how to find better dividend paying stocks (motley fool)

10 Highest Dividend Yielding Stocks

Lets put these high-yielding stocks to the test to determine if any are actually worth owning.

Brian Feroldi

Dec 31, 2016 at 1:08PM

IMAGE SOURCE: GETTY IMAGES.

One sound long-term investing strategy is to buy stocks that offer up high dividend yields.This strategy has become particularly enticing in today's low interest rate environment, since it offers investors a chance to generate a lot of income from their portfolio. However, just because a stock offers up a high yield doesn't make it an automatic buy, especially because sky-high yields are often accompanied by sky-high risks. Knowing that, lets take a look at the 10 highest yielding stocks from the S&P 500 to see if any of them are worth buying today.  For simplicity's sake, we'll exclude all real estate investments trusts, or REITs, from this article since they play by their own set of rules.

Company	Ticker	Dividend Yield
Frontier Communications	(NASDAQ:FTR)	12.3%
CenturyLink	(NYSE:CTL)	9%
Seagate Technology	(NASDAQ:STX)	6.4%
Mattel	(NASDAQ:MAT)	5.4%
Staples	(NASDAQ:SPLS)	5.2%
Ford	(NYSE:F)	4.8%
Pitney Bowes	(NYSE:PBI)	4.8%
Entergy Corp.	(NYSE:ETR)	4.8%
FirstEnergy	(NYSE:FE)	4.6%
AT&T	(NYSE:T)	4.6%

DATA SOURCES: FINVIZ

Is the payout sustainable?

Most dividend investors know that a key metric for any dividend stock is the payout ratio, which is the percentage of a company's earnings that it uses to pay dividends. In general, a payout ratio over 85% is worrisome as it hints that the dividend could be on the chopping block if the company's earnings ever take a hit. A payout ratio greater than 100% means that the company is paying out more in dividends than it generates in net income.

Here's a look at the current payout ratio for each of these companies.

Company	Payout ratio
Frontier Communications	N/A
CenturyLink	127%
Seagate Technology	200%
Mattel	144%
Staples	54%
Ford	33%
Pitney Bowes	56%
Entergy Corp.	48%
FirstEnergy	51%
AT&T	82%

DATA SOURCES: YAHOO! FINANCE

Right away we can see that this metric removes several companies from contention. Frontier Communications isn't expected to be profitable this year, which is why it doesn't even have a payout ratio. That makes it an easy pass in my book.

CenturyLink, Seagate Technology, and Mattel all boast payout ratios well over 100%, which means their dividend payments currently exceeds their net income. That lets us remove them from consideration, too.

Just like that, our list of 10 has been cut down do 6.

Is the business growing?

The remaining companies all appear to offer up stable dividend payments, but even dividend investors also need to think about growth. After all, if a company's profits are stagnant or declining, its dividend isn't likely to be increased over time, making it a far less attractive investment.

Let's take a look at the projected profit growth rates of our remaining list of companies to see what analysts believe is going to happen over the next five years. 

Company	Estimated 5 year growth rates
Staples	1.3%
Ford	1.5%
Pitney Bowes	4%
Entergy Corp.	(8.2%)
FirstEnergy	(5.1%)
AT&T	8.4%

DATA SOURCES: FINVIZ.

While Entergy and FirstEnergy are profitable and paying out solid dividends, Wall Street believes that both of these companies are about to see their profits head in the wrong direction. Those numbers tell me that we should look elsewhere for investment opportunities.

Staples is another company that should give investors pause. The company's business model is under attack from e-commerce companies like Amazon.com, which is a big reason why same store sales numbers have been in decline. To fight back, the company is closing down its under-performing stores and investing heavily in Staples.com, but those moves are going to take their toll on the company's profitability.

The markets also appear to be quite concerned with Ford's long-term prospects. That's likely owing to worries about peaking auto sales in North America -- a theory which, if true, suggest that the company's sales and profit margins are currently unsustainable. In addition, autonomous vehicles and ride-sharing services are both long-term opportunities and threats to the auto industry. Given those realities, it's not hard to understand why analysts are being cautions with their growth estimates.

For these reasons, conservative investors might want to consider removing both Ford and Staples from contention, too.

And then there were two

Pitney Bowes sailed through our first two tests with ease, but that doesn't mean that this is a risk-free stock. In fact, the markets have been punishing shareholders for more than two years as the company has been struggling with growth. Last quarter the company's earnings fell by more than 22% due to lower-than-expected license revenue, which is one of the company's most lucrative business lines. That caused the company to reign in its full year profit forecast. That's a troubling development that could suggest that analysts are over estimating this company's growth prospects.

AT&T, on the other hand, has a lot going for it. The company's wireless division continues to be a cash cow that is supporting by very low churn rates. AT&T also offers investors the potential for growth thanks to its recent purchase of DirecTV. Its pending merger with Time Warner could also be a big win for shareholders if it goes through. . Even if the deal falls through, AT&T should still be able to crank out consistent earnings growth, allowing it to retain its status as a dividend aristocrat.

