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Double Digit Dividends
Over 135 S&P 500 companies have either increased their dividend payouts or initiated a dividend policy in 2010. After facing near collapse, many financial firms, in addition to those in other industries, have excess cash which they are allocating to shareholder payouts. Furthermore, many firms which experienced a pullback in June continue to maintain their dividend policies, which have resulted in double-digit yields. Although there are at least 16 companies which currently carry double-digit dividend yields, the table below shows seven of the more common high-dividend-paying stocks.
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REITs Keep At It
Real estate investment trusts (REITs) typically distribute a large portion of their earnings in the form of dividends - Anworth Mortgage Asset Corporation, Annaly Capital Management and MFA Financial are no exception. When analyzing REITs, explore beyond their attractive dividend yields; investors should look at trends in funds from operations and adjusted funds from operations to determine if the current dividend policy is likely to change in the upcoming years.
Real estate investments should be included in a diverse portfolio. For those who either do not have the necessary funds or time to purchase a physical property, or simply do not want exposure to an illiquid asset, REITs provide an ideal investment alternative. Adding the aforementioned high dividend paying REITs to one's portfolio accomplishes both objectives of diversification and income generation.
Dividends Gone Wild
Alpine Total Dynamic Dividend Fund is a closed-end management investment company which operates with the objective of investing in high income yielding securities in domestic and foreign markets.
While utilities are generally known to have high dividend payouts, usually yielding approximately 5-6%, healthcare and technology based firms do not have a similar reputation. However, PDL BioPharma and Frontier Communications Corporation are exceptions to the trend. The telecommunications industry of the technology sector does however typically produce respectable payouts, but none as high as that of FTR.
PDL BioPharma paid three dividends in 2009, totaling $2.67 (including the special dividend of $1.67) and repurchased $73 million dollars worth of convertible notes which could have diluted stockholders. With only seven employees, the company manages antibody humanization patents.
The Bottom Line
Dividends have a strong contribution to an investment portfolio. The previously listed stocks currently offer some of the highest yields that the equity markets have to offer. (Discover the issues that complicate these payouts for investors. To learn more, see Dividend Facts You May Not Know.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 10 Tips For The Successful Long-Term Investor
| Company | Yield % |
| Apollo Investment Corporation (Nasdaq:AINV) | 11.65 |
| Anworth Mortgage Asset Corporation (NYSE:ANH) | 15.02 |
| Alpine Total Dynamic Dividend (NYSE:AOD) | 12.11 |
| Frontier Communications Corporation (NYSE:FTR) | 13.33 |
| Annaly Capital Management (NYSE:NLY) | 15.47 |
| MFA Mortgage Investments (NYSE:MFA) | 10.48 |
| PDL BioPharma (Nasdaq:PDLI) | 16.89 |
REITs Keep At It
Real estate investment trusts (REITs) typically distribute a large portion of their earnings in the form of dividends - Anworth Mortgage Asset Corporation, Annaly Capital Management and MFA Financial are no exception. When analyzing REITs, explore beyond their attractive dividend yields; investors should look at trends in funds from operations and adjusted funds from operations to determine if the current dividend policy is likely to change in the upcoming years.
Real estate investments should be included in a diverse portfolio. For those who either do not have the necessary funds or time to purchase a physical property, or simply do not want exposure to an illiquid asset, REITs provide an ideal investment alternative. Adding the aforementioned high dividend paying REITs to one's portfolio accomplishes both objectives of diversification and income generation.
Alpine Total Dynamic Dividend Fund is a closed-end management investment company which operates with the objective of investing in high income yielding securities in domestic and foreign markets.
While utilities are generally known to have high dividend payouts, usually yielding approximately 5-6%, healthcare and technology based firms do not have a similar reputation. However, PDL BioPharma and Frontier Communications Corporation are exceptions to the trend. The telecommunications industry of the technology sector does however typically produce respectable payouts, but none as high as that of FTR.
PDL BioPharma paid three dividends in 2009, totaling $2.67 (including the special dividend of $1.67) and repurchased $73 million dollars worth of convertible notes which could have diluted stockholders. With only seven employees, the company manages antibody humanization patents.
The Bottom Line
Dividends have a strong contribution to an investment portfolio. The previously listed stocks currently offer some of the highest yields that the equity markets have to offer. (Discover the issues that complicate these payouts for investors. To learn more, see Dividend Facts You May Not Know.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Arthur Pinkasovitch
Arthur Pinkasovitch is an Analyst at Investopedia and is currently a CFA level 3 candidate. His investment focus is centered on energy and commodities as well as applying basic economics principles to everyday investment analysis. Arthur teaches introductory corporate finance at a local college and is part-owner of a Russian Grocery Store. You can follow Arthur on Twitter.
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