5 Top Stocks With Dividend Yields Over 5%

The Federal Reserve tried to calm the global stock market by announcing a 50-basis point cut in rates, to a target rate of 1% to 1.25%. It was the Fed’s first emergency rate cut since the financial crisis in 2008.

The 10-year treasury was already at the target rate level, as it had closed the session before around 1.16%.

Looking for Income

And while the Fed’s cut meant that home mortgage rates were moving lower, a boon to those with a mortgage, any savers who had cash in their savings account were going to feel the pain.

As a result, many investors may want to be on the lookout for other ways to get a higher yield.

One of them is through buying stocks and REITs.

Screening for High Yield Stocks

There are several screens you can run to search for yield. 5% or higher would give a juicy yield but why not try for 10%?

A 10% yield, however, could indicate a company under distress of some sort OR it could mean it was a REIT, which is required to pay out 80% of its income to shareholders.

To find top stocks, a screen should include the Zacks Ranks of #1 (Strong Buy) and #2 (Buy), both which should mean the company has rising earnings estimates.

If you’re worried about the balance sheet, you can also look for companies with a low debt to equity ratio.

5 Top Stocks with High Yields

1.       Annaly Capital Management (NLY - Free Report) is a mortgage REIT. It has pulled back from recent highs during the correction and has a forward P/E of just 8.9. Annaly has a debt to equity ratio of just 0.4. It pays a dividend, currently yielding 11.3%.

2.       Park Hotels & Resorts (PK - Free Report) is a REIT that owns iconic hotels and resorts worldwide is dirt cheap, with a forward P/E of 6.9. Because of the coronavirus impact on travel, however, shares have fallen over 15% in the last month. Does its dividend make up for the weakness in the shares?

3.       Macy’s (M - Free Report) is currently a Zacks Rank #1 (Strong Buy). One analyst raised their estimate for this fiscal year in the last week. Earnings are still expected to decline 14.4% year-over-year. Shares are trading at new 52-week lows. Is the dividend worth it?

4.       Sunoco (SUN - Free Report) operated 7300 gasoline stations around the country. Earnings are expected to rise 11.7% in 2020 and 8.5% in 2021. It has a forward P/E of just 9. You won’t believe the dividend yield either.

5.       Seagate Technology (STX - Free Report) is one of the few technology companies that pays a juicy dividend. The hard drive maker has fallen over 14% in the last month, pushing its dividend yield up to 5.4%. But what about the earnings and sales growth?

What else should investors know about finding stocks with high dividend yields?

Listen to this week’s podcast to find out.