So there you have it. This simple list of criteria shows that income investors would be wise to add AT&T to their watch list and largely ignore the rest. 

preferred stocks (bARRONS)

TRADER EXTRA

Preferred Picks

With income investors hard-pressed, we went back to the well: that is, to preferred stocks.

By 

VITO J. RACANELLI

September 10, 2016

With income investors hard-pressed, given the artificially low interest-rate environment, we went back to the well: that is, to preferred stocks, last mentioned here on May 14.

The stock market’s dividend yield is just 2.2%, while the 10-year Treasury yields a mere 1.67%. Both have risks, particularly Treasuries, given that the Fed is committed to raising rates, perhaps by December—and possibly sooner, as we note above. A hike would push down bond prices. What it will do to stocks is an unknown danger, too.

Corporate preferreds are an attractive way of securing a higher yield at a lower risk, though their capital gains are likely to be more restrained, too. We returned to Douglas Christopher, an analyst at D.A. Davidson, who gave us five preferred stock picks in May, most with fixed coupons. Although all of them were already above par value then, they’ve risen in price since May.

That high valuation is a problem for investors new to the preferred scene. Fixed-coupon preferred stock prices could drop and be volatile before and after the Fed hikes rates, the analyst notes.

So, this time, he likes adjustable preferreds, most of which are selling significantly below par value (see table, above). Consequently, they could fare better than fixed preferreds if a rate hike materializes, especially if the central bank moves more quickly than markets expect.

In general, the average yield on fixed preferreds is about 5.5%, versus 4.2% for adjustables. The interest rate on adjustables can change, and that’s a risk—but rates should be rising. We’ll note that under the typical underlying terms governing adjustables, it would take a slew of hikes to raise the current coupon rates.

Nevertheless, the dollar payout levels for these five, such as a $1 per year for theGoldman Sachs Group D preferred shares (GS.D), are effectively at their minimums already. So there’s some downside protection. As in the previous batch, these preferreds come mostly from banks whose credit fundamentals and dividends are healthy.

If rates stay flat, you miss out on the better yield of the fixed-coupon preferred. Still, “if you are looking for income and a decent yield, but at a price below par, this is an attractive way to go,” Christopher observes. 

The new Dividend Aristocrats (from Contrarianoutlook.com)

The 4 Newest Dividend Aristocrats

Brett Owens, Chief Investment Strategist
Updated: April 11, 2016

A couple of weeks ago, I discussed the value of investing in the S&P 500 Dividend Aristocrats, the 50 companies in the index that have hiked their dividends for at least 25 consecutive years.

It boils down to performance: in the last decade, this vaunted group has returned an average of 10.3% a year (including dividends), compared to just 6.3% for the S&P 500 as a whole.

It’s also a list that doesn’t change much. Last year, there was just one adjustment, and it was a removal, after Family Dollar Stores was taken over by Dollar Tree (DLTR).

But in the next 14 months, four companies will punch their tickets to this elite club. Should you invest in them? Here, from worst to first, is my take on the Dividend Aristocrats “class of 2016.”

Linear Technology: Reboot Needed

Analog chipmaker Linear Technology (LLTC) raised its dividend for the 24th straight year in February, making it eligible to enter the pantheon of Dividend Aristocrats in early 2017. The stock currently yields 2.9%.

That’s the good news. The bad? The market for analog chips, which are used in everything from cars to digital cameras, is highly competitive and fragmented. The largest player, Texas Instruments (TXN), controls 18%, compared to just 3% for Linear.

That means the company will have to spend heavily just to hold its own, though it does improve the odds of a takeover by TI or another competitor.

Linear can only hope, because its profits are caught between tough competition and the sluggish economy: in its fiscal 2016 second quarter, earnings per share (EPS) slipped to $0.50 from $0.51 a year earlier, and the company is only expected to report EPS of $1.99 for the full year, down from $2.12 in fiscal 2015.

And if you thought a slow grower like Linear would at least be cheap, you’d be wrong. Its forward P/E ratio clocks in at 22.8, well above Texas Instruments (19.3) and its five-year average (20.5).

Praxair: Sales Vaporized

Praxair Inc. (PX) also marked its 24th straight dividend hike earlier this year. The stock yields 2.7%, and a 25th increase next spring looks like a slam-dunk, thanks to its reasonable 52.9% payout ratio (or the percentage of earnings paid out as dividends).

The company supplies industrial gases, like acetylene (for welding), helium and krypton (used to make windows and semiconductors).

But like Linear, Praxair operates a cyclical business. It also gets 45% of its sales from outside North America, so it’s being hit by the stronger greenback: in the fourth quarter, foreign exchange cut its sales by 10%.

Praxair offset that with cost cuts, which helped it grow adjusted EPS by a penny, to $1.47 from $1.46. But that only goes so far: what it really needs is a manufacturing rebound—particularly in China and Brazil—and I don’t see that happening anytime soon.

