assets as well as residential whole loans. The company is fifth on our list of the 10 dividend stocks with over 7% yield.
By the end of the second quarter of 2021, 20 hedge funds out of the 873 tracked by Insider Monkey held stakes in MFA Financial, Inc. worth roughly $151 million. This is compared to 16 hedge funds in the previous quarter with a total stake value of approximately $104 million.
4. Global Partners LP (NYSE:GLP)
Number of Hedge Fund Holders: 2
Dividend Yield: 9.95%
Global Partners LP (NYSE: GLP) is an energy supply company that imports and markets petroleum products. Established in 2005, it ranks fourth in our list of the 10 dividend stocks with over 7% yield.
Theresa Chen, an analyst at Barclays, downgraded Global Partners LP to Underweight from its earlier position of Equal Weight and set a price target of $21 price target due to its volatile cash flows.
3. Star Bulk Carriers Corp. (NASDAQ:SBLK)
Number of Hedge Fund Holders: 24
Dividend Yield: 9.06%
Star Bulk Carriers Corp. (NASDAQ: SBLK), a shipping company, operates a fleet of carrier vessels that transport materials such as grain, fertilizers, and iron ore. The company is based in Greece and ranks third on our list of the 10 dividend stocks with over 7% yield.
H.C. Wainwright initiated coverage of Star Bulk Carriers Corp. with a “Buy” rating on September 13 and set a $35 price target on the stock.
Massif Capital, an investment management firm, mentioned Star Bulk Carriers Corp. in its third-quarter 2021 investor letter. Here’s what the firm said:
“We initiated one long position, one short position and exited one position during the third quarter. Our new long position was in Star Bulk Carriers (SBLK), a pure-play dry bulk operator with roughly 120 controlled vessels and 14 million tons of combined cargo capacity globally.
SBLK has one of the better management teams in the maritime shipping industry and the lowest cost structure among all dry bulk names. After announcing their new dividend policy in May, SBLK now has one of the best payout structures in shipping. The firm has paid out $0.3 and $0.7 per share in dividends for the first and second quarters of 2021. SBLK will most likely announce a dividend for the third quarter somewhere in the $1.15-$1.25 per
share range, depending on movement in net working capital.We believe the best way to look at this business is through cash generation potential and how much is returned to investors. The current equity valuation does not reflect current rates for shipping (earnings), partly because of the velocity of the move in rates and because shipping cycles turn, and it’s not clear whether this is a local top or the early innings of a multi-year cycle. Our belief is the latter. Part of our catalyst is the market re-rating the stock higher once the length of the increased earnings power becomes understood. It is a relatively strong catalyst in the sense that with a strong dividend policy, we can be patient for the market to underwrite this story as the cash is either returned to us via a high dividend yield if the market is either slow or chooses not to join our side of the trade.
Our estimates suggest a time-charter equivalent rate (net profit or loss of operating a vessel daily) of at least $30,000 for SBLK in Q4, with the firm earning a potential annual average of $26,000. Our base case is that this is a strong floor going into next year, with little need to articulate much more upside. If rates hold, which we expect them to do, we could see a 20+% annual dividend year next year for SBLK. If the market priced the equity such that the dividend yield was 8%, that implies a $62 stock. Today our base case target for the firm is $37 per share. This is likely conservative as we know that third-quarter rates are higher than the second quarter, and third-quarter dividends will most likely reflect that. We are cautious about diving too deep into the sensitivities to the upside with this position as we are arriving at some pretty remunerative torque using current contracted values and seemingly conservative forecasts…” (Click here to see the full text)”
2. Newtek Business Services Corp (NASDAQ:NEWT)
Number of Hedge Fund Holders: 4
Dividend Yield: 9.16%
Established in 1998, Newtek Business Services Corp (NASDAQ: NEWT) provides solutions such as cloud storage, security, IT services, financial loans, insurance, and HR systems to businesses. It ranks second on our list of the 10 dividend stocks with over 7% yield.
By the end of the second quarter of 2021, 4 hedge funds out of the 873 tracked by Insider Monkey held stakes in Newtek Business Services Corp worth roughly $7.2 million. This is compared to 5 hedge funds in the previous quarter with a total stake value of approximately $5.2 million.
1. Natural Health Trends Corp. (NASDAQ:NHTC)
Number of Hedge Fund Holders: 2
Dividend Yield: 11.08%
Natural Health Trends Corp. (NASDAQ: NHTC) is an international retailer that sells personal care and wellness goods using both direct-selling and e-commerce. The company is based in Dallas, Texas, and ranks first on our list of the 10 dividend stocks with over 7% yield.
By the end of the second quarter of 2021, 2 hedge funds out of the 873 tracked by Insider Monkey held stakes in Natural Health Trends Corp. worth roughly $6.6 million. This is compared to 1 hedge fund in Q1 2021 with a total stake value of approximately $6.4 million.
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This article is originally published at Insider Monkey.
