Dividend stocks promise quarterly payouts to stockholders, which makes them a stock of considerable interest to those with larger portfolios and those who are approaching retirement. We’ve assembled our top five picks for the highest yielding stocks you need to add to your portfolio today.
Highest Yielding Stocks to Pick Today
The stock market has always been the place to invest for the long-term. Anyone interested in a quick fix or lucrative earnings overnight are better served by speculative investments, like a portfolio comprised of a single rising company or a considerable investment in cryptocurrencies.
However, there is a way to have your cake and eat it too. By leveraging high dividend stocks in your portfolio, you can expect to receive considerable yields at the end of the quarter. The more you have invested in the company, the more you can expect to receive.
High dividend stocks are considered to yield around 4% or more at the end of the quarter. First-time investors may assume nascent and growing companies would yield more, but it is actually the tried and true corporations that tend to consistently produce yields and make shareholders happy.
Today, there are several companies that are considered low-risk and ready to give you the yields you want at the end of the quarter. As you age, want to expand their portfolio, or prepare for retirement, it’s a good idea to push for these unassuming stocks that can generate some serious cash.
We’ll be taking a look at the highest yielding stocks on the market today, discussing how we came to choose these top contenders, and wrapping up with some tips and tricks for investors that may not be familiar with high dividend stock investment.
Purchasing High Dividend Stocks
While we hope you do your research and become well-acquainted with the stock market before making your investments, let’s go over some of the basics of high dividend stocks.
Companies that sell stocks on the stock market have a choice to make. Either they can keep 100% of their earnings and invest the rest of it back into the company, or give out a percentage of their earnings as money to shareholders to incentivize long-term investment. These earnings, typically paid quarterly to the shareholders, are called dividends.
Dividend stocks are often preferred over other types of stocks simply due to the liquid nature of dividends. While your stocks continue to rise in value, you continue to get cash payments from the company that doesn’t interfere with your investment.
While low-risk, high dividend stocks are valuable investments, some swear by a different strategy—growth stocks. If you’re unaware of the difference between a growth stock and a dividend stock, here’s what you need to know:
Growth stocks sacrifice dividends in the hope of faster growth. Here’s the logic: companies that are willing to pay out dividends do not have any better use for the money other than to give it away. When holding a growth stock, the hope isn’t to take home dividends, but rather see growth in value that’s faster than the rest of the market.
This is why growth stocks may be better for younger investors, but dividend stocks remain much more helpful for older investors. At a younger age, your portfolio will be several orders smaller than the portfolio of someone at the age of 50. Therefore, a 4% dividend may not be as valuable as a 7% increase in the value of a growth stock-based portfolio.
Once you’re within five years or so of liquefying your investments, you should have enough capital to afford to focus your portfolio on dividend stocks. With such a large nest egg, 4% increases will be several times higher than they would have been 30 years ago.
In general, the larger your investment, the more valuable dividend stocks become. Only you can determine whether or not dividend stocks are more valuable for your portfolio compared to growth stocks or other forms in investment. We also strongly recommend consulting a broker before making such a decision.
How We Chose Our Stocks
We’ve chosen our top five highest dividend stocks based on consistently high yields. Dividend stocks are becoming harder to uncover. As the economy continues to recover and the stock market remains bullish, more and more companies are more interested in future investments than long-term growth via dividends.
For that reason, most (but not all) of the stocks on our list are trusts—or more specifically Real Estate Investment Trusts or REITs. These are required to hand out dividends to shareholders in exchange for tax burden relief in a variety of fashions.
Otherwise, we don’t personally hold any of these stocks and have only chosen these based on the numbers, current pricing, and trends that seem to point directly towards future success.
That all being said, invest wisely, and consider discussing the following high dividend stocks with your broker and see about adding them to your portfolio:
Top 5 Highest Yielding Stocks
Enbridge Liability Partners, LLC. (EEP)
This North American energy company is often recommended on high dividend stock lists due to its consistency, size, and staying power.
As an energy company, Enbridge Liability Partners is responsible for transporting millions of barrels of oil across Canada and into the United States. Despite recent tensions concerning tariffs between the two countries, this stock shows no signs of slowing down.
Forget 4% yields; Enbridge Liability Partners has consistently turned in a yield of 6-7% in the past 9 years and double-digit yields in the past 2. The low cost of this stock compared with its status as one of the highest yielding stocks on the market today make this stock a buy that’s easy for almost any broker to recommend.
The formidable Great White North also promises to export oil for years and decades to come—and the consistent need and value of crude oil means that Enbridge Liability Partners will stick around and hand out dividends for long after you liquidate your portfolio.
Arlington Asset Investment Corporation (AI)
Like the name would imply, this Arlington-based investment firm boasts high dividends and a stable stock price that can allure anyone that may be hesitant about investing in firms.
