TMUS - 10 High-Yield Dividend Stocks To Help You Generate Income

Summary

• In this article, I will present 10 companies that could help you generate an additional income.
• All the picks that I present in this article provide you with an attractive Dividend Yield.
• The 10 selected companies reach an Average Dividend Yield [TTM] of 5.57%.

Investment Thesis

The aim of today’s article is to provide you with companies that have an attractive Dividend Yield. By investing in high yield dividend income stocks, you are able to generate a significant additional income. The result of which is that you can use this dividend income to cover your expenses or, alternatively, you can reinvest the dividend you receive from these companies.

At the same time, and while having a long investment-horizon, you can achieve a high Yield on Cost. All of this means that you don’t need to sell stocks in order to generate an additional income, it also implies that the constant price fluctuations on the stock market will be less important to you.

Here are 10 companies that can provide you with an attractive Dividend Yield:

1. AT&T (NYSE: T )
2. BASF (BASFY)
3. Imperial Brands (IMBBY)
4. JPMorgan (NYSE: JPM )
5. Medical Properties Trust (NYSE: MPW )
6. Altria (NYSE: MO )
7. Simon Property Group (NYSE: SPG )
8. Swiss Re AG (SSREY)
9. TotalEnergies (NYSE: TTE )
10. Royal Bank of Canada (NYSE: RY )

AT&T

AT&T is a company that you cannot expect large capital gains from within a short period of time. However, I consider AT&T to be an attractive pick when searching for companies to raise the Average Dividend Yield of your investment portfolio.

At AT&T’s current stock price of $19.44, the company pays a Dividend Yield [FWD] of 5.71%. I expect it to raise its Dividend between 1%-2% in the years ahead. Moreover, due to the company’s currently relatively low Payout Ratio of 40.96%, I do not expect a dividend cut in the near future.

The company’s P/E [FWD] Ratio of 8.34 indicates that its Valuation is currently attractive. AT&T’s P/E [FWD] Ratio is 51.53% below the Sector Median (which is 17.39). The company’s P/E [FWD] Ratio is similar to the one of Verizon (NYSE: VZ ) (P/E [FWD] Ratio of 8.70) and significantly lower than its competitor T-Mobile (NASDAQ: TMUS ) (21.64). In addition to that, AT&T’s P/E [FWD] Ratio is also significantly lower than smaller companies from the Integrated Telecommunication Services Industry such as BCE (NYSE: BCE ) (18.81) or Telstra Group Limited (TLGPY) (24.20).

According to the Seeking Alpha Author Rating, AT&T is currently rated as a buy: four Seeking Alpha Authors rate the company as a strong buy, 11 as a buy, seven as a hold and only one as a sell.

BASF

BASF is a worldwide operating chemical company headquartered in Germany. The company was founded in 1865 and disposes of 111,768 employees. It pays a Dividend Yield [FWD] of 6.41%, which stands 235.62% above the Sector Median (2.00%). Its current Free Cash Flow Yield [TTM] of 4.92% strengthens my confidence that the company is attractive in terms of risk and reward and therefore an excellent pick for this selection of dividend income stocks.

At this moment, I consider BASF to be undervalued: its P/E Non-GAAP [FWD] Ratio of 9.71% stands 29.17% below the Sector Median of 13.71. At the same time, its P/E [FWD] Ratio lies 36.49% below its P/E [FWD] Ratio over the past 5 years (which is 15.92). The company’s Price / Sales [FWD] Ratio of 0.54 is 55.57% below the Sector Median of 1.22, further indicating that it is currently undervalued.

By taking a look at the Seeking Alpha Factor Grades, we get further evidence that the company is an attractive pick at this moment in time: BASF is rated with an A+ for Revisions and an A for Profitability. For Valuation, it gets an A- rating while it receives a B for Momentum.

Imperial Brands

At this moment in time, Imperial Brands provides its shareholders with a Dividend Yield [FWD] of 9.47%. This Dividend Yield [FWD] stands 254.77% above the Sector Median, which is 2.67%.

The company’s Free Cash Flow Yield [TTM] of 14.22% is 273.67% above the Sector Median of 3.81%, thus providing us with further evidence that it is an attractive pick at this moment in time.

Imperial Brands currently has a P/E [TTM] Ratio of 13.34, which is 38.09% below the Sector Median, demonstrating that the company is undervalued when compared to its peer group. The same is confirmed when considering the company’s Price / Cash Flow [TTM] Ratio of 6.33, which lies 60.43% below the Sector Median (16.00).

The Seeking Alpha Factor Grades further confirm that Imperial Brands is currently an attractive pick: the company is rated with an A+ in terms of Valuation, with an A for Profitability and an A- for Momentum. Only in terms of Growth, is the company rated with a D+.

