My 3 Favorite 10% or Higher-Yielding Stocks with Buy or Better Rating

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Nov 20, 2012
Stocks with very high yields could boost your dividend income onto the next level. Especially if you have only a few thousand dollars of investment budget it makes these to take a look at the highest yields at the market.

I know what I am talking about. In my first years of investing, I starred often at such stocks with unbelievable high yields. I talk about yields of over 10 percent. But the most of the results are not sustainable and databases are not well-kept. Especially in the case of lower capitalized stocks, the risk of a dividend cuts is very high.

Some of you ask me which stock to buy or which are the best 10 percent or higher yielding stocks to buy now. I made a little list of the highest yielding stocks, starting at 10 percent dividend yield. You won’t believe it but there are more than 100 companies with such a high yield. In order to reduce my results, I selected only those with a market capitalization of more than USD2 billion and a current buy or better recommendation. Eleven stocks remain. Five of the results come from the REIT industry.

Here are my favorite stocks:

Portugal Telecom (PT) has a market capitalization of $4.19 billion. The company employs 72,347 people, generates revenue of $7.874 billion and has a net income of $541.79 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.651 billion. The EBITDA margin is 33.67 percent (the operating margin is 12.10 percent and the net profit margin 6.88 percent).

Financial Analysis: The total debt represents 53.53 percent of the company’s assets and the total debt in relation to the equity amounts to 434.25 percent. Due to the financial situation, a return on equity of 9.39 percent was realized. Twelve trailing months earnings per share reached a value of $0.34. Last fiscal year, the company paid $1.67 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.74, the P/S ratio is 0.53 and the P/B ratio is finally 1.16. The dividend yield amounts to 17.47 percent and the beta ratio has a value of 0.83.

France Telecom (FTE) has a market capitalization of $27.63 billion. The company employs 170,338 people, generates revenue of $58.004 billion and has a net income of $4.904 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $18.934 billion. The EBITDA margin is 32.64 percent (the operating margin is 17.55 percent and the net profit margin 8.45 percent).

Financial Analysis: The total debt represents 43.35 percent of the company’s assets and the total debt in relation to the equity amounts to 151.06 percent. Due to the financial situation, a return on equity of 13.75 percent was realized. Twelve trailing months earnings per share reached a value of $1.73. Last fiscal year, the company paid $1.79 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 6.02, the P/S ratio is 0.47 and the P/B ratio is finally 0.78. The dividend yield amounts to 16.76 percent and the beta ratio has a value of 0.76.

Windstream (WIN) has a market capitalization of $4.92 billion. The company employs 14,638 people, generates revenue of $4.285 billion and has a net income of $172.40 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.679 billion. The EBITDA margin is 39.19 percent (the operating margin is 19.41 percent and the net profit margin 4.02 percent).

Financial Analysis: The total debt represents 63.58 percent of the company’s assets and the total debt in relation to the equity amounts to 610.80 percent. Due to the financial situation, a return on equity of 14.51 percent was realized. Twelve trailing months earnings per share reached a value of $0.23. Last fiscal year, the company paid $1.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 36.11, the P/S ratio is 1.13 and the P/B ratio is finally 3.24. The dividend yield amounts to 12.09 percent and the beta ratio has a value of 0.90.

Take a closer look at the full table of the best recommended stocks with very high yields. The average P/E ratio amounts to 12.59 and forward P/E ratio is 10.81. The dividend yield has a value of 13.80 percent. Price to book ratio is 2.70 and price to sales ratio 3.98. The operating margin amounts to 38.46 percent. The average stock has a debt to equity ratio of 6.25. The high value is reasonable to Pitney Bowes. The company has a ratio of 29.53. Excluded by the one-off, the ratio is at 3.92.

Related stock ticker symbols:

PT, FTE, AGNC, ARR, CYS, PBI, IVR, HTS, WIN, MFA, PWE

Selected Articles:

· These 14 Stocks With Very High Yields (Over 10%) Are Close To 52-Week Highs

· 12 Stocks With Very High Yields (10+ Percent) And Additional Growth Potential

· 17 Higher Capitalized Stocks With Really Huge Dividend Yields (Over 10%)

· 10% Yielding Dividend Stocks With Strongest Expected Earnings Growth