Investors love dividend stocks but there are different ways to look at them, including various “quality” approaches. Today we are focusing on high yields.
A high dividend yield can be a warning that investors have lost confidence in a company’s ability to maintain its dividend payout. But there are always exceptions, some of which can be brought about by market events — some investors remain skeptical of energy stocks, for example, after so much pain before this year’s outstanding performance for the sector.
Below is a screen of stocks that have high dividend yields and are favored by analysts. The screen has no financial quality filters.
For investors who are interested in dividend stocks but wish to focus on quality and total returns, this recent look at the S&P Dividend Aristocrats (companies that have raised dividends consistently for many years) might be of interest. For those looking for income but also worried about dividend cuts, here is a list of stocks with dividend yields of at least 5% whose payouts are expected to be well-covered by free cash flow in 2023.
If you are looking for higher yields with moderate risk, you should at also learn about funds that use covered-call option strategies to enhance income.
Removing the filters for a high-yield dividend-stock screen
For a broad screen of stocks with high dividend yields that are favored by analysts, we began with the S&P Composite 1500 Index
SP1500,
which is made up of the S&P 500
SPX,
the S&P 400 Mid Cap Index
MID,
and the S&P 600 Small Cap Index
SML,
The S&P indexes exclude energy partnerships, so we added the 15 stocks held by the Alerian MLP ETF
AMLP,
to the list. Energy partnerships tend to have high distribution yields, in part because they pass most earnings through to investors. But they also can make tax preparation more complicated. They can also be volatile as oil
CL00,
CL00 and natural-gas
NG00,
prices swing.
The S&P indexes also exclude business development companies, or BDCs, so we expanded our initial screen to include the 24 stocks held by the VanEck BDC income ETF
BIZD,
BDCs are specialized leveraged lenders that make loans with high interest rates, mainly to middle-market companies. They often take equity stakes in the companies they lend to, for a venture-capital-type of investment style. The BDC space features several stocks with very high dividend yields, but is also known for volatility.
You have been warned — this particular stock screen focuses only on high yields and favorable ratings among analysts working for brokerage firms. There is no look back at dividend cuts and no cash-flow analysis as featured in other dividend-stock articles. If you see anything of interest resulting from the screen, you need to do your own research to consider whether or not a long-term commitment to one or more of these companies is worth the risk as you seek high income.
The screen
Starting with the S&P Composite 1500 and the components of AMLP and BIZD, there are 68 stocks with dividend yields of at least 8%, according to data provided by FactSet.
Among the 68 companies, 55 made the first screen, because they are covered by at least five analysts polled by FactSet.
Among the 55 companies, 11 have “buy” or equivalent ratings among at least 70% of analysts.
Here they are, ranked by upside potential implied by analysts’ consensus price targets:
| Company | Ticker | Dividend yield | Share “buy” ratings | Dec. 20 price | Consensus price target | Implied 12-month upside potential |
| Energy Transfer LP |
ET, |
9.08% | 95% | $11.68 | $16.24 | 39% |
| Enterprise Products Partners LP |
EPD, |
8.12% | 79% | $23.39 | $31.69 | 35% |
| Barings BDC Inc. |
BBDC, |
11.67% | 86% | $8.14 | $10.75 | 32% |
| Redwood Trust Inc. |
RWT, |
13.45% | 80% | $6.84 | $8.92 | 30% |
| Crestwood Equity Partners LP |
CEQP, |
9.75% | 100% | $26.86 | $35.00 | 30% |
| KKR Real Estate Finance Trust Inc. |
KREF, |
11.90% | 71% | $14.45 | $18.50 | 28% |
| Owl Rock Capital Corp. |
ORCC, |
11.21% | 91% | $11.78 | $14.73 | 25% |
| Sixth Street Specialty Lending Inc. |
TSLX, |
10.48% | 82% | $17.18 | $20.90 | 22% |
| Oaktree Specialty Lending Corp. |
OCSL, |
9.97% | 100% | $6.77 | $7.75 | 14% |
| Ares Capital Corp. |
ARCC, |
10.45% | 93% | $18.38 | $20.87 | 14% |
| BlackRock TCP Capital Corp. |
TCPC, |
10.25% | 71.43% | $12.49 | $14.00 | 12% |
| Source: FactSet | ||||||
One way to begin your own research into any company listed here is to click on the ticker for more information.
You should also read Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.
