The Best Stocks With a Dividend Yield of At Least 4%

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Feb 11, 2015

Volatility is the basic character of a stock market. A good stock is that which satisfies its investors irrespective of the nature of the market. Consistent payment of dividends is one of the key factors to ascertain if a particular stock is investor-friendly or not. Currently, lots of external factors like low GDP growth of the economy, high inflation rates, currency rate fluctuations etc. have resulted in many companies bringing down their payouts to a great extent. Amidst all this, there are still a few companies that have paying out consistently high rate of dividends to their investors and adding more and more value to their worth. All the companies discussed below have a high dividend yield of 4.1%.

1000+ properties and counting

One of the best stocks among those that have a dividend yield of more than 4% is Health Care Real Estate Investment Trust (HCN, Financial). Being a REIT, it is bound to pay out 90% of its earnings as dividends as per laws. However, in addition to this, there are lots of other things that the company does, to add value to its investors. Currently the Health Care REIT owns close to 1,250 properties spread across countries like United Kingdom and Canada and over 46 states in the USA. Its properties included mostly senior living communities, assisted living communities and many more. The company’s earnings have grown by four times in 2014 ever since 2010 and the free cash flow of Health Care REIT is in a comfortable position today. From 2008, the trust has been witnessing a whopping 28% growth every year, on an average basis.

Some clever acquisitions like Sunrise Senior Living (for a deal worth $4.8 billion) and Genesis (for a deal worth $2.4 billion) have put Health Care REIT in a strong position today. Most of the earnings of Health Care REIT come in the form of rent payments. During 2012, the trust booked a place for itself in the top 5% category for tenant satisfaction. More recently, for September 2014, Health Care REIT enjoyed the highest occupancy rate, which means the company is able to retain its old tenants than searching for newer ones. For the past 20 years, the company has an impressive average growth of 15% and dividend increases have been going on for the 175th quarter in a row. The stock movement of Health care REIT is shown in the chart below:

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Massive networking is the key

While talking about stocks that have a dividend yield of more than 4%, Arcos Dorados (ARCO, Financial) comes second in the list. This is the biggest franchisee of the fast food giant, McDonald’s (MCD, Financial). It operates out of Latin America and has around 2000 stores here that employs close to 95,000 people. It was impacted hugely by the rising inflation problems in countries like Venezuela (60%) and Argentina (20%); however the re-launch of operations in Cuba combatted the losses suffered in these two countries. Currently the prices are trading at a discount, but they are expected to go up this year as the economy is all set to see a development. During Q3 2014, when external favours Arcos Dorados, the company had posted an impressive 9.7% growth and this trend is likely to continue into the future as well. The share price trend is seen here in the chart below. This trend is all set to change for 2015 as the price will go through an upward surge this year, thanks to economic development. Stock movement for the last few months is show below:

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Conclusion

These two stocks have been pleasing investors in the form of high dividend payouts. At present they are wading through rough waters because of unfavourable economic conditions. The situation is above to change this year as these stocks will start looking up at the backdrop of improved economy and more scope for growth and expansion.