In this article, we discuss 12 best dividend stocks paying over 6%. You can skip our detailed analysis of dividend stocks and their performance in the past, and go directly to read 5 Best Dividend Stocks Paying Over 6%.
Dividends are crucial in investing because they provide investors with consistent income. They have played a big role in boosting the overall returns of the market. Looking at the S&P 500 Index from 1960, about 69% of its total return comes from reinvested dividends and the magic of compound interest, as reported by Hartford Funds. Essentially, this process creates a snowball effect, enabling investors to benefit not just from the dividends themselves but also from the growth of those reinvested dividends over time. Dividend yield is another key aspect of dividend investing that holds significant popularity. Investors keen on income often look for stocks with attractive dividend yields, as it indicates how much cash flow they will receive relative to their investment.
A healthy range for dividend yields can vary based on factors like the industry, economic conditions, and the specific company's stability. Typically, dividend yields falling between 3% to 6% are considered a good balance between generating meaningful income and indicating a company's ability to sustain and grow dividends. However, excessively high yields, say over 8% or 10%, might signal potential risks such as an unsustainable payout or market concerns about the company's future performance. However, this doesn't apply to numerous companies that provide higher-than-average dividend yields while upholding a robust history of consistent dividend payments. Take, for instance, Leggett & Platt, Incorporated (NYSE:LEG), Altria Group, Inc. (NYSE:MO), and Enterprise Products Partners L.P. (NYSE:EPD), all boasting yields exceeding 7% while also consistently increasing their dividend payouts.
The Wellington research showed how well stocks with high dividends performed in the past. The study looked at S&P 500 stocks that pay dividends and divided them into five groups based on their dividend and yields. The top 20% of dividend payers formed the first group, while the lowest payers and non-payers made up the fifth group. They tracked how these groups performed in each decade from 1930 to 2019. What they found was that the second group, with moderate dividend payouts, did better than the S&P 500 in seven out of nine periods. The first and third groups were next, performing similarly and outperforming the index in six out of nine periods. However, the fourth and fifth groups didn't do as well, outperforming the index only four times each.
Other reports, like the Wellington study, have shown the strong performance of high-dividend stocks. Our article titled 11 Best High-Dividend Stocks to Buy Now delved into more recent research, confirming that stocks with high dividends are still valuable. A 2020 study from the Centre for Endowment Asset Management and the University of North Carolina supported this idea. It covered nearly a century of data, from July 1928 to June 2019 in the US market, and found that portfolios with higher dividend yields provided better returns for investors. These portfolios outperformed those with low or no dividends by a significant margin: 199 basis points better than low-yield portfolios and 330 basis points better than zero-yield portfolios.
In this article, we will discuss some of the best dividend stocks with yields above 6%.
Our Methodology:
For this list, we scanned Insider Monkey's database of 910 hedge funds as of Q3 2023 and picked dividend stocks that have yields above 6%, as of November 23. Though very high yields can pose risks, we selected companies from the list known for consistently paying dependable dividends. The stocks are ranked in ascending order of hedge fund investors having stakes in them.
Medical Properties Trust, Inc. (NYSE:MPW) is an American real estate investment trust company that focuses on investing in and owning healthcare facilities. The company reported mixed results in the third quarter of 2023, reporting revenue of $306.5 million, which fell by 13% from the same period last year. However, its cash position for the quarter remained strong with over $340 million available in cash and cash equivalents.
On November 9, Medical Properties Trust, Inc. (NYSE:MPW) declared a quarterly dividend of $0.15 per share, which was consistent with its previous dividend. The stock has a dividend yield of 13.19%, as of November 23.
At the end of Q3 2023, 18 hedge funds in Insider Monkey's database reported having stakes in Medical Properties Trust, Inc. (NYSE:MPW), compared with 20 in the previous quarter. The consolidated value of these stakes is roughly $150 million.
Leggett & Platt, Incorporated (NYSE:LEG) is a diversified manufacturer that produces a wide array of engineered components and products for various industries. The company offers a quarterly dividend of $0.46 per share and has a dividend yield of 7.94%, as of November 23. It is one of the best dividend stocks on our list as the company has been growing its dividends for 52 consecutive years.
