7 Dividend Stocks Yielding 7 Percent and More
Sharing the profit
In a troubled market environment, some investors have considered selling their stocks. But where are you going to go, considering the bond market is also in turmoil amid rising interest rates? You could park cash in a CD at your local bank, but those returns barely keep up with the rate of inflation. An alternative, then, is taking shelter in high-yield dividend stocks offering a guaranteed return via their distributions -- even if the shares of these stocks may not go much higher. Here are seven high-yield dividend stocks to consider, all of which return at least 7 percent annually to shareholders in the form of their profit-sharing distributions alone.
AllianceBernstein Holding (NYSE: AB)
The investing business is challenging in 2018 because many players, from mutual funds giant Vanguard to fintech startups like Robinhood, offer super-cheap platforms as they chase massive investor bases. That means low margins in most cases, and makes it awfully hard to run an investing business profitably unless you're the industry leader. Well, awfully hard is not impossible. AllianceBernstein has found a profitable niche catering to well-off clients with deep pockets, and you don't need a lot of those big clients for it to make a difference. High net-worth investors and institutional players have given AllianceBernstein a massive $550 billion portfolio of assets under management.
Current yield: 7.6 percent
Tallgrass Energy Partners (TEP)
Income-generating oil and gas pipeline operators are a no-brainer for anyone chasing yield. These "midstream" energy companies are insulated from the cost and uncertainty of energy exploration, and volatility of energy prices. Tallgrass is simply a middle man, charging companies that use its infrastructure to move fossil fuels. And while there's not a ton of growth here, the business is incredibly reliable. That supports a juicy and regular dividend yield. The icing on the cake is that as TEP stock has prospered, its investors have, too. Its dividend has roughly tripled in the last four years even as the share price has been rather sleepy.
Current yield: 9.9 percent
Triangle Capital Corp. (TCAP)
Triangle Capital is a business development company, or BDC. It provides financing to mid-sized companies, which often need more expertise and capital than they can get at a local community bank but don't qualify for the attention of firms like Goldman Sachs Group (GS). The typical loan is in the ballpark of $5 million to $35 million. Triangle Capital gets a nice interest payment, and thanks to a focus on relatively established and profitable companies, it can have a high degree of confidence that it will see full repayment. That shows up in TCAP financials, as the firm is consistently profitable and pays a reliable dividend.
Current yield: 10.2 percent
Ladder Capital Corp. (LADR)
Ladder Capital is an investment company dedicated to commercial real estate such as shopping malls or office parks. Though LADR doesn't own properties, it's still structured as a real estate investment trust, or REIT. This special kind of corporation is granted a generous tax structure as long as it returns 90 percent of taxable income to shareholders. That's a mandate for big dividends. Some commercial real estate, especially retail, can be challenging in the age of e-commerce. But Ladder Capital gets paid first as the lender and doesn't have to worry about margins on blue jeans or flat screen TVs. That helps fuel a big-time yield.
Current yield: 8.3 percent
Medical Properties Trust (MPW)
This is another REIT worth watching. As the name implies, this fund invests only in real estate in the health care sector. This includes community hospitals, rehabilitation centers and urgent care facilities. If you're worried about market volatility in 2018, there's no better long-term bet than health care. Aging baby boomers are increasing demand for care, inflationary trends guarantee pricing power in the sector and even in an economic downturn you'll see Americans cut back on everything but their medical treatment. MPW is well-positioned to capitalize on this trend, and as a REIT it'll surely share that success in the form of reliable dividends.
Current yield: 7.7 percent
Enviva Partners (EVA)
Enviva Partners is a weird little stock, but one worth watching for its tremendous income potential. The $700 million limited partnership supplies utility-grade wood pellets to power generators, mainly in Europe. On one hand, that makes Enviva something like a coal company supplying firms with fuel to run their power plants. But thanks to a trick in European electricity regulation, wood energy -- referred to as biomass in utility jargon -- is allowable as an alternative and renewable source of power akin to wind or solar. It's a niche business without much growth, but long-term contracts with major power companies is a great way to get reliable income.
Current yield: 9.0 percent
Seaspan Corp. (SSW)
Seaspan owns and manages nearly 100 container ships. It's a capital-intensive business, but also a lucrative one that provides regular income as long as the ships are making their way from port to port. Shipping rates have fallen as a capacity glut was created by the commissioning of ultra-large ships. However, demand seems to be strong. Also, some of the weaker players have been forced to curtail operations in the rough environment. Investors can expect volatility on a share-price basis, but the juicy yield of Seaspan is reliable and the dividend safe as profits more than cover the outlays.
Current yield: 8.5 percent
Jeff Reeves is currently executive editor of InvestorPlace.com. He is a stock analyst and financial commentator with almost two decades of newsroom and markets experience, contributing to The Wall Street Journal network, USA Today, CNBC, TheStreet.com, Fox Business Channel and US News. Follow him on Twitter @JeffReevesIP.
