Three high-yield stocks to bet on

With possible rate cuts, and lowering yields, investors may find more comfort in dividend-paying stocks as a better alternative to bonds

Vikram Barhat 31 July, 2019 | 2:22AM

Birds Flying High

Growing concerns over global growth, the ongoing Brexit stalemate, and the spectre of the seemingly unending U.S.-China trade war have continued to hammer government bond yields and fuel market anxiety.  The U.S. 10-year Treasury yield is currently hovering around 2% forcing many investors to look beyond traditional safe haven assets. In fact, just under half (44%) of S&P 500 stocks are yielding more than 10-year government bonds, according to research firm FactSet.   

The U.S. Federal Reserve cut the benchmark interest rate by 25 basis points today, and many analysts have priced in more than one rate cut before the end of 2019.

With yields this low, and falling further, investors in risk-off mode may find more comfort in dividend-paying stocks as a better alternative to bonds. Dividend-paying stocks are a great way to participate in equity markets for both income and total return. While some sectors offer higher yields than others, prudent investors tend to pick winning stocks rather than sectors. These companies, from diverse sectors, offer stable and predictable dividend payout, have steady cash flow, and potential for some price appreciation.

Dominion Energy Inc

 

Ticker

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Compass Minerals International Inc56.69 USD0.00
Dominion Energy Inc79.71 USD0.00
GlaxoSmithKline PLC21.50 CHF0.00

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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