High Dividend Stocks: 33 High Yield Stocks For Income

While the industry is intensely competitive, Verizon’s advanced network technologies and leading network coverage help it maintain its huge subscriber base. Verizon’s revenue stream is also regular and reliable since it is engaged in providing a non-discretionary service.

There is also little room for new entrants because the telecom industry is very mature. Spectrum licenses are extremely expensive and infrequently available, and there are only so many wireless subscribers in the market to fund these costs. Moreover, huge spending is required to develop new technologies. Verizon has been at forefront of developing 5G wireless technology.

Verizon has also made acquisitions to strengthen its wireless offering (bought Vodafone’s remaining 45% stake in Verizon Wireless in 2014) and branch into mobile advertising solutions (acquired AOL in 2015 and Yahoo! in 2017).

While growth is a challenge, the company’s high dividend remains in good shape. Verizon and its predecessors have paid uninterrupted dividends for more than 30 years while increasing dividends for 11 consecutive years.

Management also recently announced a $10 billion cost savings plan which it believes will fund the company’s dividend through cash savings in 2022.

Verizon’s dividend has grown by 4.5% per year over the last decade, but annual dividend growth has decelerated to closer to 2% more recently. Going forward, Verizon’s dividend will likely continue growing by 2% to 3% per year.

Read More: Verizon High Dividend Stock Analysis

19) National Retail Properties (NNN)

Dividend Yield: 5.1% Forward P/E Ratio: 14.2(as of 2/9/18)

Dividend Safety Score: 94 Dividend Growth Score: 18

Sector: Real Estate Industry: Retail REIT

Dividend Growth Streak: 28 years

High Dividend Stocks National Retail Properties Dividend

National Retail Properties is a real estate investment trust that was founded in 1984. The REIT owns and develops properties and leases them under long-term contracts to retail tenants. It has more than 2,500 properties spread across 48 U.S. states which are leased to more than 400 diverse tenants across 37 lines of trade.

The REIToriginates single-tenant triple-net leases to customers across different sectors with convenience stores contributing to 17% of its annual rent, full-service restaurants (12%), limited service restaurants (8%), auto service (7%), family entertainment centers (6%), and health and fitness (6%).

Roughly 60% of National Retail Properties’ rent comes from its top 25 tenants, most of which have stable businesses with a weighted average rent coverage ratio of 3.6x.

In addition to its large customer base, National Retail Properties has a strong competitive advantage in the form of its geographically diversified and well-located properties. The company’s occupancy rate has never dipped below 96.4% over the last 13 years, for example.

National Retail’s average remaining lease term is 11.6 years and more than 60% of leases are not due for renewal in the next eight years, providing great cash flow visibility. Management also maintains a very conservative amount of financial leverage for a REIT, lessening its dependence on capital markets for growth financing.

National Retail Properties has paid higher dividends for the last 28 consecutive years and has increased its dividend by 2.1% per year over the last two decades.

Since REITs pay out most of their income as a dividend and are generally mature, capital-intensive businesses, dividend growth is often relatively low but reliable. National Retail’s dividend will likely continue growing at a 2-4% annual pace.

Read More: National Retail Properties High Dividend Stock Analysis

18) Southern Company (SO)

Dividend Yield: 5.2% Forward P/E Ratio: 14.4(as of 2/9/18)

Dividend Safety Score: 67   Dividend Growth Score: 18

Sector: Utilities Industry: Electric Power

Dividend Growth Streak: 17 years

High Dividend Stocks Southern Company Dividend

Southern Company is one of the largest producers of electricity in the U.S. and has been in business for more than 100 years. The Atlanta-based company has more than 100 years of experience and provides service to more than 9 million customers, split about equally between electric and gas.

Southern Company owns electric utilities in the southeastern U.S. and has natural gas distribution utilities in seven states. Since about 90% of Southern Company’s earnings come from regulated subsidiaries, its cash flows are safe, regular, and reliable.

Regulated utility businesses also require huge amount of investment in the construction of power plants, transmission lines and distribution networks. This creates high barriers to entry and low business risks because people will continue buying electricity even during a recession.

