The true underlying catalyst for this 11 year bull rally has been the historic low interest rates. Not just in the US, but around the globe thanks to unprecedented central bank intervention.

Why? Because the net result of this move is to make holding cash unattractive leading to greater risk taking in places like business investment and the stock market. That certainly is a big part of the 383% gains for the S&P since the rally began in March 2009.

The group of stocks that has benefited the most is income stocks. That is because investors demanding income will go hungry looking for it in traditional places like CD’s, money markets and bonds.

Interestingly the stampede to income stocks paused a few months back when investors flipped the switch to a more Risk On approach. But now with the corona virus taking center stage, Risk Off investing is coming back into vogue. With that 10 year Treasury rates have tumbled to 1.52% and the drum beat for income stocks has grown louder.

This sets the backdrop for today’s article focused on the best looking income stocks at this time. Not just those with highest yields, but those showing ample price momentum found in the them all carrying a POWR Rating of A (Strong Buy).

Let’s not forget that the POWR Ratings is focused on both long term and short term momentum. The most common driver of that timely price action is impressive earnings performance outlook which often leads to higher and higher dividend payments in the future.

You will find the full table with the 8 extreme dividend yield stocks further below. But I thought it would be worthwhile to highlight a few of them that to appreciate what is so attractive about these shares:

Annaly Capital Management (NLY)

Sometimes when its windy a golfer will pull out a 3 iron to make sure their drive lands on the fairway. NLY is the 3 iron shot of this group given that this REIT is the most well established company at nearly 14 billion market cap. Beyond the appealing 12.3% yield NLY also provides investors with a great earnings outlook after the last quarterly report. This has created the momentum towards Annaly shares found in the POWR Rating of A (Strong Buy).

Orchid Island Capital (ORC)

If NLY is the safe pick…then ORC is the risky one. That’s because when you get past their savory 15.89% dividend yield you find a sour history of earnings decline. That has also culminated in ORC’s dividend being cut from 14 cents per quarter in the past to the current 8. However, ORC has been paying out that 8 cents per quarter since mid 2018. And their recent earnings picture gives a glimpse that operations may have stabilized. If true, then ORC could soon be ready to increase their dividend payment which no doubt would have shares on the incline. So Orchid Island does have some additional risk, but there is good reason to believe it could have more reward.

New Residential Investment Corp (NRZ)

NRZ may be the happy medium between NLY and ORC. This REIT packs plenty of punch with a 11.95% yield. Add to that the second largest market cap of the list at nearly 7 billion. But also NRZ is amongst the most timely of the group with a strong gain of about 4% year to date on top of 29% gain in 2019 and an impressive 146% gain the last 5 years to go along with that solid income stream. So NRZ should definitely be on your short list after reading this article.

Here is the list of all 8 stocks combining both the timeliness found in the POWR Ratings to go along with that high dividend yield. Be sure to investigate them more in depth including all 4 components of the POWR Ratings of each stock. And the dividend history (since history has a way of repeating itself).

Want more great stock picks? Then check out these additional resources:

High Dividend Yield Stock Screener

POWR Ratings Full Strong Buys List

Reitmeister Total Return portfolio

NLY shares closed at $9.76 on Friday, down $-0.04 (-0.41%). Year-to-date, NLY has gained 3.61%, versus a -0.04% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

More Resources for the Stocks in this Article