General Dynamics: The Pentagon’s BFF

General Dynamics (GD) became a Dividend Aristocrat with gusto in early March, marking its 25th year of dividend hikes by announcing a 10% increase, payable in May.

Hikes like that are par for the course for the defense giant, which has raised its payout by 230% since 2006. Keeping its membership in the Dividend Aristocrat club will be a cinch: its payout ratio sits at just 29%.

The knock on General Dynamics is its reliance on the US government (57% of 2015 revenue) to buy its tanks, ships and computer systems. That’s a risk, to be sure, but with terrorist threats on the rise, I don’t see that spending slowing down anytime soon.

Wall Street is also bullish: the average analyst estimate sees EPS rising 3.2% this year and 7.4% in 2017.

Even better, these overwrought worries have dropped the stock’s forward P/E ratio to 13.8, below competitors likeRaytheon (RTN), at 18.0, Rockwell Collins (COL), at 17.3, and Lockheed Martin (LMT), at 18.6.

That hasn’t been lost on General Dynamics’ board, which authorized a 10-million-share buyback in December. That’s a big plus, because fewer shares translate directly into higher EPS and share prices.

The Valedictorian: Roper Technologies

Roper Technologies Inc. (ROP), my top pick among these four, has the one ingredient General Dynamics lacks: diversification.

Roper is a Florida-based industrial firm that increased its payout for the 24th consecutive time in January. Look for it to hit the magic number in January 2017.

It’s a good thing companies don’t need a high dividend yield to become Dividend Aristocrats, or Roper’s 0.68% would surely disqualify it. But that low yield masks an incredible growth story: in the past decade, the payout has jumped 410%.

Roper has four main segments: medical and scientific imaging, radio-frequency ID systems (mainly used for toll roads, security cards and remote monitoring), industrial technology, and energy systems and controls.

The stock’s down 6.5% this year on worries weak oil prices will keep weighing on energy firms’ spending.

But energy is Roper’s smallest business, chipping in just 16% of its total revenue in 2015. When you strip out energy and industrial products—the two most volatile divisions—you’ll see that the others (representing 63% of total revenue between them) are going gangbusters, notching a combined 14.6% sales increase in Q4, and an 18.8% rise in operating profits.

Meantime, Roper trades at 24 times its forecast earnings over the next 12 months and just 20 times free cash flow. That’s a reasonable price in light of its growth potential, both organically and through acquisitions.

TOP WEBSITES FOR INCOME INVESTORS (KIPLINGERS)

KIPLINGER'S | March 2016

9 Top Free Sites for Income Investors

Five years ago, Kiplinger’s turned to longtime investment writer and in-house income guru Jeff Kosnett to launch a newsletter designed to steer income-starved readers to the best investments for dependable, spendable income. Today, Kiplinger’s Investing for Income continues to attract a growing army of satisfied readers.

How does Jeff uncover opportunities for his subscribers month after month? Of course, he spends a lot of time interviewing money managers and mutual fund masterminds, as well as the men and women who actually run real estate investment trusts (REITs) and master limited partnerships (MLPs). And he mines the Internet, searching for great ideas and studying the raw data to identify broad trends and profitable prospects. We asked Jeff to share with Kiplinger.com readers his favorite free sources for reasoned discussion and hard-to-find financial data. Bookmarking these sites will be a valuable step toward making you a more successful investor.

 

Closed-End Fund Center

Web address: www.cefa.com

Key data: Discounts and premiums to net asset value

Best for: Sorting and screening 629 closed-end funds

The keys to understanding any closed-end fund are data about current and historic discounts and premiums to net asset value, distribution rates, whether and how much the fund borrows (leverage), and total return on net asset value. This site offers all of that and more, plus the tools to sort and screen more than 30 varieties of funds in too many ways to count.

Kosnett Comment: CEFA’s tables show each fund’s distribution yield next to its income yield. The two won’t match, but they should be fairly close. If the income figure is low but the distribution is high, the fund is selling assets or issuing new shares to maintain the illusion of a fat yield. It could be headed for a distribution cut.

Eaton Vance Monthly Market Monitor

Web address: www.eatonvance.com

Key data: The numbers on all aspects of income investments

Best for: Total returns and average duration of bonds

This fund company’s site is loaded with free stuff. The best is the monthly monitor (accessible in the site’s Institutional Investors section): 40-plus pages of charts and tables about all aspects of stocks, bonds, bank-loan funds, commodities, industry sectors and more. All this — including total returns and average duration of more than 20 kinds of bonds — is nicely laid out on single pages.

Kosnett Comment: The page called “fixed income spread analysis” uses simple bar charts to show the current and past yield advantage of various categories, such as junk bonds or preferred stocks, over Treasuries. When the spread is unusually narrow, there’s more risk. When it’s wide, it’s usually a good time to invest.

