7 High Dividend Stocks to Buy Now
By: Ned Piplovic,
While income investors always seek high dividend stocks for income distributions, all investors can benefit from adding high dividend stocks to their portfolio.
Income investors’ main focus is identifying high dividend stocks to maximize the dividend income generated by their portfolio. To this end, income investors often trade strong capital gains for higher dividend yields. However, it is important to confirm that the high dividend yields are driven by strong dividend growth and not by falling share prices.
Even investors whose primary focus is capital gains, should consider adding dividend-paying equities as a component of their overall investment strategy. While most dividend distributions are subject to taxation at ordinary income rates, Qualified Dividends eliminate that disadvantage as they are taxed at the same rates as capital gains.
The seven equities below, selected with a Dividend Screener tool available at DividendInvestor.com, do not have the highest yields on the market. However, all picks are high dividend stocks with market capitalization of at least $1 billion that delivered positive total returns over the trailing 12 months.
7 High Dividend Stocks to Buy Now: #7
Pattern Energy Group, Inc. (NASDAQ:PEGI)
Dividend Yield: 8.2%
Pattern Energy Group, Inc. operates as an integrated renewable energy company through two primary business segments — Operating Business and Development Business. The company has paid dividends every year since its formation in late 2012. Over the past five years, the company has enhanced its total annual dividend distribution amount by 32%. This level of advancement corresponds to an average growth rate of 5.8% per year since 2013.
The current $0.422 quarterly distribution amount is equivalent to a $1.69 annualized dividend distribution and a 6.2% forward dividend yield. While the dividend amount has risen every year, the share price has risen more than 34% over just the trailing 12 months. This rapid share price advancement has pushed the current dividend yield 8.2% below Pattern Energy’s own five-year average yield of 6.76%.
The share price experienced significant volatility following the company’s formation in 2013. However, since dropping to just 6% above its all-time low in February 2018, the share price has been following a relatively steady uptrend with significantly less volatility. Just over the last year, the share price has advanced 40% above the 52-week low and combined with the dividend income distributions for a total return of nearly 50% over the trailing 12 months
7 High Dividend Stocks to Buy Now: #6
Omega Healthcare Investors, Inc. (NYSE:OHI)
Dividend Yield: 6.7%
Omega Healthcare Investors is a real estate investment trust (REIT) that finances the sale, leaseback, construction and renovation of long-term health care facilities in the United States and the United Kingdom.
Since resuming dividend distributions in late 2003, this REIT has advanced its annual dividend payout by 340%, which corresponds to an average annual growth rate of 9.7%. Omega Healthcare’s current $0.66 quarterly payout converts to a $2.64 annualized dividend and yields 6.74%
This yield level is 127% higher than the 2.96% simple average yield of the overall Financial sector, as well as 80% above the 3.75% average yield of the entire Healthcare Facilities industry segment. Additionally, OHI’s current yield also outperformed the 5.5% average yield of the segment’s only dividend-paying companies by 23%.
While struggling a little over the last few years, the share price rose over the past year to deliver a combined total return of 27% over the trailing 12 months. Because of the share price volatility, the total return over the last five years has only been 35%.
7 High Dividend Stocks to Buy Now: #5
Cedar Fair, L.P. (NYSE:FUN)
Dividend Yield: 6.55%
Based in Sandusky, Ohio, and founded in 1983, Cedar Fair, L.P. owns and operates 13 amusement and water parks, two hotels and three campgrounds adjacent to the company’s park locations in the United States and Canada.
Since cutting its dividend in the aftermath of the 2008 financial crisis, the company has enhanced its annual dividend amount by 270%, which corresponds to an average growth rate of 15.6% per year. Furthermore, the company has boosted its annual dividend payout 18 times in the past two decades.
The current share price is only 5.1% higher than it was one year ago and has produced a total return of 12% over the trailing 12 months. However, since dropping to its four-year low in late June, the share price jumped nearly 26% to its 52-week high in early September 2019. While slightly below the 52-week high, the current share price still marks a 24% advancement over the June low. Furthermore, this stock’s asset appreciation, combined with its dividend distributions, has created a total return of more than 55% over the last five years.
