Top 10 Net Payout Yield Stocks For July

by: Stone Fox Capital

Not too surprisingly, the top net payout yield stocks from June (see article) remained mostly intact as the month ended. Only Motorola Solutions, Inc. (NYSE:MSI) was confirmed as a new addition to the list. Both Ameriprise Financial, Inc. (NYSE:AMP) and Time Warner Inc. (NYSE:TWX) tied for tenth on the July list with a 15.37% yield. So technically, no stock rolled off the list.

The Covestor model typically holds over 20 stocks so neither stock would need to be sold, but anybody playing at home with ten stocks could just leave the model alone in order to avoid trading costs. Look to add Motorola Solutions to the model as one of those stocks lowers the yield via more stock gains or the reduction of a buyback.

For those not familiar with net payout yields, it is the combination of the dividend yield and the net buyback yield. In essence, it is the percentage paid to investors. A typical fund focuses on dividends while some focus on buybacks, but recent history has shown that the stocks paying the largest combined yield have the best performance.

July List

The list is generally consistent from June with Goldman Sachs Group Inc. (NYSE:GS), Kohl's Corporation (NYSE:KSS), and ConocoPhillips (NYSE:COP) remaining in the top three positions with yields remaining generally consistent. Limited Brands, Inc. (LTD) made the biggest jump into fourth place with the yield jumping 1.4%. Motorola Solutions jumped into fifth place with a yield over 18%.

Northrop Grumman Corporation (NYSE:NOC) dropped to sixth though the yield remained a high 18.16%. The remaining stocks of The Gap, Inc. (NYSE:GPS), DirecTV (NYSE:DTV), Amgen Inc. (NASDAQ:AMGN), and Time Warner all shifted around slightly. Naturally, the main shifts on the list happen in the months after quarterly reports as reported buybacks have the most dramatic impacts on yields either up or down. A company can quickly drop a buyback while dividend yield changes are more sporadic, but typically minor, in the overall yield impact.

Below is the list of the top Net Payout Yield stocks for July.

Top Ten Net Payout Yield Stocks For July

Company Buyback Yield (%) Dividend Yield (%) NPY (%)
Goldman Sachs 25.64 1.93 27.57
Kohls 21.35 2.82 24.17
ConocoPhillips 16.65 4.75 21.40
Limited Brands 16.97 2.36 19.33
Motorola Solutions 16.62 1.84 18.46
Northrop Grumman 14.71 3.45 18.16
Gap 16.28 1.83 18.11
DirecTV 17.62 0.00 17.62
Amgen 13.89 1.98 15.87
Time Warner 12.64 2.73 15.37


Motorola Solutions adds a tech component to the list, but otherwise remains as diverse as prior. The list naturally remains buyback focused, but the stocks provide very solid dividends for investors wanting that option.

The brilliance of this type of investing is the consistency in the investment options. Limited changes can happen on a monthly basis for a list of the top ten or even top twenty stocks, but when it does happen, the move can be a great signal that a stock has peaked, or conversely, a stock has suddenly become extremely cheap. Alert investors can take advantage of those signals.

Disclosure: I am long AMP, COP, DTV, GPS, GS, KSS, TWX.

Additional disclosure: Please consult your financial advisor before making any investment decisions.