High-Yield Stocks With Stamina

In a world where sideways markets and sovereign debt downgrades no longer raise eyebrows, yield-hungry investors face a narrowing field of choices. Many have turned to dividend stocks to augment their returns. Dividend stocks don’t offer the same level of security as federal government bonds, which are backed by Ottawa. You can count on your semi-annual interest payments from a federal government bond, but with a dividend growth stock, you depend on the financial well-being of the company.

The stocks provided by this screen lean toward energy and utilities, sprinkled with a few consumer retail and health care companies. Only two stocks pay a double-digit dividend, while the majority live in the 4- to 6-per-cent range. A word of caution when it comes to searching for dividend stocks. The danger in choosing stocks based solely on the dividend is that ultrahigh yields may signal that the dividend is at risk of being cut. By screening for consistency, as this we have done here, this risk is reduced, but not eliminated.

Source: Globe and Mail

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