Additionally, Southern Company enjoys a favorable regulatory framework in the Southeast region and operates in four of the top eight friendly states in the U.S. This helps ensure that the company will earn a fair return on its large investments.

The company’s $8 billion acquisition of AGL Resources in 2016 has further diversified Southern Company’s operating assets (natural gas capacity), areas of operations (Midwest region), and regulatory risk. The combined entity has a more balanced electric and gas customer mix and bigger geographical footprint, which further reduces its risk profile while providing new growth opportunities.

With that said, income investors need to be aware that Southern Company is facing a number of challenges with several multibillion dollar projects. Most recently, the company announced it was ceasing its “clean coal” plant in Mississippi after cost overruns and regulatory pushback.

Its Vogtle nuclear plant in Georgia also faces additional costs and delays after a major supplier (Toshiba’s Westinghouse) declared bankruptcy. While Toshiba will provide Southern Company with a few billion dollars, there is still plenty of risk.

Fortunately, the U.S. Department of Energy announced the Vogtle project will receive an additional $3.7 billion in loan guarantees. The project is expected to be completed by 2022.

Investors favor utility stocks because of their safe and regular dividend payouts. Southern Company has paid uninterrupted quarterly dividends for more than 65 consecutive years and grown its dividend at a 3.7% annual rate over the past decade.

Following the AGL acquisition, Southern Company is expected to grow earnings per share around 4-5% per year. This implies that the utility should be able to keep increasing its dividend by 3-4% annually. The company’s 17-year dividend growth streak will likely continue for many years to come.

Read More: Southern Company High Dividend Stock Analysis

17) PPL Corporation (PPL)

Dividend Yield: 5.3% Forward P/E Ratio: 13.1(as of 2/9/18)

Dividend Safety Score: 80 Dividend Growth Score: 3

Sector: Utilities Industry: Electric Power

Dividend Growth Streak: 16 years

PPL High Dividend

PPL is a pure-play regulated utility company involved in the electricity distribution business in Pennsylvania, Kentucky, Virginia, and Tennessee, as well as the United Kingdom. It also has a natural gas transmission and power generation business in Kentucky.

The company has over 10 million utility customers in the U.S. and U.K. and has more than 100 years of operating experience.

PPL’s transmission and distribution infrastructure are its growth drivers. Compared to the average U.S. utility, PPL receives a higher return on equity in the U.K. and from its transmission infrastructure in Kentucky and Pennsylvania.

Since most of the company’s revenues come from regulated operations, its earnings are highly secure and predictable. In fact, PPL’s sales dipped by just 5% during the financial crisis, and the company continued raising its dividend each year.

PPL also has good regulatory and geographic diversification with more than 57% of its earnings from the U.K., 25% from Kentucky, and 23% from Pennsylvania.

The stock has sold off sharply over the last couple of months despite issuing a decent earnings report on November 1 and increasing its guidance for the year.

Investors seem most worried about the company’s U.K. business. Specifically, currency exchange rate headwinds and potential regulatory knock-on effects from Brexit are top of mind.

On the currency front, the pound weakened during 2017, reducing the amount of profits PPL reports in U.S. dollars. Fortunately, the company is fully hedged in 2018 and 2019, so it seems like management has properly addressed this risk to limit its impact.

The murkier issue is the U.K.’s regulatory framework for utilities, especially in light of the evolving political environment. PPL’s U.K. utilities currently operate under a regulatory framework that runs through 2023, providing a predictable rate of return on its projects assuming nothing changes.

However, there appears to be increased concerns about the price of electricity, with talks of implementing price caps on energy bills. The good news is that PPL’s business in the U.K. is focused on transmission, not power generation. In other words, PPLs’ operations would seem to be a relatively lower contributor to the overall price of electricity, but there is still a good deal of uncertainty.

A material revision to the current regulatory framework in the U.K. would obviously be bad news for PPL given its major growth projects in the region, relatively high debt load, and payout ratio near 70%. Management will hopefully provide additional clarity when the company reports earnings on February 15, but the selloff seems to be driven more by fear than facts at this point.

PPL has grown dividends at an annual rate of 3.3% over the last decade. Its earnings per share are expected to grow at 5-6% per year through 2020, with PPL’s rate base also growing around 5% annually between 2017 and 2020.