FRED

Web address: www.stlouisfed.org

Key data: 382,000 statistical series from 82 sources

Best for: Financial data, graphs and charts from the government and everywhere else

If you want to see a trend in, say, inflation, growth, interest rates or stock-market returns for just about any period, you’ll find it here. This takes the place of any almanac, encyclopedia or reference book — and it’s updated daily. FRED is the acronym for Federal Reserve Economic Data and is the brainchild of the Federal Reserve Bank of St. Louis.

Kosnett Comment: You may go weeks or months without using this, and then you’ll refer to it several times in one sitting. It’s comforting to know that someone has gone to the effort of assembling all this info in one place.

SEE ALSO: 7 Promising Dividend Stocks Yielding 5% or More

FRED

Investing in Bonds

Web address: www.investinginbonds.com

Key data: Real-time market data on bond trading action and prices

Best for: Owners (or potential owners) of individual corporate and municipal bonds and anyone else who wants to see how bonds are priced and what they are yielding at any given time

Kosnett Comment:The Securities Industry and Financial Markets Association (SIFMA), the bond dealers’ trade association, runs the site and has a news feed as well. Some of the commentaries, though, are dated.

Robert W. Baird & Company

Web address: www.rwbaird.com

Key data: Relative yields of municipals and Treasuries

Best for: Analysis of taxable and tax-free bond markets

The managers of Baird Core Plus Bond fund and other excellent no-load income funds publish a combination of basics with just enough financial-market-speak to keep the pros happy with their Capital Markets Perspective. The insights live at Baird’s corporate site (address above) not the Baird Funds' consumer site. Offerings include both tax-free bond and taxable-bond commentaries. A recent subject is the tight supply of new bonds, which keeps prices high and yields low. There is also a colorful market commentary called, ahem, The Bull and Baird Blog.

Kosnett Comment: Baird’s municipal bond letter illustrates such basics as the ratio of tax-free bond yields to Treasury yields and the equivalent yield you need to earn on a taxable investment to net the same after-tax income.

Pimco

Web address: www.pimco.com

Key data: Outlooks and forecasts from the fixed-income behemoth (with $1.43 trillion under management) formerly known as the Pacific Investment Management Company

Best for: Investors who like to see commentaries and explanatory articles that put the market’s gyrations in perspective. For example, an article called “Emerging Markets Trying to Turn the Corner” makes the case for some, but not all, investments in those countries. The Pimco blog about the issues of the day is well-presented and with graphics.

Kosnett Comment: The departure of Bill Gross from Pimco changed this site from his soapbox to more of a team effort.

EMMA

Web address: www.emma.msrb.org

Key data: Muni bond trading details

Best for: Screening the tax-free bond universe for top yields

Electronic Municipal Market Access, from the Municipal Securities Rulemaking Board, shows every municipal bond trade, plus key background information about thousands of issuers. If you own tax-exempts, you can see a price graph for each bond based on months of trades, just as you can chart a stock or a fund. You can also screen the tax-free bond universe in detail. For example, when you search for all AA-rated Arizona water and sewer bonds due between 2024 and 2029, up pop the yields and other particulars.

Kosnett Comment: EMMA is easier to navigate if you know your bond’s CUSIP number.

REIT.com

Web address: www.reit.com

Key data: Historical returns and other performance information for real estate trusts going back to their invention in the 1960s.

Best for: Avid real estate investment trust fans and anyone who wants to see new offerings and news tidbits about the industry and its members. The site is run by the National Association of Real Estate Investment Trusts (NAREIT).

Kosnett Comment: It would be good if NAREIT would link to a resource that provides up to the minute data on the individual REITs’ net asset values and prices to book value. You need a brokerage link to that kind of research.

TCW

Web address: www.tcw.com

Key data: Monthly updates by sector, such as the High Yield and Mortgage Market updates. Find it all under Insights from TCW, a global asset management firm.

Best for: Bond fund investors, especially if you dabble in risky or unusual areas like junk bonds, mortgages and bank loans. There are also excellent forecasts and commentaries from the portfolio managers and analysts.

Kosnett Comment: This is some of the best perspective on individual bond-market segments and what’s driving them up or down.

Preferred Stocks Frequently Asked Questions (from Incapital.com)

Preferred Security FAQs

• How do I purchase preferred securities?
• What are cumulative and non-cumulative dividends?
• Are preferred securities callable?
• Is the income from preferred securities taxable?
• Where do preferred securities stand in the priority of claims?
• Where can I get a prospectus or prospectus supplement?

---

HOW DO I PURCHASE PREFERRED SECURITIES?

After syndication, most public preferred securities are traded on an exchange.  The most widely used is the New York Stock Exchange.  They also trade over-the-counter through broker-dealers who make markets in various preferreds.  Privately-placed preferreds trade through a broker-dealer or directly between investors.

WHAT ARE CUMULATIVE AND NON-CUMULATIVE DIVIDENDS?