Investors love dividend stocks but there are different ways to look at them, including various “quality” approaches. Today we are focusing on high yields.
A high dividend yield can be a warning that investors have lost confidence in a company’s ability to maintain its dividend payout. But there are always exceptions, some of which can be brought about by market events — some investors remain skeptical of energy stocks, for example, after so much pain before this year’s outstanding performance for the sector.
Below is a screen of stocks that have high dividend yields and are favored by analysts. The screen has no financial quality filters.
For investors who are interested in dividend stocks but wish to focus on quality and total returns, this recent look at the S&P Dividend Aristocrats (companies that have raised dividends consistently for many years) might be of interest. For those looking for income but also worried about dividend cuts, here is a list of stocks with dividend yields of at least 5% whose payouts are expected to be well-covered by free cash flow in 2023.
If you are looking for higher yields with moderate risk, you should at also learn about funds that use covered-call option strategies to enhance income.
Removing the filters for a high-yield dividend-stock screen
For a broad screen of stocks with high dividend yields that are favored by analysts, we began with the S&P Composite 1500 Index
SP1500,
which is made up of the S&P 500
SPX,
the S&P 400 Mid Cap Index
MID,
and the S&P 600 Small Cap Index
SML,
The S&P indexes exclude energy partnerships, so we added the 15 stocks held by the Alerian MLP ETF
AMLP,
to the list. Energy partnerships tend to have high distribution yields, in part because they pass most earnings through to investors. But they also can make tax preparation more complicated. They can also be volatile as oil
CL00,
CL00 and natural-gas
NG00,
prices swing.
The S&P indexes also exclude business development companies, or BDCs, so we expanded our initial screen to include the 24 stocks held by the VanEck BDC income ETF
BIZD,
BDCs are specialized leveraged lenders that make loans with high interest rates, mainly to middle-market companies. They often take equity stakes in the companies they lend to, for a venture-capital-type of investment style. The BDC space features several stocks with very high dividend yields, but is also known for volatility.
You have been warned — this particular stock screen focuses only on high yields and favorable ratings among analysts working for brokerage firms. There is no look back at dividend cuts and no cash-flow analysis as featured in other dividend-stock articles. If you see anything of interest resulting from the screen, you need to do your own research to consider whether or not a long-term commitment to one or more of these companies is worth the risk as you seek high income.
The screen
Starting with the S&P Composite 1500 and the components of AMLP and BIZD, there are 68 stocks with dividend yields of at least 8%, according to data provided by FactSet.
Among the 68 companies, 55 made the first screen, because they are covered by at least five analysts polled by FactSet.
Among the 55 companies, 11 have “buy” or equivalent ratings among at least 70% of analysts.
Here they are, ranked by upside potential implied by analysts’ consensus price targets:
| Company | Ticker | Dividend yield | Share “buy” ratings | Dec. 20 price | Consensus price target | Implied 12-month upside potential |
| Energy Transfer LP |
ET, |
9.08% | 95% | $11.68 | $16.24 | 39% |
| Enterprise Products Partners LP |
EPD, |
8.12% | 79% | $23.39 | $31.69 | 35% |
| Barings BDC Inc. |
BBDC, |
11.67% | 86% | $8.14 | $10.75 | 32% |
| Redwood Trust Inc. |
RWT, |
13.45% | 80% | $6.84 | $8.92 | 30% |
| Crestwood Equity Partners LP |
CEQP, |
9.75% | 100% | $26.86 | $35.00 | 30% |
| KKR Real Estate Finance Trust Inc. |
KREF, |
11.90% | 71% | $14.45 | $18.50 | 28% |
| Owl Rock Capital Corp. |
ORCC, |
11.21% | 91% | $11.78 | $14.73 | 25% |
| Sixth Street Specialty Lending Inc. |
TSLX, |
10.48% | 82% | $17.18 | $20.90 | 22% |
| Oaktree Specialty Lending Corp. |
OCSL, |
9.97% | 100% | $6.77 | $7.75 | 14% |
| Ares Capital Corp. |
ARCC, |
10.45% | 93% | $18.38 | $20.87 | 14% |
| BlackRock TCP Capital Corp. |
TCPC, |
10.25% | 71.43% | $12.49 | $14.00 | 12% |
| Source: FactSet | ||||||
One way to begin your own research into any company listed here is to click on the ticker for more information.
You should also read Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.