JPMorgan

JPMorgan’s strong competitive position within the Banking Industry is underlined by its enormous Profitability: the U.S. bank has a Net Income Margin [TTM] of 30.80%, which is 12.19% above the Sector Median (27.46%). Furthermore, its Return on Equity of 13.69% lies 22.31% above the Sector Median (11.20%). Both metrics confirm JPMorgan’s strong Profitability.

In addition to that, the U.S. bank currently pays shareholders a Dividend Yield [FWD] of 2.81%. At first glance, this is not particularly high, but when considering its Average Dividend Growth Rate of 13.54% over the last 5 years, it can be highlighted that this implies a very attractive mix between Dividend Yield and Dividend Growth. For this reason, the company still makes it as part of this list of relatively high yield dividend income stocks.

Below you can find a projection of JPMorgan's Yield on Cost when assuming an Average Dividend Growth Rate of 8% for the company.

The U.S. bank currently has a P/E [FWD] Ratio of 11.06, which is 11.07% below its Average P/E [FWD] Ratio over the past 5 years (12.43), indicating that it is at least fairly valued at this moment in time.

In addition to that, I see JPMorgan being absolutely on track when it comes to Growth: its Revenue Growth Rate [CAGR] over the past 5 years is 5.24%, which is superior to the one of competitors such as Bank of America (NYSE: BAC ) (5 Year Revenue Growth Rate [CAGR] of 1.99%), Wells Fargo (NYSE: WFC ) (-3.42%), HSBC (NYSE: HSBC ) (-0.14%) or Citigroup (NYSE: C ) (1.57%).

Medical Properties Trust

Medical Properties Trust currently pays its shareholders a Dividend Yield [FWD] of 8.95%, making it an attractive pick to be part of this selection.

Medical Properties Trust’s Dividend Growth Rate 5Y [CAGR] of 3.86% demonstrates that it is not only an attractive choice for those investors that seek dividend income, but also those looking for dividend growth. Its Dividend Growth Rate lies 143.86% above the Sector Median (which is 1.58%).

I have used the P / FFO [FWD] Ratio in order to determine if the company is currently undervalued: Medical Properties Trust’s P / FFO [FWD] Ratio of 6.75 is 52.75% below the Sector Median (which is 14.28), strongly indicating that the company is undervalued at this moment.

Moreover, the company’s Revenue Growth Rate [CAGR] over the past 5 Years of 19.76% is significantly higher than the one of competitors such as Healthcare Realty Trust (NYSE: HR ) (11.57%), Omega Healthcare Investors (NYSE: OHI ) (-3.65%) or Physicians Realty Trust (NYSE: DOC ) (9.89%).

The Seeking Alpha Factor Grades confirm that Medical Properties Trust is an attractive pick: the company receives an A+ rating for Profitability, an A for Valuation, a B for Growth and a B- for Revisions. Only for Momentum does it receive a D+ rating.

Altria

When looking for a company that can provide you with an attractive Dividend Yield, Altria is among my top choices. There are a number of reasons for this: the company currently has an attractive Dividend Yield [FWD] of 7.82%, which lies 192.95% above the Sector Median (2.67%).

Altria’s EBIT Margin [TTM] of 58.82% is significantly higher than that of its competitors such as Philip Morris International (NYSE: PM ) (EBIT Margin [TTM] of 39.03%), British American Tobacco (NYSE: BTI ) (42.17%) or Japan Tobacco ([[JAPAY]], [[JAPAF]]) (24.29%).

The company has shown 53 Consecutive Years of Dividend Payments and Dividend Growth, which confirms that it’s an attractive pick for investors seeking dividend income and dividend growth at the same time.

Moreover, the company is currently attractive in terms of Valuation: proof of this is its P/E [FWD] Ratio of 9.50, which is 53.40% below the Sector Median (20.39).

Simon Property Group

Simon Property Group’s current Dividend Yield [FWD] of 5.82% is higher than the Dividend Yield [FWD] of the Sector Median (4.58%), which offers evidence that Simon Property Group is an excellent fit for this selection of high dividend yield stocks.

Moreover, the company’s Dividend Yield [FWD] of 5.82% is higher than companies such as Realty Income (NYSE: O ) (Dividend Yield [FWD] of 4.62%), Kimco Realty Corporation (NYSE: KIM ) (4.35%), Regency Centers Corporation (NASDAQ: REG ) (4.04%), Federal Realty Investment Trust (NYSE: FRT ) (3.96%) or National Retail Properties (NYSE: NNN ) (4.69%).

The company’s P / FFO [FWD] Ratio of 10.08 is significantly below the Sector Median (14.28), indicating that it is undervalued at this moment of writing.

According to the Wall Street Ratings, the company is currently a buy: 6 analysts rate it as a strong buy while 3 analysts give a buy rating.