Preferred stock dividends are either cumulative or non-cumulative.  Cumulative dividends are due to shareholders irrespective of an issuer’s profitability.  If an issuer has trouble meeting its financial obligations and does not pay a cumulative dividend, dividends accrue and the company is obligated to pay all past and currently due preferred dividends before paying common dividends.  If a company does not pay a non-cumulative dividend, it is not obligated to do so in the future.  Non-cumulative dividends do not accrue beyond one year and the issuer is still permitted to pay common dividends the year following an omission if preferred payments recommence.  In either case, a company is not automatically considered in default if it misses a payment as it would be by missing a bond payment. 

ARE PREFERRED SECURITIES CALLABLE?

Preferred securities may be callable, in which case the issuer has the right to purchase the securities from the investor at a predetermined date and price.

IS THE INCOME FROM PREFERRED SECURITIES TAXABLE?

Income from preferreds with the exception of Trust Preferreds is taxable as ordinary income unless it is Qualified Dividend Income (QDI) and/or Dividend Received Deduction (DRD) eligible.  QDI and DRD eligibility depends on factors relating to the structure, issuer and investor.

Income from Trust Preferreds and Baby Bonds is considered interest and taxable as ordinary income.

The tax treatment of preferred securities varies.  However, investors should not rely on these taxation provisions, as they may change.  Incapital does not provide tax or financial advice.  Please read the tax section of the prospectus and prospectus supplement and consult a qualified tax professional before investing.

WHERE DO PREFERRED SECURITIES STAND IN THE PRIORITY OF CLAIMS?

The priority of claims refers to the order in which investors receive their share of a firm’s net worth upon liquidation.  Preferred securities rank junior to bonds and senior to common stock in the priority of claims against a company’s assets in the event of bankruptcy or reorganization.  The diagram below illustrates the capital structure priority.  A preferred’s place may vary depending on its specific characteristics outlined in the prospectus and prospectus supplement.

This Priority of Claims diagram is for illustrative purposes only.  Each security’s offering documents will govern the issue’s priority.

WHERE CAN I GET A PROSPECTUS OR PROSPECTUS SUPPLEMENT?

The prospectus and prospectus supplement for public offerings are available on the SEC’s website.   

Best Big Company Dividend Stocks (investor place)

America’s 25 Best-Yielding Large-Cap Dividend Stocks

by James Brumley | December 29, 2015 2:03 pm
Looking for some income in your portfolio? Even growth-oriented investors can appreciate dividend stocks and the payouts they provide, even if that cash is ultimately earmarked for the purchase of growth stocks. And as for income lovers: With bonds still paying next to nothing despite the Federal Reserve’s plans to start ratcheting up interest rates, dividend stocks are the only viable way to drive cash flow at a level that at least keeps pace with inflation.
[1]With that as the backdrop — and with a new calendar year being the perfect reason to reconfigure a portfolio — a closer look at the market’s biggest and best dividend stocks is merited.
It’s not a look that should be taken lazily, mind you. Sometimes a dividend yield is high simply because a stock has fallen in anticipation that its dividend will soon be cut. On the other hand, sometimes a yield is strong because the market proverbially threw the baby out with the bathwater. Even the names that have fallen due to fears of a reduced dividend, however, can sometimes make for worthy speculations.
The situation doesn’t become clear until a particular company is scrutinized.

• The 6 Best Dividend Stocks to Buy in 2016[2]

