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Even though interest rates are rising rapidly, the average dividend yield in the S&P 500 Index remains low at around 1.7%. As a result, income investors should focus on higher-yielding securities if they want additional income from their stock portfolios.

The good news is, investors do not have to sacrifice quality when buying higher-yielding stocks. For investors who want even more income, here are 3 high dividend stocks with yields above 5%.

New York Community Bancorp (NYCB)

New York Community Bancorp is the parent of a state-chartered bank called New York Community Bank. The wholly owned subsidiary operates 236 branches in New York, New Jersey, Ohio, Florida, and Arizona.

The bank focuses on multi-family loans in New York City, particularly in buildings that are rent controlled. That book of business is about three-quarters of its entire lending portfolio. The bank has a market capitalization of $7 billion.

NYCB posted third quarter earnings on October 26th, 2023, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to 36 cents, which was a penny better than expected. Earnings fell from 47 cents in Q2, but rose nicely from 31 cents a year ago. Revenue was $1.04 billion, and beat estimates by over $100 million. Net interest margin came to 3.27%, which was up six basis points over the June quarter.

The company noted it was growing its loan book despite higher interest rates, and that deposit trends were stable. Net interest income was $882 million, down from $900 million in Q2, and almost triple the $326 million from the same quarter a year ago.

The payout ratio has improved greatly in recent years, and NYCB is in a much better position to afford its current payout. We don’t foresee any cuts upcoming. NYCB stock currently yields 7.3%.

Best Buy (BBY)

Best Buy Co. Inc. is one the largest consumer electronics retailers in North America with operations in the U.S. and Canada. Best Buy sells consumer electronics, personal computers, software, mobile devices, and appliances and provides services.

Best Buy reported better than expected Q2 FY2024 on August 29th, 2023. Enterprise revenue decreased to $9,583M from $10,329M and non-GAAP diluted EPS decreased to $1.22 from $1.54 on a year-over year basis. GAAP diluted EPS decreased to $1.25 from $1.35. Comparable enterprise revenue decreased 6% year-over-year. Domestic revenue fell 7% year-over-year.

Best Buy benefitted from the pandemic and is now seeing tough comparisons. However, the company is undergoing a restructuring to align its cost structure with current business trends. Best Buy updated FY 2024 guidance at revenue of $43.8B to $44.5B and non-GAAP diluted EPS at $6.00 to $6.40.

And Best Buy is situated well once pandemic trends end, and the company returns to growth. Best Buy’s Geek Squad and TotalTech services offer advantages relative to traditional retailers providing a level of expertise and service not typically found at other retailers. Also, the firm has nearly six million paid membership customers, providing another advantage for installation and services.

The company remains highly profitable which will cover its dividend. Due to the downtrend in the stock, BBY trades for a forward P/E of just 10.6. This is an attractive multiple for value investors. In addition the stock has a 5.5% dividend yield. With a 2023 dividend payout ratio expected to be 60%, the dividend looks secure.

Whirlpool Corporation (WHR)

Whirlpool Corporation, founded in 1955 and headquartered in Benton Harbor, MI, is a leading home appliance company with well-known brands like Whirlpool, KitchenAid, and Maytag. Roughly half of the company’s sales are in North America, but Whirlpool does business around the world under 13 principal brand names.

The company, which employs about 61,000 people, generated nearly $20 billion in sales in 2022. On January 17th, 2023, Whirlpool entered into an agreement with Arçelik A.Ş to transform its portfolio. Whirlpool is contributing its European major domestic appliance business, while Arçelik will contribute its major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses into a newly formed entity.

On October 25th, 2023, Whirpool reported third quarter 2023 results. For the quarter, sales came in at $4.9 billion, which was down 3.0% compared to third quarter 2022. Ongoing earnings per diluted share was $5.45 in the quarter, 21% above last year’s $4.49 per share. Whirlpool updated its 2023 guidance, which sees ongoing earnings-per-share coming in at $16.00 on revenue of $19.4 billion, representing a 1% to 2% decline from the prior year.

Additionally, Whirlpool expects cash provided by operating activities to total roughly $1.1 billion, with $500 million in free cash flow. Its strong free cash flow secures the dividend payout. WHR has increased its dividend for 12 consecutive years. WHR currently yields 6%.

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