Please enable JavaScript to view the comments powered by Disqus.
Advertisement
Slide Show

1 of 8

7 Great High-Yield Dividend Stocks That Nobody Talks About

Getty Images

Advertisement

It’s hard to believe given how violently stocks sold off last quarter, but most corners of the market are already optimistically priced again. The Standard & Poor’s 500-stock index is just 6% below its all-time highs and trades at a sky-high price-to-sales ratio of 2.1.

It’s the same story in the income space. After topping out late last year, rising bond prices have clipped bond yields. As recently as late October, the 10-year Treasury yielded 3.2%. Today, it yields less than 2.7%. And most of the larger “bond substitutes” among large-cap dividend stocks and real estate investment trusts (REITs) don’t yield much better.

Advertisement

If you want a respectable yield, you must hunt for it among smaller names that Wall Street tends to overlook. It’s not for the faint of heart; small-cap stocks have less research coverage and tend to be more volatile.

But with this increased volatility comes the possibility of vastly better returns. A study by Dimensional Fund Research covering 1926-2016 found that small-cap value stocks returned 15.2% per year on average, nearly 50% better than the 10.3% returned by the S&P 500. This is consistent with work by professors Eugene Fama and Kenneth French and others who have explored the “small cap anomaly.”

“Searching for high-quality value stocks in the small-cap space is a tried and true method that works over time,” says John Del Vecchio, co-manager of the AdvisorShares Ranger Equity Bear ETF (HDGE). “It doesn’t work every year or in every market. But over time, the numbers speak for themselves.”

Here are seven solid, mostly smaller, dividend stocks that are off the radars of most investors, both professionals and individuals alike. Expect higher-than-normal volatility, but all pay high enough dividends – between roughly 5% and 12% – to make that additional risk worth taking.

SEE ALSO: 18 Dividend Aristocrats That Have Gone on Deep Discount

Data is as of Feb. 18. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price.

Advertisement

View as One Page

Advertisement
Sponsored Financial Content