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High dividend stocks are very popular among defensive investors, as they are great options in inflationary environments. In addition, defensive players also try to achieve sustainable profits by picking stocks that are able to consistently pay out fat dividends. Central banks around the world have been using expansionary monetary policies to stimulate the economy during the past few years. We are concerned that the Fed’s ultra-low interest rate policy, as well as other stimulating policies, may lead to inflation. Even if we don’t see 5+% inflation rates, dividend stocks that yield 3% or more are much better alternatives to 10-year Treasuries that yield around 2%.

Below, we compiled a list of high dividend US stocks with superior long-term return potentials. These stocks yield at least 50% more than 10-year Treasuries, and will probably boost their dividends significantly over the next 10 years. All companies have at least $5 billion market cap, a dividend yield higher than 3% and EPS expected growth rate is 15% annually for the next 5 years. The market data is sourced from Finviz.

Ticker

Company

Dividend Yield

EPS growth next 5 years

YTD Return

(NYSE:BLK)

BlackRock, Inc.

3.28%

18.15%

-9.42%

(NYSE:SCCO)

Southern Copper Corp.

7.99%

15.15%

-32.26%

(NYSE:KMI)

Kinder Morgan, Inc.

4.06%

26.06%

-2.35%

(NYSE:TWC)

Time Warner Cable Inc.

3.15%

15.26%

-4.88%

(NYSE:WMB)

Williams Companies, Inc.

3.21%

19.55%

29.29%

(NYSE:PLD)

Prologis, Inc.

4.01%

16.70%

-9.49%

(NYSE:NUE)

Nucor Corporation

3.66%

34.90%

-7.11%

(NYSE:ETP)

Energy Transfer Partners

8.16%

16.67%

-10.81%

(NYSE:ETE)

Energy Transfer Equity

6.62%

20.81%

2.58%

(NASDAQ:MXIM)

Maxim Integrated Products

3.48%

17.33%

10.91%

BlackRock, Inc. (BLK) is one of the best asset management companies in the United States. It has a dividend yield of 3.28% and its EPS is expected to grow at 18.15% per year in the next five years. BLK has a market cap of $30B, a P/E ratio of 13.21 and lost 9.42% since the beginning of this year. Bill Miller’s Legg Mason Capital Management had $160 million invested in BLK shares as of September 30.

Southern Copper Corp (SCCO), an integrated copper producer, has a dividend yield of 7.99% and its EPS is expected to grow at 15.15% per year in the next five years. SCCO has a market cap of $25.9B, a P/E ratio of 11.4, and lost 32.26% since the beginning of this year. John Burbank’s Passport Capital invested $27.5 million in this stock.

Kinder Morgan, Inc. (KMI) is a pipeline transportation and energy storage company. It has a dividend yield of 4.06% and its EPS is expected to grow at 26.06% per year in the next five years. It has a market cap of $20.9B, a P/E ratio of 41.62, and lost 2.35% since the beginning of this year. Jean-Marie Eveillard was bullish about KMI. His First Eagle Investment Management had $150+ million invested in KMI stocks.

Time Warner Cable Inc. (TWC) is a cable operator in US. It has a dividend yield of 3.15% and its EPS is expected to grow at 15.26% per year in the next five years. TWC has a market cap of $19.5B, a P/E ratio of 14.15, and lost 4.88% since the beginning of this year. Andreas Halvorsen’s Viking Global invested $400+ million in TWC.

Williams Companies, Inc. (WMB) is a natural gas company. It has a dividend yield of 3.21% and its EPS is expected to grow at 19.55% per year in the next five years. WMB has a market cap of $18.3B, a P/E ratio of 18.31, and returned 29.29% since the beginning of this year. Eric Mindich’s Eton Park Capital Management had $231 million invested in WMB.

Prologis, Inc. (PLD), a real estate investment trust, has a dividend yield of 4.01%, and its EPS is expected to grow at 16.70% per year in the next five years. PLD has a market cap of $12.8B, and lost 9.49% since the beginning of this year. D. E. Shaw invested nearly $100 million in this stock.

Nucor Corporation (NUE) is a manufacturer of steel products. It has a dividend yield of 3.66%, and its EPS is expected to grow at 34.90% per year in the next five years. NUE has a market cap of $12.5B, a P/E ratio of 19.99, and lost 7.11% since the beginning of this year. Jim Simons is bullish about NUE. His Renaissance Technologies owned $25.2 million of NUE at the end of September.

Energy Transfer Partners LP (ETP) is engaged in natural gas operations. It has a dividend yield of 8.16% and its EPS is expected to grow at 16.67% per year in the next five years. ETP has a market cap of $9.8B, a P/E ratio of 32.46, and lost 10.81% since the beginning of this year. Jean-Marie Eveillard’s First Eagle Investment Management reported to own $4.1 million worth of ETP shares at the end of the third quarter.

Energy Transfer Equity, L.P. (ETE) has two segments: Investment in ETP and Investment in Regency. The former injects and holds natural gas in its Bammel storage facility, while the latter is a net seller of NGLs, condensate and natural gas. It has a dividend yield of 6.62% and its EPS is expected to grow at 20.81% per year in the next five years. ETE has a market cap of $8.4B, a P/E ratio of 27.99, and returned 2.58% since the beginning of this year. Chuck Royce, Jean-Marie Eveillard and Jim Simons all invested over $10 million in ETE.

Maxim Integrated Products Inc. (MXIM) produces and sells linear and mixed-signal integrated circuits. It has a dividend yield of 3.48% and its EPS is expected to grow at 17.33% per year in the next five years. MXIM has a market cap of $7.4B, a P/E ratio of 15.16, and returned 10.91% since the beginning of this year. Jim Simons was bullish about MXIM as well. His fund invested $36.5 million in this stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 High Dividend Stocks With Superior Long-Term Return Potential