Forget High Yield CDs, think High Yield Dividend Stocks
The term 'high yield cd' means nothing in 2011 - 2012, you have to turn to high yield securities, and that means dividend stocks. Mastery turns to New York Mortgage Trust, Inc. (NYMT), CenturyLink, Inc. (CTL) and Vale (VALE).
Why settle for a crappy 1% or 2% return for a bank holding your money for a year or more when you can get a better return from a decent dividend stock?
New York Mortgage Trust, Inc. (NYMT) pays out 25 cents every quarter, that clocks in at a 13.89% dividend yield for the year. NYMT shares have held up in 2011, they have a 3.45% YTD return. New York Mortgage Trust trades at $7.23 a share, the stock is trading in the middle of its 52-week range of $6.04 to $7.98.
NYMT is a self-advised real estate investment trust (REIT). What we like about them is a large part of NYMT’s portfolio is in LIBOR-adjusting business loans, which yield more as rates increase.
CenturyLink, Inc. (CTL) is our next play, they pay a 73 cent dividend every quarter which comes to a 8.23% annual yield. CTL shares have come down around 10% since summer, they now trade around $35.
Zacks called CTL a 'value stock' earlier this month, they said:
There is a lot of value, however. In addition to a P/E under 15, which is what I use as a cut-off for value stocks, it also has a price-to-book ratio of 1.0. A P/B under 3.0 usually indicates "value."
And then there is the yield. Yes, the 8.1% yield IS correct. The company's yield has averaged 5.4% over the last 5 years. Not too shabby.
With CenturyLink, value investors are trading earnings growth for dividend yield. Given what's gone on the last few years, the dividend yield is looking mighty attractive.
Last up is badly Brazilian mining giant Vale (VALE), its stock price just touched a new 52-week low today. VALE shares are at $21, which clocks its dividend at a 8.29% annual yield. The danger is the company may balk on its plans to payout that high yield in 2012.
Vale shares have fallen ever since they reported Q3 net income of $7.89 billion, a decrease from Q2 net income of $10.28 billion. Add to that their balance sheet showed $16.24 billion in cash for the Q3 2011, a decrease from $22.57 billion in Q2. There are risks but now that Vale have hit a new 52-week low it may be time to make a small position.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Italy: Prime Minister Resigns After Referendum Defeat | Financial Sense
- A Look At This Week's "Other" Big Event: What To Expect From Mario Draghi On Thursday | ZeroHedge
- A Banana Republic In The Making - "The Glue Of Reason In India Is Flaking" | ZeroHedge
- Morgan Stanley Set To Slash 2017 Broker Bonuses With 10% Increase In "Pay Grid" Thresholds | ZeroHedge
- Power To The People: John Lennon's Legacy Lives On | ZeroHedge
- Supreme Court Rules On Insider Trading For First Time In 20 Years: Why It Matters | ZeroHedge
- Auditor Deloitte Fined A Record $8 Million For Massive Fraud | ZeroHedge
The most relevant financial news and articles from the Internets
- 19 burning questions we have after the mind-boggling 'Westworld' season finale... | Business Insider
- The 20 best books of the year, according to readers | Business Insider
- 21,000 Rohingya Muslims are fleeing Myanmar to escape '... | Business Insider
- Fitbit is buying Pebble — here's what that means... | Business Insider
- Ubisoft makes VR games cross-platform capable | Business Insider
- Watch the mysterious trailer for the new... | Business Insider
- Apple will try to address the battery issue that's causing... | Business Insider