As a result, PPL should have sufficient resources to increase the dividend by a planned 4% per year through the end of the decade, outpacing the rate of inflation to protect income investors’ purchasing power.

The company last increased its dividend by 4% in February 2017, in line with PPL’s commitment to raise dividends by 4% annually. This marks the company’s 16th consecutive annual dividend increase.

Read More: PPL High Dividend Stock Analysis

16) Realty Income Corporation (O)

Dividend Yield: 5.4% Forward P/E Ratio: 15.6(as of 2/9/18)

Dividend Safety Score: 79   Dividend Growth Score: 27

Sector: Real Estate Industry: Retail REIT

Dividend Growth Streak: 25 years

Realty Income is a real estate investment trust that was founded in 1969 and is mainly engaged in the asset management of commercial properties in the U.S.

The company’s portfolio consists of more than 5,000 properties across 49 states, a large majority of which are single-tenant properties.

Realty Income has over 250 commercial tenants (the largest is just 7% of rent) from more than 45different industries, providing the company with excellent cash flow diversification.

Real estate is all about “location, location, location” (especially in retail, which accounts for 80% of the company’s rental revenue). A property’s location is its biggest value driver.

Realty Income’s strategy of purchasing freestanding, single-tenant properties in key locations has given it a strong competitive advantage. A consistently high occupancy ratio (>96%) indicates the success of its portfolio strategy.

The company’s revenues are predictable and secure with all its properties rented out under long-term leases to a well-diversified customer base spread across different industries and states.

The cash flows are also stable as customers mostly belong to the non-discretionary service industry, with 40% of the revenue also coming from customers with investment-grade credit ratings.

REITs have to pay out 90% of their income under law as dividends, which imply that they have to rely on debt and equity issuance to fund growth.

However, with a conservative capital structure, Realty Income has plenty of room to raise money and buy more properties to fuel growth.

Turning to the dividend, Realty Income has great record, growing dividends by 5.3% per year over the last 20 years and paying consecutive monthly dividends for nearly 50 years.

High dividend stock investors can likely expect future dividend growth of 3-5% per year going forward, similar to the company’s earnings growth trajectory.

Read More: Realty Income High Dividend Stock Analysis

15) AT&T (T)

Dividend Yield: 5.6% Forward P/E Ratio: 10.4(as of 2/9/18)

Dividend Safety Score: 85 Dividend Growth Score: 11

Sector: Telecommunication Industry: Diversified Communications

Dividend Growth Streak: 34 years

High Dividend Stocks AT&T T Dividend

AT&T is the world’s largest telecom company with $160 billion revenue last year. The multinational communications and digital entertainment conglomerate is headquartered in Texas and was founded in 1875. AT&T provides mobile and fixed telephone services, data and internet services, and also pay-TV services through DirecTV.

The company operates through four divisions – Business Solutions (43% of sales), Entertainment (31%), Consumer Mobility (20%), and International (4%). Business Solutions accounts for just over half of the company’s total segment profit and includes wireless and voice services provided to corporations and governments.

AT&T has a strong competitive advantage being the second largest wireless solution provider in the U.S. The wireless industry is mature and has significant entry barriers owing to costly infrastructure and spectrum requirements.

Moreover, large companies like AT&T and Verizon enjoy strong brand recognition and have huge subscriber bases they can leverage to keep prices low enough to further discourage new entrants. The company is expected to roll out 5G wireless services this year to further strengthen its market position.

Unlike Verizon, AT&T has aggressively expanded its business outside of wireless services in recent years (wireless operations previously accounted for about 75% of the company’s income). AT&T acquired DirecTV for $49 billion in 2015 to become the largest pay-TV provider in the world and is focused on cost synergies and bundling its services to drive earnings higher.

AT&T is also hopeful to complete its $85 billion acquisition of media giant Time Warner, but it remains locked in a legal battle with the Department of Justice over antitrust concerns.

If the deal eventually closes with no major concessions, Time Warner would account for 15% of AT&T’s total revenues and add a new business for AT&T – content. Over 100 million customers subscribe to AT&T’s TV, mobile, and broadband services, so AT&T’s bundled subscription packages could be further differentiated with the increased content flexibility provided by Time Warner. AT&T could also enhance its advertising business with Time Warner’s assets.

