12 High Dividend Stocks That May Be Reasonably Valued

High dividend stocks are attractive if they can be bought for a reasonable valuation. There is always a balance to find when looking for such stocks. We do not want to pick out the very high yielders, as they may indicate a company in distress and where the dividend may be unsustainable.

The following list of 12 stocks includes companies that yield comfortably more than 3%. In the current low interest environment, this is a very good dividend yield. 10 year treasury notes today yield about 2.22% so these stocks have a dividend yield that is about 100 bps or more higher than the 10 year treasury benchmark.

High Dividend Stocks and Dividend Safety

Sometimes high dividends can be transient as the business may not be able to support it long term. In compiling this list, we have also considered the safety of the dividend and this is indicated by a high dividend coverage ratio. These companies have also grown their dividends at a nice clip over the last 5 years which shows their commitment to dividend payments and shareholder returns. While nothing is certain, this is a great list to start with and conduct further research in each of these stocks to figure out if they are good investments for your portfolio or not.

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Brief Description

I have listed brief description of the first 5 stock ideas. You may wish to review the entire list, as this list is in no particular order. No recommendation is implied as further due diligence is required.

CALM: Cal Maine Foods Inc.

The company pays a dividend that tends to be different each quarter. In the last quarter, the company paid 98 cents/share dividend which was almost triple the dividend amount in each of the previous 3 quarters. If annualized, the last dividend represents a 7% yield. The egg producer has benefitted tremendously from record high egg prices this year with revenues in the previously reported quarter up 79% from the comparable period. Whether this is sustainable or not is the question, and will be the primary determinant of the investment thesis behind this stock.

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