In this article, we are going to talk about 15 very high yield dividend stocks. Click to skip ahead and jump to the 5 very high yield dividend stocks.
We have different views on investing. Some investors are focused on day trading wherein you buy and sell stocks on a single trading day. Others prefer to swing trade wherein investors are buying a stock and holding it for a few days to profit more from price changes. Then we have the dividend stock investors wherein aside from earning capital gains from established companies they invested in, they receive dividend payments regularly. On the other hand, growth investors pay more attention to companies that prefer to re-invest and grow their assets wherein they spend on an asset acquisition or the act of buying another company. You can check out our article on the 15 biggest companies that don’t pay dividends for a more comprehensive review.
Dividends are a fraction of the revenue that a company distributes to its shareholders. One of the best ways to take advantage of a dividend-paying company is to focus on the very high yield dividend stocks. Very high yield dividend stocks are generally unloved stocks that are going through rough times. However, it is important not to dismiss these companies worthless investments that are on the brink of doom. Companies that pay high dividends are sometimes high dividend stocks because they are unjustifiably punished by the markets due to temporary headwinds. Some of these companies may deliver large capital gains over the coming quarters and their dividend yields fall back to “normal” levels.
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Is this the best time to build a portfolio with very high dividend stocks? Yes, if you are looking for a steady stream of income not only for a retirement fund, investing in these dividend stocks might be a smart move if you pick the right stocks. Plus, you can take advantage of the Fed’s slashing interest rates to nearly zero until 2023. Although I’m not gonna lie, the coronavirus recession has caught up with dividend stocks, many of which have reduced or discontinued payments altogether. Main industries that were affected by COVID-19 lockdown protocols such as air travel and hotels have suspended their dividend payouts since the start of the pandemic, this includes Boeing (NYSE: BA) and Marriott International Inc (NASDAQ: MAR). Meanwhile, lucky for those who invested in consumer staples as some companies such as Costco (NASDAQ: COST), Johnson & Johnson (NYSE: JNJ), and Procter & Gamble Co (NYSE: PG) have increased their dividends. For income investors, you might want to consider these pandemic-proof dividend stocks that we have on this list.
The ability of a company to pay regular dividends makes a big difference in communicating its fundamental strength and sustainability to shareholders. The dividend yield measures how much income has been received relative to the share price; higher returns are more attractive, while lower returns can make the stock appear less competitive to its industry. This is the reason we relied on the dividend yield of each company that we have on the list. To give you a thorough review of the very high yield dividend stocks to include your portfolio, we also added the company’s revenue, market cap, and assets for each company. Let’s take a look at the very high yield dividend stocks ranked from lowest to highest dividend yield:
15. Chevron Corporation (NYSE: CVX)
Dividend Yield: 5.80%
Revenue: $140.1 billion
Market Cap: $166.37 billion
Assets: 237.4 billion
Headquarters: San Ramon, CA
Chevron is one of the largest energy companies in the world. The company offers an annualized dividend of $5.16 per share yielding 5.80%. In December 2020, Chevron lowered its long-term capital spending guidance to $14 billion to $16 billion annually by 2025 from $19 billion to $22 billion. Chevron is one of the best-loved dividend stocks of income investors in its long history of dividends and its ability to sustain dividends even in historic downturns. Also, the oil giant has increased dividends in the past 33 years. We like reliable energy companies a lot right now. All major oil companies cut their capital expenditures significantly and they aren’t planning to boost it until we are completely out of the pandemic induced economic slump. Oil prices have been going up and currently sit above their levels before the pandemic started. Yet, CVX’s stock price hasn’t kept up with the increase in oil prices. Chevron was trading above $110 before the pandemic started. We believe CVX shares will trade at $110 later this year and outperform the market. We don’t mind getting paid nearly 6% while waiting for the 20% upside in CVX shares materialize.
Diamond Hill Capital underscored few stocks, including Chevron Corporation, in an investor’s letter stating:
“Integrated oil and gas company Chevron Corp. shares meaningfully declined during the quarter as OPEC+ failed to reach a deal, allowing us to establish a position in this lower risk, more diversified company at a sufficient discount to our estimate of intrinsic value.”
