Dividend yields are often the first metrics used to choose income investments. However, having traded stocks since 1999, I’ve come to realize that yields don’t paint the whole picture. Yields, for example, aren’t guaranteed; companies can stop growing, cut, or even stop paying dividends. As a result, income investors should consider factors other than yield alone when stock picking.
Uncovering Potential Winners
I scoured the market using Barchart’s Free Stock Screener tool for the cheapest, highest-rated, and highest-yielding stocks based on specific criteria.
By setting a minimum analyst rating and ensuring a favorable P/E ratio compared to the sector’s, I narrowed down potential contenders to 193 stocks across diverse markets.
Civitas Resources (CIVI)
Civitas Resources, an oil and gas company, maintains its foothold in the industry while emphasizing carbon neutrality and robust ESG practices.
Although 2023 saw a slump in net income, CEO Chris Doyle remains optimistic about maximizing free cash flow and delivering value to shareholders. With an annual dividend of $5.80, yielding 8.22%, and a strong buy rating from analysts, CIVI stock offers compelling prospects.
Blackstone Secured Lending (BXSL)
Blackstone Secured Lending focuses on investments in various sectors, boasting a substantial portfolio valued at $9.9 billion. The company’s robust financials, coupled with a healthy dividend yield of 9.62%, position BXSL stock as an attractive proposition.
With improving metrics, including a 16% growth in net income and ample liquidity for expansion, Blackstone is primed for sustained success.
Trinity Capital (TRIN)
Specializing in venture debt and equipment financing, Trinity Capital stands out with a strong average rating from analysts and an impressive forward annual dividend rate of $2.04, translating to a remarkable 14.08% yield.
Following a stellar Q1’24 performance, Trinity Capital continues its trend of consistent growth and dividend increases, cementing its status as a lucrative investment option.
Should High-Yield Stocks Be Your Next Move?
While high-yield and highly rated stocks hold allure, remember the age-old advice: never rely solely on one metric for investment decisions. Combining various factors and intuition is key to making informed choices in the market.