TAL International Group, Inc. (TAL), Annaly Capital Management, Inc. (NLY) – High Yield: Stocks or Bonds?

El Paso Pipeline Partners, L.P. (NYSE:EPB) is a natural gas pipeline master limited partnership and is a member of the Kinder Morgan family. The partnership operates its network of pipelines like a toll road for transporting natural gas. Its first distribution was recorded in January 2008 and every quarter since has been a higher payout.

National Grid plc (ADR) (NYSE:NGG) is an electric and natural gas utility operating in the U.K. and northeast U.S. In a recent update to its dividend policy, the company is targeting dividend growth rate equal to inflation. Dividends are paid twice a year and recent history has been high yields with some small ups and downs. My Foolish colleague Jim Royal holds National Grid plc (ADR) (NYSE:NGG) in his World’s Best Dividend Portfolio.

Finally, TAL International Group, Inc. (NYSE:TAL) leases shipping containers. The company’s dividend history shows a drop-off to a penny per share quarterly in 2009 and then back up and it’s been climbing nearly every quarter since.

Conclusion
This is a tough call, the bonds and stocks both offer yields well above treasuries, high-quality bonds, or broad stock market indexes. There are different risk profiles for stocks and bonds, but the amount of risk seems comparable. I have to give the edge to stocks. I’ve got a long investing horizon and the potential for dividend growth and capital appreciation from stocks outweighs the stable income of the bonds.

Of the investments profiled, TAL International Group, Inc. (NYSE:TAL) is the most interesting. It’s turned up in a few high-yield searches and recovering economies around the world should drive trade and demand for containers. I’ll be adding TAL International Group, Inc. (NYSE:TAL) to my scorecard with an outperform CAPScall.

The bonds and stocks profiled should be considered representative of high-yield investments available in the market and not outright buy recommendations. Rewards from high yields typically come with risks like missed payments or defaults, market fluctuation, and dividend cuts.

The article High Yield: Stocks or Bonds? originally appeared on Fool.com and is written by Russ Krull.

Russ Krull has no position in any stocks mentioned. The Motley Fool recommends El Paso Pipeline Partners and National Grid (ADR).

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