AT&T is the only telecom company that is also a dividend aristocrat. The telecom giant has not only been paying dividends for 34 consecutive years but has also increased payments during this period.

AT&T’s dividend has grown by 3.7% per year over the last 10 years and will likely grow by 2-3% per year going forward as the company digests its large deals and restores improves the health of its balance sheet.

AT&T’s stock price took a hit last fall as investors worried more about cord-cutting as the company reported a record traditional pay-TV subscriber loss for the third quarter. There is also uncertainty about the Time Warner deal gaining the final regulatory approval it needs to move forward.

While AT&T carries a very high debt load, the company appears to remain on solid ground to continue paying its dividend. Management is also committed to the payout and expects to return leverage to historical levels within four years of the Time Warner deal closing.

Read More: AT&T High Dividend Stock Analysis

14) Magellan Midstream Partners, L.P. (MMP)

Dividend Yield: 5.6% Forward P/E Ratio: 14.3(as of 2/9/18)

Dividend Safety Score: 61   Dividend Growth Score: 67

Sector: Energy Industry: Oil & Gas Production MLP

Dividend Growth Streak: 18 years

MMP Distribution

Magellan Midstream Partners engages in the transportation, storage, and distribution of crude oil and refined petroleum products. Unlike most MLPs, the partnership enjoys an investment-grade credit rating and has no incentive distribution rights, retaining all of its cash flow.

The company’s refined products business accounts for 60% of total operating profits, with crude oil (31%) and marine storage (9%) making up the remainder. Magellan enjoys primarily fee-based revenue that comes from an attractive portfolio of energy infrastructure assets.

Magellan’s cash flow is largely recurring in nature and offers a cushion to the partnership from oil and gas price weakness because profits are primarily driven by throughput volume and tariffs.

Magellan Midstream Partners also owns the longest refined petroleum products pipeline system in the U.S. and has access to roughly half of the country’s refining capacity, providing numerous growth opportunities.

The partnership also has 100 million barrels of storage capacity for petroleum products. Magellan’s strategic advantage lies in the massive transportation and storage infrastructure, which has been built over the years in strategic locations and prevents most new competition from challenging it.

Magellan Midstream Partners has a strong track record of distribution growth, too. The partnership successfully increased its cash distributions even during periods characterized by unfavorable commodity prices, proving its resilience even in tough times.

The partnership has grown its dividend consistently for more than 15 years in a row following its IPO. Magellan’s dividend increased by 11% per year over the last decade, and management targets 8% annual distribution growth over the next few years

Magellan Midstream Partners is a good choice for long-term investors who are risk averse but want some of the high income provided by MLPs. The partnership focuses on expansion opportunities in a disciplined manner, which seems likely to continue fueling upper single-digits dividend growth.

Read More: Magellan Midstream Partners High Dividend Stock Analysis

13) Enbridge (ENB)

Dividend Yield: 5.7% Forward P/E Ratio: 15.3(as of 2/9/18)

Dividend Safety Score: 55 Dividend Growth Score: 54

Sector: Energy Industry: Oil and Gas Storage and Transportation

Dividend Growth Streak: 22 years

Enbridge was founded in 1949 and is the largest midstream energy company in North America today. The business is involved in gathering, storing, processing, and transporting oil and gas across some of the continent’s most vital energy-producing regions.

Enbridge is structured as a conglomerate, composed of numerous subsidiary MLPs and energy funds. However, the company is more than a midstream energy business. After acquiring Spectra Energy (including Union Gas) in 2016 for $22 billion, for example, Enbridge became one of the largest natural gas utilities in Canada.

The company’s primary businesses enjoy defensive characteristics that have helped Enbridge reliably pay uninterrupted dividends for more than two decades.

The pipeline business is extremely capital intensive, must comply with complex regulations (limiting new entrants), and benefits from long-term, take or pay contracts that have limited volume risk and almost no direct exposure to volatile commodity prices.

On the utility side, Enbridge enjoys predictable regulated returns on its investments. This is a recession-resistant industry that essentially operates as a government-sanctioned monopoly. Enbridge has solid relationships with regulators and enjoys a return on its investments near 10%, which is one of the highest rates in the sector.