Investors may be a little confused about the process of investing in investors, but this firm has more than assuaged these confusions with dividend returns that are something of an anomaly in this bullish market
The dividend history for AI stock reveals that Arlington Assets Investment Corp. consistently yields double digits for its shareholders. These dividends are dispersed quarterly (with an extraneous monthly payment back in February of 2017) and can average anywhere between 15-20%.
We strongly recommend this stock for those approaching retirement age and want to take full advantage of a dividend reinvestment plan, or DRIP. Although the stock price remains low, the more you hold in AI, and the longer you hold it, the more you’ll see your investment compound with enough of an investment and a solid DRIP.
Physicians Realty Trust (DOC)
As we mentioned earlier, trusts and REITs are great for consistency, which comes in large part due to a requirement to pay dividends. When it comes to this healthcare and real estate trust, those dividends tend to be on the higher side of things.
Physicians Realty trust focuses their portfolio on leased real estate properties to major hospitals and physicians. The healthcare sector has always been a safe historical bet due to the constant need for healthcare in the economy. Because of this, this stock is stable and relatively consistent.
Unfortunately, we do need to make a note that there’s been a significant bearish trend for Physicians Realty Trust over the past few years. While we fully expect this to end soon, it makes little difference on the high yields you can expect.
Consistent 4% quarterly dividends have been stable and continue to be paid out. With the stability of the healthcare sector and previous dividend history in mind, we see no reason to be fearful of this cheap and generally stable stock.
Wheeler Real Estate Investment Trust (WHLR)
We’ll be honest—this one’s a little risky.
While REITs as a whole are generally safe best, Wheeler Real Estate Investment Trust doesn’t look pretty when it comes to a 5-year chart. In fact, the current prices seem like the bottoming out of a multi-year bearish performance.
Which is exactly why we’re recommending this dividend stock.
Wheeler Real Estate Investment Trust isn’t a large company—and primarily operates out of holdings in the American southeast. However, their yields aren’t just high, but monthly.
This REIT has yielded more than 10% since 2015, and the best part? Those payouts were monthly. You’ll need significant holdings in this stock to start generating any real capital, but once that investment is there, there’s nowhere for WHLR to go but up.
We’re big fans of this stock for its consistently high yields and monthly payouts, which makes this an easy choice for investors looking for compound interest opportunities.
STORE Capital REIT (STOR)
Our final stock choice has a lower yield than the others—but its safety and relative stability makes it a good choice to bolster your portfolio with some low-risk REITs.
STORE Capital is another real estate investment trust that focuses on middle market, as opposed to the focus on healthcare like Physicians’ Realty Trust. STORE, in this case, stands for Single Tenant Operational Real Estate.
Growth for the stock has been stable and continues to truck along, regardless of policy or economic changes. Looking at their dividend history reveals 3-4% quarterly payouts for years, and in some cases, 5% payouts were reported.
STORE Capital isn’t as flashy as some of the higher risk or highest yielding stocks on our list, but it is the consistency of the stock that makes it appear in many buy lists for many investors. It’s a great, stable stock that won’t rock the boat and pay out predictably.
Remember that predictable payments, much like lower-risk investments like those made in mutual funds or treasury notes, aren’t designed for those who need to liquidate soon. If you’re in the market for the long haul, a stock like STORE Capital is designed to keep your money safe, stable, and growing.
As we’ve mentioned before, buying and selling dividend stock is going require a different mindset then buying or selling growth stock. Keep in mind that dividend stock is something you’ll need leverage in your portfolio as you age, and especially in the years before liquidation.
If you find yourself in the middle of your investing career, perhaps consider a healthy balance of growth stocks and stable, high-yielding dividend stocks, and then shifted over as time passes.
As with any stocks, dividend stocks, while recommended in later years, aren’t intended to be short-term holds. As the bull market continues, it can be easy to purchase volitive stocks and expect the next 12 months to perform like the previous.
However, like cryptocurrencies, market corrections can happen quickly, sharply, and sometimes, permanently. If you’re hoping to get your money back in more than five years, avoid the markets entirely and go for a U.S. Treasury note or a Certificate of Deposit, of CD.
Otherwise, we strongly recommend you consider these highest yielding stocks on the market today. Any of these five stocks promise to bring a varied amount of yields, and each presents a unique situation in which they would be the best stock for you.
As always, make sure you diversify your portfolio to not hold only a specific stock or a specific type of stock. If you are looking to liquidate shortly, talk to a broker and make sure you’re prepared to pull out your assets at the right time and with the right companies.
So call your broker, set up a DRIP, and start pulling in the fruits of your speculative labor by letting dividend stocks do the work of generating capital for you.