Whatever the case, to help investors get their search for income started, here’s a closer look at the 25 large caps with the biggest payouts. The list was assembled without bias or assumption; it’s just a list of the market’s major dividend stocks, starting with the smallest payout and working its way to the biggest.
#25: Duke Energy (DUK[3]), 4.59% Dividend Yield: Duke Energy may be the first utility name on this list of dividend stocks for income investors to consider owning in 2016, but it won’t be the last. Utilities are among the most stable and stereotypical of dividend stocks, serving as a toll booth that all consumers are required to cross once per month … forever. That’s how Duke can afford its current 4.59% dividend yield. That said, a potentially brutal winter could spur an especially solid first quarter for Duke Energy and its peers going forward.
#24: Philip Morris International (PM[4]), 4.61% Dividend Yield: The public certainly loves to publicly hate Big Tobacco. Yet, investors certainly love to own these names too. Reynolds American, Inc. (RAI[5]) shares were up 45% in 2015, while Altria Group Inc (MO[6]) shares gained 20%. The company that income seekers want to take a puff on within the tobacco arena, however, is Philip Morris International. PM currently sports a yield of 4.61%, and despite anti-smoking efforts that seem to be worldwide, that dividend is rather well-protected, and the company has made a concerted effort to remain shareholder-friendly.
#23: Southern Co (SO[7]), 4.61% Dividend Yield: As promised, Duke Energy isn’t the only utility name to earn a spot on this list of compelling dividend stocks. Southern Company has continued to ride a rising tide of earnings growth, and has passed a big chunk of that income along to investors. That’s not going to change anytime soon. Indeed, Southern Co is wading a little further into wind and solar now[8], diversifying its production capacity, and therefore giving it some fiscal flexibility (even though wind and solar are not consistently profitable ventures).
#22: International Paper (IP[9]), 4.62% Dividend Yield: Once again, paper manufacturer International Paper is underappreciated and underestimated. Granted, it’s not a sexy business, and the dynamics of the paper market can ebb and flow enormously in just short while. It’s always an industry that lands on its feet, though, as paper usage is almost like utility usage … we can’t seem to get around it.
#21: Chevron Corporation (CVX[10]), 4.74% Dividend Yield: In light of what’s going on with the oil market, it’s tough to own a name like Chevron Corporation, even if the current yield is well above 4%. CVX seems to have a hand in every aspect of the energy market, none of which have been compelling for months. Worse still, with crude stockpiles in the U.S. rising back to unwieldy levels while OPEC remains adamant about sustaining its output[11], there’s no end in sight to the oil glut that’s making life miserable for these companies. The herd is starting to thin out, however, and it may well be a sign that things will finally start to improve for the energy market in 2016. When that happens, the biggest and the strongest survivors — like Chevron — will be well-positioned to ride the recovery wave. It just takes a little faith that nothing lasts forever.
Next Page – #20-#11[12]
#20: Verizon (VZ[13]), 4.83% Dividend Yield: Verizon usually is classified as a consumer service stock, but truth be told, it’s as much of a utility stock and a commodity as it is a service play. It’s that hybrid nature, however, that makes a telecom name like Verizon and its massive dividend so attractive. VZ may not be able to take a lot of new market share, but it’s also not giving any real share up to other players in this space. And to its credit, Verizon is also trying new things like a streaming television service[14] as a way to boost its growth opportunities.
#19: Welltower (HCN[15]), 4.89% Dividend Yield: You may know it better as Health Care REIT; the name was changed in September. The name is irrelevant, however. What matters is that this assisted-living facilities and long-term and post-acute-care facilities REIT owns 1,400 different properties, and uses them to support a dividend yield nearing 5%.
#18: Entergy (ETR[16]), 4.94% Dividend Yield: Another utility stock? Yep. Just think of it as a testament to the importance and reliability of the sector to income investors. The dividend yield for ETR is a healthy 4.94%, and like most other utility names, Entergy has a decent history of rising payouts. One key distinction with Entergy — it’s also an electricity wholesale producer.
#17: Host Hotels and Resorts Inc. (HST[17]), 5.07% Dividend Yield: Like Welltower, Host Hotels and Resorts is a REIT. Unlike Welltower, though (and as its name clearly suggests), Host Hotels and Resorts operates hotels, and directs the bulk of that income back to investors to support its current dividend yield of 5.07%. REITs must pay out at least 90% of their income to shareholders in the form of dividend to legally maintain its tax-advantaged status, and for that reason, it and Welltower aren’t the only REITs to appear in this list of dividend stocks.
#16: Ventas (VTR[18]), 5.23% Dividend Yield: Ventas is yet another REIT with a strong payout. VTR is more like Welltower than Host Hotels and Resorts in that it operates healthcare facilities. Specifically, its portfolio consists of a combination of senior housing communities, medical office buildings, nursing facilities, hospitals and more … a total of 1,300 properties in all (and it’s still not the last REIT on this list).
#15: National-Oilwell Varco (NOV[19]), 5.39% Dividend Yield: Like most other energy-related stocks, National-Oilwell Varco was a miserable performer in 2015, losing nearly half of its value. Unlike many of its sector peers and rivals, though, National-Oilwell Varco has remained profitable, and has pretty fiercely defended what has become a dividend yield of 5.39% thanks to the big pullback. NOV has remained profitable mostly because it leases equipment to explorers and drillers, and hasn’t been affected quite as harshly as other energy companies have.
#14: AT&T (T[20]), 5.52% Dividend Yield: Surely you didn’t think Verizon would appear on a list of dividend stocks that didn’t include AT&T, did you? The only difference between the two is, Verizon is paying 4.83%, while AT&T presently boasts a dividend yield of 5.52%. Don’t jump to the conclusion that T is a better way to play than VZ, however. Verizon arguably has more room for dividend growth, as AT&T already spends most of its cash flow on shareholders and has added new debt in recent years. And while its pairing with DirecTV has brought a bevy of new potential customers into the fold, it wasn’t a cheap acquisition[21] given its risk. How many more of those can AT&T afford if that’s the only growth plan it can come up with?
#13: Spectra Energy Partners (SEP[22]), 5.68% Distribution Yield: Incredibly enough, Spectra Energy Partners is the first MLP to show up on this list of strong dividend stocks to mull for 2016. It won’t be the last, however. MLPs — short for master limited partnerships — are tax-advantaged, publicly traded entities that facilitate the pass-through of income to investors the way conventional partnerships do. While theoretically any revenue-bearing operation could become an MLP, it’s a legal framework that lends itself to the nature of oil and gas pipelines and storage systems. It has been a troubled segment of the energy market of late, but the pullback from SEP has pumped up its yield to a healthy 5.68%. The question is: Can that payout continue?
#12: Las Vegas Sands (LVS[23]), 5.89% Dividend Yield: That’s not a misprint — casino owner and operator Las Vegas Sands is not only boasting a dividend yield of 5.89%, it has remained profitable against an industry headwind in Macau. Better yet, the company already announced an increase of more than 10% in 2016’s dividend payout, so the trailing yield figure understates what shareholders can expect to pocket in 2016.
#11: HCP, Inc. (HCP[24]), 5.91% Dividend Yield: The last REIT to appear on this list of dividend stocks worthy of consideration is the uncreatively named HCP. Like its aforementioned healthcare REIT peers, HCP deals in businesses such as senior living developments and medical offices, which are extremely stable sources of income that offer a great deal of growth potential as more baby boomers reach retirement age.

