Wednesday, June 18, 2008

20 Highest-Yielding High Yield Dividend Aristocrats

In my previous post The 20 Highest Yielding Dividend Aristocrats I highlighted a sample list of the 20 highest yielding dividend aristocrats. Being fascinated with companies which have consistently increased their dividends for over 25 years, I wanted to examine a similar list, using the High-Yield Dividend Aristocrats this time. You could open it in google spreadsheets from here.
This stock list is just for illustrative purposes only, however, and not a recommendation to buy or sell. Its performance could be better or worse than the S&P 500 benchmark.

The list, dominated by financial companies, yields a whopping 6.37% as of June 14,2008. On the cautionary note, some of the companies in this list seem likely to cut their payments. With the exception of certain income trusts, I would not consider entering a long-term position in a company whose dividend payout ratio is significantly over 50%.

On the contrary side, in a study performed by Jeremy Siegel, he found that better total return performance was directly correlated with higher dividend yields. The highest yielding 100 stocks in the S&P 500, produced an annualized return of 14.27% versus an annualized return of 11.18% for the S&P 500 Index, which resulted in three times the wealth accumulation of the index. (1957-2002, S&P 500). So far this year certain higher yielding stocks in the S&P 500 have underperformed the market.

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