PSX - 3 Stocks to Buy with Dividends Yielding More than 6%
For savvy income investors, the first question that comes to mind when they see a stock with a dividend north of 6% is -- what are the risks? At times, those risks don't justify the high yields, presenting attractive buying opportunities. Let's take a look at three energy stocks -- Enbridge (NYSE: ENB) , Phillips 66 (NYSE: PSX) , and Williams Companies (NYSE: WMB) -- that offer precisely such an opportunity.
When Wall Street sours on a sector, all the stocks in it can face the heat. That's what happened with Canadian midstream giant Enbridge.
Enbridge has raised its dividends consistently for 25 years, at an impressive average annual rate of 11%. Based on the mid-point of its distributable cash flow guidance range, it expects to pay out roughly 70% of its 2020 DCF as dividends. That's slightly higher than its target range of 65% or less, but in the current environment, it's as safe as it can get. Still, at the prices where the stock is trading as of this writing, that payout delivers a yield of 8%.
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3 Stocks to Buy with Dividends Yielding More than 6%