18 High-Yield Dividend Stocks for Strong Income

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 |  Includes: CTL, DUK, EPD, ETR, EXC, FE, HCP, KMP, LLY, MO, NLY, PPL, RAI, SCCO, T, VZ, WPZ
by: Insider Monkey

We prefer high dividend stocks over long-term Treasuries. The 10-year Treasury bond has an extremely low yield to maturity at this moment. The bonds are performing spectacularly in this down market, but over the next 10 years they aren’t good investments. An investor who bets $100 on a high dividend stock that yields more than 5% will perform better than the 10-year Treasury holders if the high dividend stock doesn’t go down more than 25% over the next 10 years. We don’t think that’s very likely for a diversified portfolio of high dividend yielding stocks. That’s why we like high dividend stocks.

We compiled a list of 18 large-cap stocks that also pay fat dividend checks regularly. All companies in this list have a market capitalization above $10 billion and a dividend yield of at least 5.0%.

  1. CenturyLink, Inc. (NYSE:CTL): CenturyLink is an integrated communications company. CTL recently traded at $33.9 and has an 8.5% dividend yield. CTL gained 1.4% during the past 12 months. The stock has a market cap of $21 billion and P/E ratio of 14.4. Jim Simons’ Renaissance Technologies is a prominent hedge fund with a CTL position at the end of March (see Simons’ top holdings here).
  2. Southern Copper Corp. (NYSE:SCCO): Southern Copper Corporation provides mining, smelting, and refining of mineral properties in South America. SCCO recently traded at $29.9 and has a 7.3% dividend yield. SCCO gained 8.7% during the past 12 months. The stock has a market cap of $25.5 billion and P/E ratio of 12.9. Jim Simons’ Renaissance Technologies and Ken Fisher Fisher Asset Management had the largest CTL positions at the end of March.
  3. Entergy Corporation (NYSE:ETR): Entergy Corporation is an integrated energy company operating in the United States. Entergy Corporation is also the second-largest nuclear generator in the United States. ETR recently traded at $62.1 and has a 5.3% dividend yield. ETR lost 15.8% during the past 12 months. The stock has a market cap of $11.1 billion and P/E ratio of 8.9. Glen Dubin's Highbridge Capital, Clint Carlson's Carlson Capital and Cliff Asness' AQR Capital hold the largest positions in ETR among 300+ funds we are tracking.
  4. FirstEnergy Corp. (NYSE:FE): Firstenergy is a diversified energy company. FE recently traded at $41.8 and has a 5.2% dividend yield. FE gained 23% during the past 12 months. The stock has a market cap of $17.6 billion and P/E ratio of 23.8.
  5. Kinder Morgan Energy Partners LP (NYSE:KMP): Kinder Morgan Energy Partners provides energy transportation and storage services. KMP recently traded at $66 and has a 6.8% dividend yield. KMP gained 5.7% during the past 12 months. The stock has a market cap of $22.2 billion and P/E ratio of 116. In the past 5 years, KMP increased its dividend payments by 7.1% annually. Michael Messner's Seminole Capital holds the largest KMP position among the 300-plus funds we are tracking (click here to see Michael Messner’s other favorite stocks).
  6. HCP, Inc. (NYSE:HCP): HCP is an independent hybrid real estate investment trust. HCP recently traded at $33.3 and has a 5.8% dividend yield. HCP gained 3.1% during the past 12 months. The stock has a market cap of $13.6 billion and P/E ratio of 29.3.
  7. AT&T, Inc. (NYSE:T): AT&T provides telecommunication services worldwide. T recently traded at $28.1 and has a 6% dividend yield. T gained 11.7% during the past 12 months. The stock has a market cap of $168.7 billion and P/E ratio of 8.6. In the past five years, T increased its dividend payments 5.28% on average. Phill Gross’ Adage Capital has the largest position in T, holding nearly $400M of the stock. Cliff Asness, Ken Griffin, George Soros and D.E. Shaw are also among T investors.
  8. Reynolds American Inc. (NYSE:RAI): Reynolds American Inc. provides cigarette and other tobacco products in the United States. RAI recently traded at $36 and has a 6% dividend yield. RAI gained 32.8% during the past 12 months. The stock has a market cap of $20.7 billion and P/E ratio of 15.4.
  9. Annaly Capital Management, Inc. (NYSE:NLY): Annaly Capital Management is a real estate investment trust. NLY recently traded at $17.9 and has a 14.4% dividend yield. NLY gained 19.2% during the past 12 months. The stock has a market cap of $11.3 billion and P/E ratio of 6.3.
  10. Progress Energy Inc. (PGN): Progress Energy is a utility holding company. PGN recently traded at $46.6 and has a 5.3% dividend yield. PGN gained 18.1% during the past 12 months. The stock has a market cap of $13.8 billion and P/E ratio of 16.2.
  11. PPL Corporation (NYSE:PPL): PPL Corporation is an energy and utility holding company. PPL recently traded at $27.3 and has a 5.1% dividend yield. PPL gained 7.8% during the past 12 months. The stock has a market cap of $15.8 billion and P/E ratio of 10.9.
  12. Enterprise Products Partners LP (NYSE:EPD): Enterprise Products Partners L.P. provides midstream energy services. EPD recently traded at $39.3 and has a 5.9% dividend yield. EPD gained 15.8% during the past 12 months. The stock has a market cap of $34.6 billion and P/E ratio of 25.9.
  13. Altria Group Inc. (NYSE:MO): Altria Group provides cigarettes, smokeless products, and wine worldwide. MO recently traded at $25.9 and has a 5.9% dividend yield. MO gained 19.9% during the past 12 months. The stock has a market cap of $53.2 billion and P/E ratio of 15.6. Tom Russo had more than $150 million in MO at the end of March 2011.
  14. Eli Lilly & Co. (NYSE:LLY): Eli Lilly provides pharmaceutical products worldwide. LLY recently traded at $35.1 and has a 5.6% dividend yield. LLY gained 7.9% during the past 12 months. The stock has a market cap of $40.5 billion and P/E ratio of 8.2.
  15. Verizon Communications Inc. (NYSE:VZ): Verizon provides communication services. VZ recently traded at $34.8 and has a 5.6% dividend yield. VZ gained 24.9% during the past 12 months. The stock has a market cap of $99.3 billion and P/E ratio of 15.7. Cramer also recommended Verizon twice in the past week. In light of recent labor problems, Cramer said that Verizon needs to remove the costs of operating landlines, as they are not making the money Verizon needs them to in order to justify operations. Recently, Jim Simons’ Medallion Fund initiated a $114 Million position in Verizon.
  16. Duke Energy Corporation (NYSE:DUK): Duke Energy Corporation operates as an energy company in the Americas. DUK recently traded at $18.3 and has a 5.4% dividend yield. DUK gained 13.8% during the past 12 months. The stock has a market cap of $24.5 billion and P/E ratio of 11.9.
  17. Exelon Corp. (NYSE:EXC): Exelon Corporation is a utility services holding company in the United States. EXC recently traded at $41.9 and has a 5% dividend yield. EXC gained 8.7% during the past 12 months. The stock has a market cap of $27.8 billion and P/E ratio of 10.5.
  18. Williams Partners L.P. (NYSE:WPZ): Williams Partners provides various natural gas and oil related services in the United States. WPZ recently traded at $50.9 and has a 5.5% dividend yield. WPZ gained 29.8% during the past 12 months. The stock has a market cap of $15.4 billion and P/E ratio of 17.1.

Market data was obtained from Finviz.

Disclosure: I am long T, FE, CTL.