Swiss Re

The reinsurance company based in Switzerland currently has a market capitalization of $30.51B and 14,836 employees on its books. It currently pays shareholders a Dividend Yield [FWD] of 5.94%, which is significantly above the Dividend Yield [FWD] of competitors such as Hannover Rück ([[HVRRF]], [[HVRRY]]) (Dividend Yield [FWD] of 3.11%), Münchener Rück (MURGY) (3.28%) or Reinsurance Group of America (NYSE: RGA ) (2.15%).

Swiss Re’s Average EBIT Growth Rate [FWD] over the past 5 years is 35.76%, further indicating that its growth perspective is intact.

Both The Seeking Alpha Factor Grades as well as the Seeking Alpha Quant Ranking suggest that Swiss Re is an attractive pick for investors at this moment of writing.

According to the Seeking Alpha Factor Grades, Swiss Re is rated with an A for Valuation, Growth, Profitability and Momentum. For Revisions, it gets a B rating.

According to the Seeking Alpha Quant Ranking, the company is ranked 2 ^nd out of 7 within the Reinsurance Industry and 59 ^th out of 666 within the Financials Sector. In the overall ranking, the company is 308 ^th out of 4758, thus strengthening my belief that it’s an attractive pick for investors.

TotalEnergies

At the time of writing, TotalEnergies pays its shareholders a Dividend Yield [FWD] of 4.76%, which is 41.10% higher than the Sector Median: the Dividend Yield [FWD] of the Sector Median is 3.38%.

The company’s Dividend Yield [FWD] is higher than the one of competitors such as Exxon Mobil (NYSE: XOM ) (Dividend Yield [FWD] of 3.27%), Chevron (NYSE: CVX ) (3.71%), Occidental Petroleum’s (NYSE: OXY ) (0.86%), Shell (NYSE: SHEL ) (3.79%) or BP (NYSE: BP ) (3.96%). This confirms, once again, that TotalEnergies’ Dividend Yield [FWD] is currently attractive when compared to its peer group.

Furthermore, TotalEnergies currently disposes of an attractive Valuation: the company’s P/E [FWD] Ratio is 5.42, standing 34.97% below the Sector Median. Its Price / Sales [FWD] Ratio is 0.74, which is 44.85% below the Sector Median (1.34). Moreover, TotalEnergies Price / Book [TTM] Ratio of 1.39 is 19.79% below the Sector Median (1.74), indicating, one more time, that the company’s current Valuation is attractive for investors.

The Seeking Alpha Author Rating confirms that TotalEnergies is currently a buy: 5 Authors rate the company as a buy, while it receives a hold rating from just one Author.

Royal Bank of Canada

The Royal Bank of Canada currently provides its shareholders with an attractive Dividend Yield [FWD] of 3.82%. At the same time, the Canadian bank has shown an attractive Dividend Growth Rate 10Y [CAGR] of 5.14%. The combination of both an attractive Dividend Yield and Dividend Growth Rate make it an attractive pick for investors aiming to invest with a long investment-horizon. The bank’s Dividend Safety is underlined by 21 Consecutive Years of Dividend Payments .

Furthermore, its Profitability is underlined by a Net Income Margin of 32.56%, which lies 18.60% above the Sector Median (27.46%). The bank has a Return on Equity of 16.13%, which is 44.10% above the Sector Median (11.20%).

The Seeking Alpha Dividend Grades underline that the Royal Bank of Canada is an appealing pick for both dividend income and dividend growth investors. The Canadian bank is rated with a B+ for Dividend Yield and Dividend Consistency, while it gets a B for both Dividend Safety and Dividend Growth.

Overview of the 10 selected companies

Source: Seeking Alpha

Conclusion

All of the stocks in this selection provide you with an attractive Dividend Yield. From my point of view, aiming for an attractive Dividend Yield when investing is important. This is because you become more independent from the strong price fluctuations of the stock market while generating an additional income for yourself in the form of dividends.

The Average Dividend Yield [TTM] of the selected companies that I have presented in this article is 5.57%, which implies that you could generate a significant amount of extra income in the form of dividends.

Even though this article has focused on companies that provide you with a high Dividend Yield when building an investment portfolio, I would not only select companies that provide you with a high Dividend Yield. The reason being that the companies that already offer you a high Dividend Yield today, often provide you with relatively little Dividend Growth. The Average Dividend Growth Rate over the past 5 years of the selected picks from this article, for example, is only 2.39%. Therefore, when building an investment portfolio, I would also recommend adding companies that show a high Dividend Growth Rate.

In my opinion, a successful investment portfolio built with a long investment-horizon should consist of a mixture between companies that provide you with a relatively high Dividend Yield and others that give a relatively high Dividend Growth.

By having a mix between high Dividend Yield and high Dividend Growth companies in your portfolio, you can not only achieve an attractive Average Dividend Yield today, but also raise the Average Dividend Yield at a high growth rate in order to achieve a high Yield on Cost in the future.

Author’s Note: Thank you for reading! I would love to hear your opinion on this selection of high dividend yield stocks. Do you own any of these stocks? Which are your favorite high dividend yield stocks?

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