The past two months I have been turning up the dial on more growth, momentum and Risk On stocks. The kind of stocks found in recent articles like:
This more aggressive investing strategy has certainly paid the bills. However, now I sense we are running to a near term top of 3,100 where it’s time to turn back to the safety of high dividend yields for outperformance. Shell Midstream (SHLX - Get Rating) is the perfect example.
What first pops off the screen is the 8.7% dividend yield for SHLX. But as we pull back the curtain we actually discover that this dividend yield has increased by an average of 49.4% per year over the past 5 years. This gives GREAT confidence that Shell Midstream will continue to provide a stable stream of income into the future that should also lead to price appreciation.
My research today brought up 8 elite income stocks in total. And at the other end of this stock table from SHLX is Arbor Realty Trust (ABR). Their 8.1% dividend yield is eye opening for sure. So is ABR’s average dividend increase of 19% a year.
Arbor is also an impressive momentum stock. Not only has it gained 13% in the past month, but ABR is also up 57% year to date and 240% the past 5 years. No wonder ABR scores both a Trade Grade of A and Buy and Hold Grade of A according to the POWR Rating model.
Let me take a step back for a second and share the specifics of this stock search so you appreciate the full attractiveness of these top end income payers:
1978 stocks with a POWR Ratings of A and B. Always need to start the party with our proprietary ratings model that finds stocks with the best momentum and timeliness.
82 of those stocks have 8% dividend yield or higher. So this single criteria quickly got rid of 95% of the potential candidates.
22 of those stocks have grown dividend payments by greater than 5% per year for the past 5 years. And from there I whittled it down to the 8 with the most impressive rate of annual dividend increases.
The logic of all this final criteria should be readily apparent. That these stocks with increased dividends in the past are more likely to keep up that trend in the future. But also it is hard to pay more dividends if the company is not producing enough earnings and cash flow to make it happen. So this is an important health check on the operational strength of the firm.
OK…you get the idea. These are not just your ordinary high yield stocks. They have been specifically selected to also provide proof of operational strength, history of dividend increases, and ample momentum. See all 8 below.
|Company||Ticker||Market Cap ($mil)||Price||Div Yield %||Div 5yr Growth %|
|Global Net Lease||GNL||$1,620||$19.32||11.0||28.9|
|Great Ajax Corp||AJX||$309||$15.70||8.2||23.1|
|Newtek Bus Svcs||NEWT||$431||$22.48||10.3||22.5|
|Arbor Realty Trust||ABR||$1,400||$14.32||8.1||19.3|
Want more great stock picks? Then check out these additional resources:
SHLX shares were trading at $20.54 per share on Wednesday afternoon, up $0.08 (+0.39%). Year-to-date, SHLX has gained 36.03%, versus a 24.59% 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
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|SHLX||Get Rating||Get Rating||Get Rating|
|ABR||Get Rating||Get Rating||Get Rating|
|GNL||Get Rating||Get Rating||Get Rating|
|NEWT||Get Rating||Get Rating||Get Rating|
|USDP||Get Rating||Get Rating||Get Rating|