All Interesting High-Yield Stocks
A list of 190 High-Yield Stocks
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Welcome to this week’s 🔒 exclusive edition 🔒 of Compounding Dividends. Each week we talk about the financial markets and give an update on our Portfolio.
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Last week, we shared more than 450 interesting dividend growth stocks with you.
But High-Yield Companies can be very interesting too.
Today's list includes all interesting High-Yield Companies.
![High-Yield Topics for MRCP Part 1 [Highly Recommended]](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff1559558-3062-4d94-bc75-bfae1e53eb23_1024x440.jpeg "High-Yield Topics for MRCP Part 1 [Highly Recommended]")
Our Dividend Portfolio
Even though we're focusing on High-Yield Companies today, we’re still looking for good businesses with:
Sustainable competitive advantages
Quality management
Healthy balance sheets
Attractive histories of growth
“The prime purpose of a business corporation is to pay dividends regularly and, presumably, to increase the rate as time goes on.” - Benjamin Graham
Creation of the watchlist
Our watchlist is split into three parts:
Dividend Growth Stocks: Stable companies that raise their dividends every year
High-Yield Stocks: Companies that return a lot of capital as dividends
Cannibal Stocks: Companies that heavily buy back their own shares
The goal is to provide you with a reliable income stream.
The company can’t keep raising its dividends if earnings don't grow while growing your dividends.
High-Yield Companies
Today’s article will focus on High-Yield Companies.
These companies have yields much higher than the market yield.
High-Yield Companies are interesting because they generate a lot of income.
The image shows that the higher the yield, the less you need to invest to get the same $500 dividend payment.
High-Yield Companies Perform Well
Wellington Management found that companies in the top 40% of dividend yields outperform the S&P most often:
High-Yield Doesn’t Mean High Payout Ratio
A common criticism of High-Yield Companies is that they pay out too much in dividends.
The same study found this isn’t always true.
Reinvestment
The beautiful thing about High-Yield Companies is that they’ll reliably provide you income.
This allows you to retire comfortably.
But until you retire, you can reinvest your dividends.
This fuels compounding over time.
A Historical High-Yield Example
We’ve talked about Altria being the best performing stock over the past 100 years before.
Altria was formerly known as Philip Morris. They’re a tobacco company that sells cigarettes, primarily under the Marlboro brand, as well as smokeless tobacco products.
They have grown at over 16% per year for the last 98 years.
A $1 investment in Altria in 1925 is worth over $2.6 million (!) today.
Source: Which U.S. Stocks Generated the Highest Long-Term Returns?
Altria’s More Recent Performance
Buying Altria in 1925 would have been great, but most of us weren't investing back then.
What about a more recent investment?
If you invested $10,000 in Altria 20 years ago and reinvested your dividends, you would have earned over 14% per year, outperforming the S&P.
Even better?
You’d now receive more than $11,000 in dividend payments each year - more than your original investment!
One more interesting point:
These returns happened with a flat stock price! Altria was trading at $47.40 when this example started, and ended at $49.61.
Reinvesting your generous dividends made this possible.
Selecting the companies
For the High-Yield Bucket, we looked for companies with dividend yields that are much higher than the S&P (currently 1.3%).
Our Criteria:
Dividend Yield: 3.75% or higher
5-Year Dividend Growth: 3.75% or more
Revenue Growth: 3% or more
An example from our list? Clearway Energy.
Clearway generates electricity using wind and solar.
They currently have a dividend yield of over 6%.
Source: Finchat
Our Portfolio will be built based on the watchlist.
Partners of Compounding Dividends will get access with 100% transparency.
This allows you to watch our entire Portfolio 24/7.
Does this interest you?
Consider becoming a Partner of Compounding Dividends.
If you join this month, you enjoy a discount of 30%:
A Few Highlights
The highest yielding company on the list:
🖥️ CMB Technology at 21.1%
A few High-Yield Companies with strong Dividend Growth:
🏬 Main Street Capital: 10% per year
🛜 Cogent Communications: 12% per year
The average dividend yield in the High-Yield Universe is 6.3%.
This means that an investment of $10,000 yields you $630 in dividends every single year!
The High-Yield Universe
Are you ready to look at more than 190 companies with strong dividend payouts?
Let’s dive into the list!