I love fat payouts from dividend stalwarts. In fact, I've recommended a couple that I called "dividend plays for a lifetime" for their strong competitive positions and hidden assets. Those two stocks -- Microsoft and McDonald's -- are solid long-term dividend plays. But often, it can be more valuable to find higher-yielding stocks that are slower- growing, rather than a Microsoft that is fattening dividends at a prodigious clip.
For example, take a stock with a 6% yield growing at just 5% per year, and a stock like McDonald's paying 3% and growing around 10% per year. It will take almost 15 years for the low-yielder's payout to catch up with the high-yielder's, even though the low-yielder's growing faster. To be fair, that doesn't include capital gains, which would likely be better for a McDonald's-type stock. Still, if you need current cash flow, you don't want to wait for capital gains. So today, I want to take a look at some high-yielding stocks that could be great plays for 2011.
Source: Motley Fool
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