In today’s unpredictable market, investors who are approaching or entering retirement need higher yields without the risk and volatility. We’ve identified five high-yield stocks that provide investors stability, sustainability and peace of mind in the long term. They represent telecommunications, business equipment and oil and natural gas pipeline industries.
CenturyLink, Inc. (NYSE:CTL): CTL’s dividends have grown by 64.6 over the past five years, according to this Seeking Alpha article. Its forward annual dividend yield is 8 while its trailing annual dividend yield is 10.6It is among the top ten holdings of the notoriously safe James Balanced: Golden Rainbow Fund (GLRBX), as noted here.
Compared to its competitors, CTL holds its own. With market capitalization of $20.71 billion, its quarterly revenue growth is $148.6. This compares to AT&T Inc.’s (NYSE:T) 2.2 quarterly growth and Verizon Communications Inc.’s (NYSE:VZ) 2.8. CTL’s gross margin is 63.58, while T’s is 56.91 and VZ’s is 59.69. Price to earnings ratio for CTL is $16.97, $16.09 for VZ, and $8.23 for T. In light of doubts cast by the US Department of Justice’s anti-trust lawsuit against T, which bars it from purchasing T-Mobile (OTCQX:DTEGY) as discussed here, CTL ranged in price around $34.21 Friday. Prices ranged from $31.75 to $46.87 for the past 52 weeks.
Though this Seeking Alpha article questions the sustainability of CTL’s dividends, the company, which is in a sector with a stable outlook, is a strong contender for investors seeking higher yields. Its ex-dividend date was September 1.
Pitney Bowes Inc. (NYSE:PBI): With its impressive dividend yield of 7.3, PBI certainly grabs the attention of investors seeking high yields. Its quarterly revenue growth is 1.3, compared to 2.4 for Siemens AG (SI) and 1.9 for Xerox Corp. (NYSE:XRX). PBI’s earnings per share of $1.66 pale in comparison to SI’s $7.34 but look better than XRX’s $0.70. PBI’s price to earnings ratio is $11.61, SI’s is $13.73, and XRX’s is $11.45.
Many experts feel that PBI’s dividend is unsustainable, as mentioned here and here. Trading down a little on Friday around $19.22. its 52-week range is $18.12 to $26.36. We like PBI’s beta coefficient of 1.12, even though it is lower than its competition.
The one metric we found that sets PBI apart from its competition is its 158.17 return on equity, which indicates effective management. SI reported an 18.11 return on equity, and XRX reported 8.35. PBI’s ex-dividend date is Sept. 28, 2011.
Nustar Energy L.P (NYSE:NS): NS has received a lot of attention lately, thanks to its eye-catching dividend yield of 7.4. This Seeking Alpha article includes NS on its list of “14 Large-Cap MLP Stocks For Dividend Lovers” noting its dividend’s 4.35 annual increase over the past five years. Another Seeking Alpha article includes NS on its list of high dividend stocks that were recommended by Mad Money’s Jim Cramer. Yet another article at The Motley Fool includes it on a list of “The 25 Highest Yielding MLPs”.
NS’s price to earnings ratio is $18.55, which compares to BP PLC’s (NYSE:BP) $5.81. NS showed quarterly revenue growth of 41.3, compared to BP’s 37.50. Earnings per share for NS are $3.12 compared to BP’s $6.28. NS was trading around $57.75 Friday, near its 52-week low of $51.34. NS went ex-dividend on August 5, 2011.
Vodafone Group PLC (NASDAQ:VOD): This telecom stock is included on Seeking Alpha’s list of “6 Stocks with Cheap Valuations And Strong Cash Flow”. It also appears on several other Seeking Alpha lists: “7 High Quality Dividend Stocks to Buy During the Next Correction”, “6 Telecom Dividend Kings With Growing Yields”, and Cramer’s recommended high-dividend stocks, mentioned above and found here.
VOD’s dividend yield is very attractive at 7.3. Its price to earnings ratio is $10.67, and earnings per share is $2.46. Its 52-week trading range is rather narrow at $24.23 to $29.75. Compared to its competitor Deutsche Telekom AG (OTCQX:DTEGY), VOD’s market capitalization at $135.65 billion is much larger than DTEGY.PK’s $53.85 billion. VOD’s quarterly revenue growth is 2.5, where DTEGY.PK posted a loss of 3.3. DTEGY.PK’ earnings per share of $.042 is much lower than VOD’s. VOD’s ex-dividend date was June 1, 2011.
Verizon (VZ): As headlines about the federal lawsuit against T’s acquisition of T-Mobile continue to take center stage, VZ lurks backstage with its 5.4 dividend yield and price to earnings ratio of $15.94. It, too, appears on the aforementioned list of Cramer’s of Cramer’s recommended high dividend stocks. VZ’s return on equity is 16.23.
According to this article, “fatter” paydays are on the way as the largest public companies in America up their dividends at the fastest pace in seven years, noting VZ’s announcement Thursday that, for the fifth year in a row, it will raise its dividend. VZ’s ex-dividend date was July 6, 2011.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.