In this article, we discuss 12 highest yielding dividend stocks you can buy right now. You can skip our detailed analysis of high-dividend stocks and their previous performance, and go directly to read 5 Highest Yielding Dividend Stocks You Can Buy Right Now.
Financial experts have often warned investors about falling for yield traps as they are often a sign of financial trouble. However, some reports have shown that high-yield dividend stocks have shown strong performance over the years. In our article titled 12 Very High Yield Dividend Stocks With Upside Potential, we referred to data by Newton Investment Management (NIM) and highlighted that high-dividend stocks have outperformed the market during periods of high inflation from 1940 to 2021. The NIM report also mentioned that stocks with higher dividend yields tend to generate higher returns in the future. These results were based on the US market data from July 1928 to June 2019. The research showed that portfolios comprised of high-dividend yield stocks outperformed those with low or zero dividend yields on a value-weighted basis. Specifically, they outperformed low-yield portfolios by 199 basis points (bps) and zero-yield portfolios by 330 bps.
That said, the notion that high dividend yields are not always practical also holds validity. Analysts recommend dividend yields between 3% to 6% as this range often has the potential for both dividend growth and capital appreciation. We reported Nuveen’s data in one of our articles, which revealed that global dividend companies with moderate yields between 0% and 3% usually show better potential for growing earnings, stronger profitability, and higher profit margins, compared to those that have dividend yields above 3% and those that don’t pay dividends at all. These factors also help lower risks, especially when the market is volatile.
Though high-yield dividend stocks have shown better results than the market and non-dividend stocks, these stocks have fallen behind companies that have raised their payouts consistently. This shows that dividend growth is one of the most important metrics to consider when investing in dividend stocks. According to a report by ProShares, the Dividend Aristocrats Index, which tracks the performance of companies that have raised their payouts for at least 25 consecutive years, has shown stronger performance irrespective of interest rate fluctuations. The report mentioned that the index delivered an 11.55% return to shareholders in rising interest rate periods from May 2005 to December 2023, compared with a 10.46% return of high-yield dividend stocks, which was represented by the Dow Jones U.S. Select Dividend Index. Overall, dividend growers returned 12% during this period, outperforming high-yield dividend stocks, which yielded a return of 9.27%.
One other approach to navigating the changing market conditions with high-yield dividend stocks is to combine them with dividend growth strategies. Altria Group, Inc. (NYSE:MO), Verizon Communications Inc. (NYSE:VZ), and British American Tobacco p.l.c. (NYSE:BTI) are some examples of companies that have raised their dividends for years and also offer above-average yields. These stocks have also shown impressive performance in the past. To know more about the solid returns of high-yield dividend stocks, read our article, 13 High-Dividend Stocks to Invest In Under $10. In this article, we will take a look at some of the best dividend stocks with the highest yields.
Photo by nathan dumlao on Unsplash
Our Methodology:
For this list, we used a stock screener and selected dividend stocks with yields ranging from 10% to 16%, as of April 15. Among those stocks, we chose companies that have relatively stable dividend histories, however, a lot of the companies on the list don’t have a consistent record of paying dividends due to their exceptionally high yields. They either stopped or reduced their dividend payments in 2020 due to the pandemic or because they were facing financial difficulties. The stocks are ranked in ascending order of their dividend yields, as recorded on April 15. We also mentioned hedge fund sentiment data for these stocks using Insider Monkey’s database of 933 hedge funds as of Q4 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
12. British American Tobacco p.l.c. (NYSE:BTI)
Dividend Yield as of April 15: 10.28%
British American Tobacco p.l.c. (NYSE:BTI) is a multinational tobacco company that specializes in the production of other nicotine products as well. The company’s cash position remained strong in the fourth quarter of 2023 as it returned £5.05 billion to shareholders through dividends. On February 13, the company declared a quarterly dividend of $0.7431 per share, having raised it by 6.1%. With a dividend yield of 10.28% as of April 15, BTI is one of the best dividend stocks on our list.
The number of hedge funds owning stakes in British American Tobacco p.l.c. (NYSE:BTI) grew to 22 in Q4 2023, from 17 in the previous quarter, as per Insider Monkey’s database. The overall value of these stakes is nearly $400 million.
11. Leggett & Platt, Incorporated (NYSE:LEG)
Dividend Yield as of April 15: 10.45%
Leggett & Platt, Incorporated (NYSE:LEG) is a Missouri-based diversified manufacturing company that produces a wide range of products for vehicles, homes, and offices. The company announced a quarterly dividend of $0.46 on February 27, which was in line with its previous dividend. However, it has been rewarding shareholders with growing dividends for the past 52 years, which makes LEG one of the best dividend stocks with high yields. The stock has a dividend yield of 10.45%, as of April 15.
