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 $22.57 billion in Q2. There are risks but now that Vale have hit a new 52-week low it may be time to make a small position.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- ($XXII) 22nd Century Groups Gets NYSE Approval, VIRTU is DMM | ZeroHedge
- Phil Davis on the Money Talk Show | ZeroHedge
- India Backs Russia's "Legitimate Interests" In Ukraine | ZeroHedge
- Russia Threatens Retaliation To Sanctions, Announces Support For Crimean Referendum | ZeroHedge
- The Dollar’s Long Term Decline | Financial Sense
- THe LauNCH OF THE USS OBaMaCaRe... | ZeroHedge
- WWE: Sold to You, Sir | iBankCoin.com
The most relevant financial news and articles from the Internets
- LeBron James Hates The NBA's Short-Sleeve Jerseys | Business Insider
- Chef Thomas Keller Responds To The Damning Health Inspection Of His $310-A-Head... | Business Insider
- Virginia Town is Best Place in the U.S. to Raise Kids | BusinessWeek
- The Truth About 'The Most Interesting Man In The World' | Business Insider
- 2012 Honda CR-V | BusinessWeek
- A Bellwether Says The Severe Winter Hurt Advisor Recruitment | Business Insider
- Sheryl Sandberg Wants To Ban The Word 'Bossy' | Business Insider