While there is a significant amount of uncertainty in the election, markets and fiscal policy, investors should look to invest where they can find more certainty and comfort. One option for investors is to look for solid stocks with high dividend yields. To avoid the pitfalls of high yield, stocks with increasing prices and growing dividends will be able to produce total returns above the market.
The stocks listed below are each up more than 30% in 2012, have reasonable valuations and produce a dividend yield of 8% or more. These stocks are a good fit for investors seeking high dividend yields from stocks with sound analyst backing.
PennyMac Mortgage Investment Trust (NYSE:PMT) is a specialty REIT with a market cap of $1.24 billion. The stock is up 45% in 2912. However, PennyMac is only trading at a price earnings ratio of 8.4 and 1.25 times book value.
PennyMac had an increase in revenues of 113% and an increase in earnings of 34% in the last quarter compared to a year earlier. The company has no long-term debt.
PennyMac has a current dividend yield of 9.12% with a payout ratio of 72%. The dividend was increased 10% in the past year.
Newcastle Investment Corp. (NYSE:NCT) is a REIT focused on investing in and actively managing opportunistic investments in real estate related assets. The stock is up 64% in 2012. Newcastle appears undervalued with a price earnings ratio of 5.4 compared to the REIT industry average of 78.
Newcastle Investment's board of directors approved a 10% increase in its Q3 dividend to $0.22 per common share, compared to the previous quarter's dividend of $0.20 per common share. Newcastle has a current dividend yield of 9.12% with a payout ratio of 72%. The dividend was increased 10% in the past year.
While Newcastle missed earnings last quarter by $0.02 per share, it has 4 outperform and 3 buy ratings by analyst following the company. Newcastle has a mean analyst recommendation of Buy with a 1.70 rating.
Calumet Specialty Products Partners (CLMT) is a master limited partnership and is a leading independent producer of high-quality, specialty hydrocarbon products in North America. Calumet had earnings of $1.14 per share last quarter which more than doubled the consensus of $0.54. Calumet's stock is up 44% year to date.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.