Enbridge has increased its dividend for 22 consecutive years, recording 11% annualized payout growth over that time. Dividend growth remains strong as management announced another 10% payout hike for 2018. In fact, Enbridge plans to grow its dividend by 10% annually through 2020 as the company plows ahead with its substantial growth projects.

With a targeted adjusted cash flow from operations payout ratio of 65% or less, the company’s dividend is on solid ground and should provide plenty of financial flexibility as Enbridge pours capital into its development projects.

12) National Health Investors (NHI)

Dividend Yield: 5.8% Forward P/E Ratio: 13.2(as of 2/9/18)

Dividend Safety Score: 76 Dividend Growth Score: 70

Sector: Real Estate Industry: Healthcare REIT

Dividend Growth Streak: 15 years

National Health Investors is a self-managed real estate investment trust that was incorporated in 1991. It is engaged in the ownership and financing of healthcare properties such as assisted living facilities, senior living campuses, skilled nursing facilities, specialty hospitals, entrance-fee communities and medical office buildings

The REIT owns a diversified portfolio of over 200 properties, of which approximately 60% are senior housing properties while the rest primarily consist of skilled nursing facilities. National Health rents these properties to around 30 healthcare operators under long-term leases with annual escalators that make the cash flow more secure and predictable.

National Health Investors has a business model which is almost immune to the vagaries of the economic cycle, given that its operators provide essential healthcare services. The rapidly-growing aging population provides a lot of fuel for long-term growth, too. In fact, the 75+ year-old population is expected to double over the next 20 years.

The REIT has increased its dividend for 15 consecutive years and has delivered 6.5% annual dividend growth over the past decade. Income investors can likely expect mid-single-digit dividend growth to continue.

11) Tanger Factory Outlet Centers (SKT)

Dividend Yield: 6.0%  Forward P/E Ratio: 12.0 (as of 2/9/18)

Dividend Safety Score: 70 Dividend Growth Score: 27

Sector: Real Estate  Industry: Retail REIT

Dividend Growth Streak: 24 years

Tanger outlet center

Founded in 1981, Tanger Factory Outlet Centers is a REIT that develops, owns (including 50% stakes), and operates more than 40 upscale outlet shopping centers.

Tanger’s 3,100 store locations can be found across 22 coastal states in the U.S. and Canada and are leased out to more than 500 high-end retailers. No tenant accounts for more than 8% of total rental revenues, and Tanger has historically had no trouble filling its locations with an occupancy rate above 95% since 1981.

With more than three decades of experience in the outlet industry, Tanger has developed a strong brand and established long-standing relationships with many of its tenants. Its tenant base is also diverse and comprises of well-known brands such as Banana Republic Factory Store, Barneys New York, Brooks Brothers, Calvin Klein, Coach, Gap Outlet, Giorgio Armani, Hugo Boss Factory Store, and others.

Its outlet centers house popular brands together at one place, which is quite convenient for customers and enables greater foot traffic (more than 188 million shoppers visiting its centres last year). Tanger’s industry experience, extensive development expertise, and strong retail relationships are its key competitive advantages.

While many mall-based retailers are struggling in the age of Amazon, Tanger’s exclusive focus on premium outlet centers, where high-end retailers offer deeply discounted clearance items, remains a differentiating factor. The company has also invested heavily to turn its malls into more of experience centers, embracing the latest in technology and luxury.

As a result, the company has thus far been able to maintain one of the industry’s bset occupancy rates while continuing to raise rent on expiring leases and realize same-center net operating income growth each quarter.

Tanger has been increasing dividends for 24 consecutive years and last raised its payout by 5.4%. Its dividend has grown by 9.8% annually over the last five years and will likely increase by 4% to 6% per year going forward.

Read More: Tanger Factor Outlet Centers High Dividend Stock Analysis

10) EQT Midstream Partners, LP (EQM)

Dividend Yield: 6.1% Forward P/E Ratio: 11.5(as of 2/9/18)

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Disclaimer: Simply Safe Dividends is not a registered investment advisor or broker/dealer. All information provided in this article and on the Simply Safe Dividends website is provided for ...

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