5 High-Yield Dividend Stocks for Steady Income Stream in 2021
As the curtains gradually roll down in an eventful year, the world is eagerly awaiting a new beginning. The year 2020 can rightly be called an annus horribilis as the global economy suffers one of the worst hits due to the coronavirus pandemic. It has seen the loss of countless lives and businesses to the virus. Strict lockdown restrictions have practically paralyzed business operations and brought various economies to a standstill.
As the corporate sector looks for cash to mitigate the liquidity crisis through vacation, layoffs, and cost-cutting measures that stem from reductions in discretionary costs, various companies are looking beyond other short-term funding options, such as: B. Revolving Bank Credit Lines. to bridge temporary liquidity bottlenecks. One of the most common and widespread trends in improving liquidity during the recession is to cut dividends or suspend dividend payments until the overall situation improves. While much of the companies in various sectors have increasingly followed the trend, a handful have chosen to swim against the tide and continue to reward shareholders with healthy dividend yields.
Using the Zacks Stock Screener, we've selected Zacks Rank # 1 (Strong Buy) or # 2 (Buy) stocks with a dividend yield greater than 5%. These stocks have a market capital of more than $ 100 million and an average dividend yield of more than 5% for 5 years. To narrow the list down, we've taken those stocks that have a VGM rating of A or B. Additionally, these stocks have solid Zacks industry rankings and are in the top 50% of more than 250 Zacks industries. Our research shows that the top 50% of Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.
In addition to the intrinsic value proposition of these stocks, a healthy dividend yield will satisfy the appetite of risk averse investors. The fact that these stocks have the potential to outperform the market while delivering a decent dividend yield historically has made them valuable assets. Let's take a comprehensive look at five such stocks for a steady stream of income in 2021.
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Top 5 picks
AGNC Investment Corp. AGNC: This Real Estate Investment Trust (REIT) focuses on leveraged investments in Agency MBS (mortgage-backed securities), including pass-through securities for residential mortgages and secured mortgage obligations. The Federal Reserve's continued purchases to bolster the agency's MBS market to provide liquidity in the mortgage sector have stabilized the broader mortgage market and improved the outlook for the agency's MBS. The robust demand for high quality collateral like Agency MBS has also resulted in a significant re-evaluation of the repo market. The company looks like a solid pick with a VGM rating of B, Zacks Industry Rank # 105 (top 41%) and a dividend yield of 9.3%. AGNC Investment is ranked a Zacks 2. For the full list of today's Zacks # 1 Rank stocks, please click here.
DCP Midstream Partners, LP DCP: Headquartered in Denver, CO, DCP owns and operates a portfolio of midstream power plants. The company was able to beat the COVID-19 blues through targeted attempts to relieve the balance sheet through prudent cost and capital management initiatives. In addition, the consolidation in the midstream sector through opportunistic merger and acquisition strategies has enabled the consolidation of its market position. The company looks like a tempting pick with a VGM rating of B, Zacks Industry Rank # 70 (top 27%), and a dividend yield of 8.2%. DCP has a Zacks rank 1.
Canadian Imperial Bank of Commerce CM: Headquartered in Toronto, Canada, this leading financial institution offers a full range of products and services through its extensive e-banking network, branches and offices in Canada, the United States and around the world. With a relatively heavy weight in the domestic retail mortgage sector, the company appears better positioned than its peers. The careful execution of operational plans and conservative balance sheet management remain additional tailwind. The company looks like a solid pick with a VGM rating of B, Zacks Industry Rank # 102 (top 40%), and a dividend yield of 5.1%. The Canadian Imperial Bank has a Zacks rank 2.
China Petroleum & Chemical Corporation SNP: Headquartered in Beijing, China, the company is one of the largest petroleum and petrochemical companies in Asia. The company is the second largest producer of crude oil and natural gas and the largest refiner and marketer of refined petroleum products in China. The company is also the largest manufacturer and distributor of petrochemicals in the nation. China's economy is recovering faster than the rest of the world and is reportedly the only country to have survived the recession caused by the coronavirus. China Petroleum & Chemical Corporation, with attractive and economically viable oil and natural gas reserves and a strong balance sheet, is relatively better positioned than its competitors to benefit from them. This company looks like a tempting choice with a VGM rating of A, Zacks Industry Rank # 43 (top 17%), and a dividend yield of 7.4%. It has a rank 1 zack.
Vodafone Group Plc VOD: Vodafone is headquartered in Newbury, United Kingdom and provides telecommunications services in Europe and internationally. The company is benefiting from huge investments in upgrading its existing network to meet the surge in demand. Vodafone is seeing healthy growth in subscribers and revenues, particularly in emerging countries such as Egypt, Turkey and North Africa. Improving quality metrics in the domestic market and cost management also support the company. The stock appears to be a solid choice with a VGM value of A, Zacks Industry Rank # 118 (top 46%) and a dividend yield of 6.1%. Vodafone has a Zacks rank 2.
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