In the third quarter of 2023, Leggett & Platt, Incorporated (NYSE:LEG) reported a strong cash position, as it generated approximately $144 million in operating cash flow, which showed an increase of $78 million from the same period last year. The company ended the quarter with $274 million cash on hand. For FY23, it expects to return $240 million to shareholders through dividends.
As of the close of Q3 2023, 19 hedge funds tracked by Insider Monkey reported having stakes in Leggett & Platt, Incorporated (NYSE:LEG), up from 18 in the previous quarter. The collective value of these stakes is more than $146 million. Among these hedge funds, Millennium Management was the company's leading stakeholder in Q3.
W. P. Carey Inc. (NYSE:WPC) is an American real estate investment trust company that primarily engages in acquiring and managing commercial real estate properties across various sectors. The company's dividend growth streak currently stands at 13 years and it pays a quarterly dividend of $1.071 per share. With a dividend yield of 7.34%, as of November 23, WPC is one of the best dividend stocks on our list.
W. P. Carey Inc. (NYSE:WPC) was a part of 21 hedge fund portfolios at the end of Q3 2023, which remained unchanged from the previous quarter. The total value of these stakes is over $202.7 million.
Enterprise Products Partners L.P. (NYSE:EPD) is an American leading midstream energy company that focuses on the gathering, transportation, storage, and processing of natural gas, crude oil, refined products, and petrochemicals. In the third quarter of 2023, the company reported revenue of $12 billion, which beat analysts' consensus by $370 million. Its operating cash flow for the quarter came in at $2 billion during the quarter.
Enterprise Products Partners L.P. (NYSE:EPD) currently offers a quarterly dividend of $0.50 per share and has a dividend yield of 7.49%, as of November 23. The company has been rewarding shareholders with growing dividends for the past 24 years, which makes EPD one of the best dividend stocks on our list.
As of the end of September 2023, 25 hedge funds tracked by Insider Monkey owned investments in Enterprise Products Partners L.P. (NYSE:EPD), which remained the same from the previous quarter. The overall value of these stakes is over $325.2 million.
UGI Corporation (NYSE:UGI) is a diversified energy company that operates in various segments within the energy industry. The company declared a quarterly dividend of $0.375 per share on November 16, which fell in line with its previous dividend. It holds an impressive 39-year streak of consistent dividend growth and has been making regular dividend payments to shareholders for the past 139 years. The stock's dividend yield on November 23 came in at 6.89%.
The number of hedge funds tracked by Insider Monkey owning stakes in UGI Corporation (NYSE:UGI) grew to 29 in Q3 2023, from 22 in the preceding quarter. The consolidated value of these stakes is nearly $292 million. With over 6.6 million shares, First Eagle Investment Management was the company's leading stakeholder in Q3.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a global pharmacy-led health and well-being company with a presence in multiple countries. It operates a diverse set of businesses within the healthcare and retail sectors. The company offers a quarterly dividend of $0.48 per share and has been growing its dividends for 47 consecutive years. As of November 23, the stock has a dividend yield of 9.28%, which makes it one of the best dividend stocks on our list.
Insider Monkey's database of Q3 2023 indicated that 31 hedge funds owned investments in Walgreens Boots Alliance, Inc. (NASDAQ:WBA). The collective value of these stakes is roughly $460 million. Among these hedge funds, Marshall Wace LLP was the company's leading stakeholder in Q3.
KeyCorp (NYSE:KEY) is an American bank holding company that offers a wide range of related services to its consumers. In the third quarter of 2023, the company posted revenue of $1.57 billion, which beat analysts' consensus by $10 million. The company ended the quarter with $766 million available in cash and due from the banks, up from $717 million in the same period last year.
KeyCorp (NYSE:KEY), one of the best dividend stocks, has been raising its dividends for 12 years running. The company currently offers a quarterly dividend of $0.205 per share and has a dividend yield of 6.82%, as of November 23.
As of the end of Q3 2023, 42 hedge funds owned stakes in KeyCorp (NYSE:KEY), according to Insider Monkey's database. These stakes are collectively valued at roughly $650 million.
