This article originally appeared on The Div-Net September 22, 2011
The 10-year Treasury is yielding 1.85% as of this writing. I currently have no exposure to bonds in my portfolio. This anemic yield is one of those reasons. Why would I want to lock in my capital for such a low yield, especially for a period as long as 10 years? Treasuries are, of course, extremely liquid and can be sold virtually at any time. Of course, if yields rise the value of your bonds go down. In that case, you'll be accepting a very low yield and also have a investment vehicle that will be losing value when the yields finally rise. No, thanks.
Let's instead look at three stocks that are currently yielding at least twice the benchmark 10-year Treasury. These stocks not only have double the yield payout as the 10-year, but also have a good chance for price appreciation as these businesses produce products that people need and will continue to buy. Double the yield and the chance of capital gains on top of it sounds pretty good to me.