#10: Enterprise Products Partners, L.P. (EPD[26]), 6.17% Distribution Yield: Enterprise Products Partners is another MLP to — thanks to persistent weakness from the stock all year long — earn a spot on a list of dividend stocks to consider. EPD is the natural gas liquids business side of Enterprise Products Company, and operates more than 50,000 miles of pipelines for natural gas, NGL, crude oil and other products. Like Spectra Energy Partners, Enterprise Products Partners has technically remained profitable over the past few quarters, even while the industry has struggled. Between that and the fact that EPD was one of the first middlemen to secure an overseas supply deal[27] when the U.S. recently lifted the ban on the export of crude oil, its yield of 6.17% is surprisingly well-protected.
#9: Spectra Energy Corp. (SE[28]), 6.24% Dividend Yield: If the name rings a bell, it may be because its business counterpart, Spectra Energy Partners, was No. 13 on our list of strong dividend stocks. More important, Spectra Energy Corp. sports a yield of 6.24%. Just bear in mind the fate of one is largely tied to the fate of the other name as part of the MLP structure.
#8: ConocoPhillips (COP[29]), 6.27% Dividend Yield: Like Chevron Corporation, ConocoPhillips — the country’s third-largest integrated energy giant — is diversified across most facets of crude oil and natural gas. And unfortunately, COP has dropped as the fortunes of both commodities have dropped. On the other hand, for the same reason an investor might be willing to roll the dice on COP (anticipating at least some sort of stability for oil prices in 2016), COP may just be a worthy bet. The dividend payout of 6.27% in the meantime isn’t too shabby either.
#7: Blackstone (BX[30]), 6.45% Distribution Yield: Blackstone is one of the world’s premier global investment firms, investing in everything from private and public businesses to real estate, and offering products such as hedge and closed-end funds. It boasts $92 billion in assets under management. Just think of it as a conservative, actively managed ETF that dishes out income at a rate of 6.45%.
#6: CenturyLink (CTL[31]), 8.36% Dividend Yield: Despite being the third-biggest telecom name in the country in terms of total lines served, most investors have never heard of CenturyLink. That’s too bad, because its dividend yield of 8.36% is quite attractive. Granted, the quarterly payout took a hit in 2013, and the company has yet to boost it in the meantime. The top and bottom lines are starting to edge upward again, however, so it’s possible a shareholder-friendly CenturyLink could start to increase its dividend in the foreseeable future.
#5: Energy Transfer Equity LP (ETE[32]), 8.46% Distribution Yield: Like the Spectra duo, Energy Transfer Equity LP is another MLP that has struggled of late thanks to slumping oil and gas prices. As has been the case with so many other pipeline plays, though, the 59% setback that ETE suffered in the second half of 2015 may have been overdone, meaning the market might not let the current yield of 8.46% linger much longer. (Note that Energy Transfer Equity is slated to acquire another pipeline name appearing later on this list.)
#4: KKR & Co. L.P. (KKR[33]), 8.86% Distribution Yield: Like Blackstone, KKR is a major private equity firm that has made its coin on leveraged buyouts, boasting some $400 billion in PE deals over its lifetime. Its portfolio includes companies such as Alliant Insurance Services, GoDaddy Inc (GDDY[34]) and Toys “R” Us., but it also manages real estate holdings and manages hedge funds as well. More important to income investors, it’s presently paying out 8.86% of its value as dividends.
#3: Williams Companies (WMB[35]), 10.32% Dividend Yield: Yes, another pipeline play, and yes, another MLP … sort of. Williams Companies is majority owner of Williams Partners LP (WPZ[36]), though WMB isn’t technically an MLP in itself. The structure is irrelevant, though. What matters is that it offers a dividend yield of 10.32% … at least for the time being. Energy Transfer Equity LP will complete a merger with Williams Companies sometime in 2016, which will have an impact on …
#2: Williams Partners LP (WPZ[36]), 12.54% Distribution Yield: Williams Partners LP is 60% owned by the aforementioned Williams Companies, so it’s no surprise the two entities are found side-by-side on this list of dividend stocks. They aren’t perfect twins, however, and the other 40% of WPZ shares can and do move independently. That’s how Williams Partners sports a notably better yield of 12.54%.
#1: Energy Transfer Partners LP (ETP[37]), 12.63% Distribution Yield: Finally, pipeline MLP Energy Transfer Partners LP offers a payout of 12.63% of the stock’s price. Yes, this is the companion stock to (and is owned by, technically) Energy Transfer Equity LP, which was found in the No. 5 slot of our list of fat dividend stocks. It’s also one of the most polarizing names among income investors because the outcome of the union of Energy Transfer Equity and Williams Companies isn’t clear, but will certainly be felt by ETP owners one way or another. Whatever the case, if you can stomach the uncertainty and if you believe that consolidation can sustain strong payouts in the struggling energy industry, ETP may well be worth a look.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

