CNBC recently crunched the numbers and offered savvy investors a laundry list of stocks that give investors a higher yield than the overall market and the yield on the benchmark 10-year Treasury, thanks to their high and growing dividends and low credit risk.
CNBC said it used S&P Capital IQ to screen the stocks with a dividend yield above 2%, a Standard & Poor’s credit rating of “A” or higher and 10% or more annual dividend growth over the past five years.
“Simon Property Group, the largest shopping mall operator in the U.S., has the highest dividend yield on the list at 5.6% and a solid credit rating. Investors have piled into real estate stocks like Simon because of their higher dividends and steady cash flow. The S&P 500 real estate sector is the best-performing category this year, up nearly 30% since January,” CNBC said.
Here are the top 3 stocks on CNBC’s list:
Stock Dividend yield (%)
- SPG Simon Property Group, Inc. 5.62
- PRU Prudential Financial, Inc. 5.09
- STT State Street Corporation 4.19
CNBC isn't alone in offering dividend advice to investors.
Goldman chief U.S. equity strategist David Kostin recently urged investors to buy 10 high-dividend yielding stocks as rates continue to fall.
Kostin said high-dividend payers are trading at their cheapest levels in nearly 40 years relative to stocks with low yields, CNBC explained.
With the 10-year Treasury yield at just above 1.5% and the Fed likely to cut two more times this year, “investors should look for opportunities in dividend stocks,” Kostin said in a recent note.
- AT&T (T)
- Kohl's (KSS)
- Archer-Daniels-Midland (ADM)
- Valero Energy (VLO)
- Citizens Financial Group (CFG)
- AbbVie (ABBV)
- Eaton (ETN)
- Seagate Technology (STX)
- Simon Property Group (SPG)
- Evergy (EVRG)
The S&P 500 dividends rose by 9% in the first and second quarters this year, Goldman says.
AT&T, Kohl’s and data storage company Seagate Technology all sport a dividend yield of about 6%, Goldman notes.
To be sure, defensive equity strategies focused on high payouts and steady earnings have gained in popularity this year as investors flock to safety, worried the biggest stock market rally in decades is about to come crashing down, Reuters recently explained.
Investors have piled into defensive sectors, which generate higher dividends and have steady revenue streams, for the first time in two years, viewing them as the safest bet as global growth slows and trade tensions rise, data shows.
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