Eight High-Yield Stocks With Capital Gains Potential

Morningstar offers a premium stock screening tool which allows users to filter specific results. I recently ran a screener looking for higher yielding stocks that are well liked for current undervaluation and offered above average historic dividend growth.The screen criteria:

·       US Domestic Company

·       Morningstar Rating of 4 or 5 Stars (their highest)

·       Current Yield Over 4.0%

·       5-yr Dividend Growth over 7%

It is not surprising 7 out of the 8 stocks are either energy or financial asset managers.These are the two most beaten down segments of their respective out-of-favor industrial sectors.Five out of the eight are master limited partnerships.

An undervalued stock offering greater than a 4% current yield with a history of raising annual distributions by almost 3 times the inflation rate should be of interest to investors on many fronts.These eight stocks should be on your research list or in your portfolio. 

Keep these names on your radar screen with their respective discounts to Fair Valuation:

Stock                                                  Discount

HollyFrontier Corp (HFC)                    46%

Magellan Midstream LP (MMP)           13%

Spectra Energy LP (SEP)                    17%

Sunoco Logistics LP (SXL)                  16%

KKR & Co LP (KKR)                             24%

Blackstone Group LP (BX)                   36%

Waddell & Reed Financial (WDR)        26%

The Mosaic Co. (MOS)                         26%

Disclosure: Long DM, D

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