7 High Dividend Stocks to Buy Now: #4
Gaming & Leisure Properties, Inc. (NASDAQ:GLPI)
Dividend Yield: 7.1%
Headquartered in Wyomissing, Pennsylvania, and incorporated in 2013, Gaming and Leisure Properties, Inc. is a self-administered and self-managed REIT that focuses primarily on acquiring, financing and owning real property for leasing to gaming operators.
The current $0.68 quarterly dividend is nearly 8% above last year’s $0.63 quarterly amount. This new quarterly dividend corresponds to a $2.72 annual payout and yields 7.1%. The company has hiked its dividend every year since its initial distribution in 2015. A total dividend enhancement of 31% over the last five years corresponds to an average annual growth rate of 5.5%.
After a brief pullback in late 2018, the share price recovered fully and delivered a 10% gain over the past year. Even with the 2018 correction, the share price still has advanced nearly 70% since its five-year low in January 2016.
The 10% one-year asset appreciation and the 7.1% dividend income yield came together to deliver a total return of nearly 20% just over the trailing 12 months. Over the past three years, GLPI’s shareholders enjoyed a total return of more than 35%. Lastly, even with a moderate 25% gain, the share price capital gains combined with the dividend distributions for a total return on shareholders’ investment of more than 62% over the past five years.
7 High Dividend Stocks to Buy Now: #3
TPG Specialty Lending, Inc. (NYSE:TSLX)
Dividend Yield: 7.43%
TPG Specialty Lending, Inc. is a business development company that provides senior secured loans, mezzanine debt, non-control structured equity and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations and refinancing.
The company’s current $0.39 quarterly dividend corresponds to a $1.56 annualized payout, which is equivalent to a 7.43% forward dividend yield. While TPG has not increased its regular dividend payouts since initiating distributions in 2014, the company has distributed three to four special dividend payouts in both 2017 and 2018. The company already has distributed three special dividends in 2019. If the past two years are any indication of TPG’s dividend distribution pattern, the company will most likely deliver another special dividend payout in December 2019.
The share price declined more than 20% from its five-year high in August 2018 before reversing direction and embarking on its current uptrend. Despite increased volatility, the share price has regained most of its recent losses and currently trades less than 3% below its five-year high from 2017.
Just over the trailing 12 months, the company’s share price advancement and dividend income have combined for a total return of 11%. Over the last three years, the total return was nearly 43% and the total return over the past five years is approaching 75%.
7 High Dividend Stocks to Buy Now: #2
Arbor Realty Trust, Inc. (NYSE:ABR)
Dividend Yield: 9%
This REIT boosted its quarterly dividend distribution by 3.6% from $0.28 in the previous quarter to $0.29 for its most recent distribution in early September. This new payout corresponds to a $1.16 annualized distribution and a 9% forward dividend yield. Additionally, the current dividend yield is also 4.5% above the company’s own 8.6% five-year yield average.
Arbor Realty’s current 9% yield is more than triple the 2.82% simple average yield of the entire Financial sector. Additionally, the REIT’s current yield is 136% higher than the 3.8% yield average of the company’s peers in the Diversified REITs industry segment. Furthermore, Arbor Realty’s current yield is also almost 35% above the 6.67% simple average yield of the segment’s only dividend-paying equities.
In addition to a steady dividend income, ABR has rewarded its shareholders with robust asset appreciation. Over the trailing 12 months, the company has delivered a total return of more than 25%. The shareholders more than doubled their investment over the past three years with a total return of 110%. Furthermore, total returns have been nearly 160% over the last five years.
7 High Dividend Stocks to Buy Now: #1
Invesco Mortgage Capital, Inc. (NYSE:IVR)
Dividend Yield: 11.2%
Headquartered in Atlanta, Georgia, and incorporated in 2008, Invesco Mortgage Capital, Inc. is a holding company and a real estate investment trust (REIT) that invests in residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), residential and commercial mortgage loans, as well as other real estate-related financing arrangements.
After having a declining dividend payout for five years, the company has increased its annual dividend payout amount over the past three consecutive years. The current $0.45 quarterly dividend is 7.1% higher than the previous quarter’s $0.42 distribution.
The share price has recovered fully from the overall market pullback in late 2018 and has added a few points to the dividend yield for a combined total return of 12.3% over the trailing 12-month period. However, long-term returns were significantly better as they were 35% for the last three years and more than 51% over the past three years.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.