5 High-Yield Dividend Stocks Paying Up to 13.4%

Dividend Stocks for Yield

The stock market has soared lately, but you already knew that.

Why it has soared is important. While you can point to many reasons, analysts credit most of the rally to hopes that the Federal Reserve will stop raising interest rates.

And we have good reason to believe they will. With fears of a looming trade war, a soft housing market, and tame inflation expectations, central bankers have little reason to raise interest rates. That’s bad news for retirees hoping to earn more money on their savings.

So, if interest rates stop rising, where will you be able find more investment income? You could do worse than high-yield dividend stocks. If the bond market doesn’t provide much in the way of income, you can still find decent payouts in stocks.

The good news? Some safe blue-chip businesses are veritable cash cows. I have highlighted five of them in the below chart:

(Source: Yahoo! Finance, last accessed March 1, 2019.)

Let’s do a quick rundown on these stocks.

Altria Group Inc (NYSE:MO) and Philip Morris International Inc. (NYSE:PM) both pay some of the best yields around. Wall Street, however, looks down on these businesses because their future earnings growth looks meager at best. The cigarette industry matured decades ago. And people will likely smoke less and less as time goes on.

Here’s the thing: Because their industry is no longer growing, tobacco makers have little need to invest in new property, plants, or equipment. As a result, these companies pay out most of their cash flows to shareholders. Altria and Philip Morris pay upfront yields of six and five percent, respectively. If you include buybacks, these stocks deliver total shareholder yields of nearly 10%. With yields that high, anyone who sits around patiently reinvesting their distributions will crush the broader stock market as the years go by. It’s a wonderful thing to watch.

Magellan Midstream Partners, L.P. (NYSE:MMP) is one of my favorite stocks for the next decade. The partnership owns thousands of miles of pipelines across the country, shipping energy commodities in exchange for a fee. Thanks to America’s shale revolution, drillers have unlocked vast swaths of new supplies around the world. To transport all of this new oil and gas, the industry will need to invest billions of dollars into new infrastructure. For Magellan, this should translate into growing profits (and dividends) for years to come.

Brookfield Renewable Partners LP (NYSE:BEP) wants to do something green for the planet. It also wants to create some green for investors. This clean power company provides electricity to thousands of households nationwide. Customers turn their lights on, Brookfield investors get a seven-percent dividend—a dividend, by the way, that has rolled in like clockwork for nearly 20 years. If interest rates stop rising, utilities like Brookfield will provide some of the best returns around.

The story at propane distributor AmeriGas Partners, L.P. (NYSE:APU) resembles those of Altria and Phillip Morris. Many investors disregard this partnership because its earnings growth looks weak. Natural gas continues to displace propane as a heating fuel. The occasional warm winter can always clip the company’s cash flow, but because management doesn’t have to invest in expansion, they can pay out most of their profits to unitholders.

AmeriGas units pay an upfront yield of nearly 14%. And that dividend has increased every year for over a decade as management raises prices for existing customers. No, this stock won’t impress friends, but the investors cashing the partnership’s oversized checks don’t seem to mind.