More From InvestorPlace

• The 7 Best Monthly Dividend Stocks for 2016[38]
• The 10 Best Index Funds for 2016 … And Beyond![39]
• The 10 Best Vanguard Funds to Buy for 2016[40]

Endnotes:

1. [Image]: http://investorplace.com/hot-topics/best-of-2015-16/
2. The 6 Best Dividend Stocks to Buy in 2016: http://investorplace.com/2015/12/the-6-best-dividend-stocks-to-buy-in-2016/
3. DUK: //investorplace.com/stock-quotes/duk-stock-quote/
4. PM: //investorplace.com/stock-quotes/pm-stock-quote/
5. RAI: //investorplace.com/stock-quotes/rai-stock-quote/
6. MO: //investorplace.com/stock-quotes/mo-stock-quote/
7. SO: //investorplace.com/stock-quotes/so-stock-quote/
8. wading a little further into wind and solar now: http://www.southerncompany.com/news/2015-11-30-spc-roserock.cshtml
9. IP: //investorplace.com/stock-quotes/ip-stock-quote/
10. CVX: //investorplace.com/stock-quotes/cvx-stock-quote/
11. OPEC remains adamant about sustaining its output: http://www.wsj.com/articles/opec-sees-fall-in-non-opec-oil-supplies-as-low-prices-hit-its-rivals-1449745603
12. Next Page – #20-#11: http://investorplace.com/2015/12/2016-americas-25-high-yielding-large-cap-dividend-stocks/2/
13. VZ: //investorplace.com/stock-quotes/vz-stock-quote/
14. streaming television service: http://www.verizon.com/home/livetv?incid=myvzhero2_MYVZ_TV_HERO_CTA_3_get_the_free_app
15. HCN: //investorplace.com/stock-quotes/hcn-stock-quote/
16. ETR: //investorplace.com/stock-quotes/etr-stock-quote/
17. HST: //investorplace.com/stock-quotes/hst-stock-quote/
18. VTR: //investorplace.com/stock-quotes/vtr-stock-quote/
19. NOV: //investorplace.com/stock-quotes/nov-stock-quote/
20. T: //investorplace.com/stock-quotes/t-stock-quote/
21. it wasn’t a cheap acquisition: http://time.com/104428/att-directv-merger/
22. SEP: //investorplace.com/stock-quotes/sep-stock-quote/
23. LVS: //investorplace.com/stock-quotes/lvs-stock-quote/
24. HCP: //investorplace.com/stock-quotes/hcp-stock-quote/
25. Next Page – #10-#1: http://investorplace.com/2015/12/2016-americas-25-high-yielding-large-cap-dividend-stocks/3/
26. EPD: //investorplace.com/stock-quotes/epd-stock-quote/
27. secure an overseas supply deal: http://www.wsj.com/articles/u-s-to-export-crude-oil-cargo-in-early-january-1450894791
28. SE: //investorplace.com/stock-quotes/se-stock-quote/
29. COP: //investorplace.com/stock-quotes/cop-stock-quote/
30. BX: //investorplace.com/stock-quotes/bx-stock-quote/
31. CTL: //investorplace.com/stock-quotes/ctl-stock-quote/
32. ETE: //investorplace.com/stock-quotes/ete-stock-quote/
33. KKR: //investorplace.com/stock-quotes/kkr-stock-quote/
34. GDDY: //investorplace.com/stock-quotes/gddy-stock-quote/
35. WMB: //investorplace.com/stock-quotes/wmb-stock-quote/
36. WPZ: //investorplace.com/stock-quotes/wpz-stock-quote/
37. ETP: //investorplace.com/stock-quotes/etp-stock-quote/
38. The 7 Best Monthly Dividend Stocks for 2016: http://investorplace.com/2015/12/7-best-monthly-dividend-stocks-2016/
39. The 10 Best Index Funds for 2016 … And Beyond!: http://investorplace.com/2015/12/best-index-funds-investing/
40. The 10 Best Vanguard Funds to Buy for 2016: http://investorplace.com/2015/12/best-vanguard-funds-2016/

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