At the end of Q4 2023, 24 hedge funds tracked by Insider Monkey held stakes in Leggett & Platt, Incorporated (NYSE:LEG), up from 19 in the previous quarter. The collective value of these stakes is over $123.6 million. With over 1 million shares, Millennium Management was the company’s leading stakeholder in Q4.
10. Delek Logistics Partners, LP (NYSE:DKL)
Dividend Yield as of April 15: 11.04%
Delek Logistics Partners, LP (NYSE:DKL) is an American company that specializes in the transportation, marketing, and storage of crude oil and other refined petroleum products. On January 25, the company hiked its quarterly dividend by 1% to $1.055 per share. Through this increase, the company stretched its dividend growth streak to 50 consecutive quarters. The stock’s dividend yield on April 15 came in at 11.04%. It is among the best dividend stocks on our list with high yields.
As of the end of Q4 2023, Ken Griffin’s Citadel Investment Group was the only stakeholder of Delek Logistics Partners, LP (NYSE:DKL).
9. Barings BDC, Inc. (NYSE:BBDC)
Dividend Yield as of April 15: 11.40%
An American business development company, Barings BDC, Inc. (NYSE:BBDC) is next on our list of the best dividend stocks with high yields. The company currently offers a quarterly dividend of $0.26 per share for a dividend yield of 11.40%, as recorded on April 15. In its FY23 report, the company announced that it made about 20% more money than what it paid out in dividends. Moreover, it has been growing its dividends for the past five consecutive years.
Insider Monkey’s database of Q4 2023 indicated that 12 hedge funds held stakes in Barings BDC, Inc. (NYSE:BBDC), compared with 13 in the previous quarter. These stakes are worth nearly $35 million in total. Among these hedge funds, Callodine Capital Management was the company’s leading stakeholder in Q4.
8. Kennedy-Wilson Holdings, Inc. (NYSE:KW)
Dividend Yield as of April 15: 11.74%
Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a real estate investment company that invests in various types of related properties. On March 26, the company announced a quarterly dividend of $0.24 per share, which fell in line with its previous dividend. It has a 13-year run of paying regular dividends to shareholders, which makes KW one of the best dividend stocks on our list. The stock has a dividend yield of 11.74%, as of April 15.
As of the end of December 2023, 13 hedge funds had investments in Kennedy-Wilson Holdings, Inc. (NYSE:KW), up from 11 in the previous quarter, as per Insider Monkey’s database. The consolidated value of these stakes is over $353 million.
7. Nordic American Tankers Limited (NYSE:NAT)
Dividend Yield as of April 15: 12.01%
Nordic American Tankers Limited (NYSE:NAT) is a Bermuda-based shipping company that specializes in the transportation of crude oil through its fleet. The company has never missed a dividend in the past 28 years, which makes NAT one of the best dividend stocks on our list. In February this year, the company declared a quarterly dividend of $0.12 per share, which showed a 100% increase from its previous dividend. As of April 15, the company has a dividend yield of 12.01%.
According to Insider Monkey’s database of Q4 2023, 16 hedge funds held stakes in Nordic American Tankers Limited (NYSE:NAT), up from 15 in the previous quarter. These stakes are collectively valued at nearly $46 million. With over 3.3 million shares, Two Sigma Advisors was the company’s leading stakeholder in Q4.
6. Natural Health Trends Corp. (NASDAQ:NHTC)
Dividend Yield as of April 15: 12.05%
Natural Health Trends Corp. (NASDAQ:NHTC) is an American direct-selling e-commerce company that deals in health and wellness products and services. The company’s quarterly dividend comes in at $0.20 per share for a dividend yield of 12.05%, as of April 15. In FY23, it returned over $9.2 million to shareholders through dividends. NHTC ranks sixth on our list of the best dividend stocks with high yields. It can be added to dividend portfolios alongside some popular stocks, such as Altria Group, Inc. (NYSE:MO), Verizon Communications Inc. (NYSE:VZ), and British American Tobacco p.l.c. (NYSE:BTI).
With a collective stake value of over $4 million, 2 hedge funds tracked by Insider Monkey held positions in Natural Health Trends Corp. (NASDAQ:NHTC) in Q4 2023, which remained unchanged from the previous quarter.
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Disclosure. None. 12 Highest Yielding Dividend Stocks You Can Buy Right Now is originally published on Insider Monkey.