9 Top Stocks With Big,
Safe Dividends

Let’s face it… investors like you have been forced to wander around in a desert of rock-bottom yields for the last several years. That’s because global central banks slashed benchmark interest rates more than 667 times, and drove rates even further into the gutter with more than $12 trillion in quantitative easing (known as QE).

The U.S. Federal Reserve is finally starting to change direction, hiking short-term rates a handful of times since December 2015. But we’re still talking about a benchmark rate of only 1.75%. That’s peanuts in the grand scheme of things — and it means we’re still stuck in a wasteland of low yields for income-seeking investors.

Bank savings accounts yield an average of only 0.09%, according to Bankrate.com.

One-year Certificates of Deposit yield only 1.96%.

Money market mutual funds yield just 0.35%, according to the Wall Street Journal.

Even the S&P 500 yields just 1.8%.

You can’t live off that. I can’t live off that. No one in their right mind can live off that!

What you need is more income. Higher-yielding investments that offer market-beating (and reliable) dividend payments. That’s the way to build long-term, lasting wealth, according to several reliable studies.

Consider: The long-term, annualized, average gain for stocks is around 7.9%. But roughly 5 percentage points of that return historically stems from dividends. Another 0.8 percentage points comes from real growth in dividends.

Strip all that out, and you’re left with only the returns generated by inflation and rising valuations — around 2.1%. So, by focusing on dividend-paying stocks with relatively high, yet reliable yields, you could’ve boosted your annual returns by almost 3.8 times.

Here’s another example of the power of high-yield investing…

Let’s say you invested $1 million in the 20% of stocks paying the highest dividends in 1928. Now in case your history is a bit rusty, that’s just BEFORE the devastating stock market crash of 1929 — the one that had stock brokers jumping out of windows in New York City.

Even taking into account the impact of the crash, and if you stuck with that strategy all the way through year-end 2016, you’d have a whopping $9.1 billion to show for it!

If you had bought stocks that paid no dividends at all, guess what? You’d have just $1.3 billion. Sure, that’s a nice chunk of change ... but it’s 92.6% LESS than you could’ve banked.

That just goes to show the power of high, yet reliable, dividends — and what investing in the right dividend-paying stocks and ETFs can do for you. And in this report, that’s exactly what I’m going to give you.

In the next few minutes you’ll get the names of stocks that yield substantially more than the market!

Now, it isn’t easy to find these gems.

In fact, most Wall Street experts probably don’t have them on their radar, which is why you may have never heard of some of them.

But that’s what my team and I do here at Weiss Ratings ... and the following list of nine stocks is the culmination of our latest research.

Collect Big Dividends AND Grow Your
Money with Top-Rated Stocks

Recommendation #1: First American Financial (FAF, Rated “B”)

I don’t know how well you remember your last home closing. But regardless of whether you received the older “HUD-1” settlement statement, or the newer Closing Disclosure form in use today, one section was dedicated to title-related charges, including title insurance. It’s coverage that protects the mortgage lender or owner of a home against claims related to the property’s trail of ownership and/or outstanding liens and loans.

First American is the second-largest provider of title insurance in the U.S. It also provides closing and escrow services, homeowners and renters insurance, home warranty coverage, assistance with the foreclosure and asset disposition process, and more.

Second-quarter results in 2017 were impressive to say the least. Profit jumped almost 20% to $122.3 million, or $1.09 per share, from $102.1 million, or 92 cents per share in the year earlier period. Even stripping out extraordinary items, the company topped analyst estimates by five cents per share — the seventh “beat” in the last nine quarters.

Sales rose 7% to $1.45 billion, with strength in both title insurance and services and specialty insurance. Cash flow from operations also climbed 13% ... investing income benefitted from the rise in short-term interest rates ... and management spoke optimistically about the outlook for the housing market.

When it comes to quarterly dividends, FAF currently pays out 38 cents per share. That was good for a yield of 2.5% at recent prices — around 70 basis points more than the S&P 500. Plus, that dividend has grown at an average annual rate of 31% over the past three years. FAF has also maintained a BUY grade from our Weiss Ratings system since December 2012.

These are all things that make FAF attractive, and a solid addition any dividend-focused portfolio.

Recommendation #2: Principal Financial Group (PFG, Rated “B”)

Based in Des Moines, Iowa, Principal is a global powerhouse in the insurance, company benefits, and asset management industries. It offers fixed and variable annuities, banking services, life, dental, vision, and accident insurance, asset management, pension risk transfer, and other services to individual and business clients.

In the third quarter of 2017, operating profit rose 11% to $373.7 million, or $1.28 per share, from $335.7 million, or $1.15 per share, a year earlier. Assets under management jumped 10% to $655 billion, cash flow came in strong, and growth was solid across all business lines.

What’s more, from an income perspective, Principal has been a rock star. It just raised its quarterly payout to 49 cents per share in October. That was a 14% jump from 43 cents a year ago. Plus, the company has grown its dividend at an annualized rate of more than 19% in the past half-decade — all while investing in share repurchases, organic growth, and targeted mergers and acquisitions.

Shares of PFG now yield 3.1%, well ahead of the 1.8% yield of the SPDR S&P 500 ETF (SPY, Rated “B-”). Throw in a solid “B” grade from our Weiss Ratings, and I think you have a real winning investment on your hands.

My recommendation: Add PFG to your portfolio.

Recommendation #3: AllianceBernstein Holding LP (AB, Rated “B”)

AllianceBernstein Holding LP (AB, Rated “B”) is a money manager that focuses on a recently out-of-favor investment style — active management.

Everyone and his sister is singing the praises of passive, benchmark-based investing these days — and that has led to outflows from funds managed by companies like AB over the past several years. Its assets under management (AUM) peaked at $800-plus billion in 2007, then steadily declined to less than $500 billion more recently.

But those declines are leveling off now thanks to the introduction of new products and new fee structures designed to encourage inflows. Revenue and earnings trends have stabilized as well.

In fact, in the second quarter of 2017, AB reported an 8% rise in adjusted revenue and a 20% jump in adjusted operating income. Assets under management climbed 5.5% from a year ago.

What’s more, the French insurance giant Axa SA which owns a 64% stake in AB recently cleaned house. It ousted CEO Peter Kraus and several directors, and brought in a former JPMorgan Chase executive Seth Bernstein. We could see some kind of spin off of Axa’s U.S. operations (including AB) next. Or perhaps some firm will step up and buy AB outright.

Bank of America analysts also recently named AB as a primary beneficiary of strong capital markets, rising interest rates, and easier U.S. regulation. The firm also announced that assets under management (AUM) jumped almost 15% to $549 billion in November from $478 billion a year earlier.

Bottom line: There are many ways AB can win. And even if the process takes some time to unfold, you’re getting paid to wait. AB spins off hefty, variable quarterly dividends, including 84 cents per share in March. That’s good for an annualized yield of almost 8.7% — and it beats the pants off the 1.4% yield of the broad-based Financial Select Sector SPDR Fund (XLF, Rated “B”).

Recommendation #4: WEC Energy Group (WEC, Rated “B”)

WEC Energy is a Milwaukee, Wisconsin-based electric and natural gas utility service provider that operates We Energies, Peoples Gas, and We Power, among other subsidiaries. It serves 4.4 million customers in Wisconsin, Illinois, Michigan, and Minnesota.

The company earned $356.6 million, or $1.12 per share, in the first quarter of 2017. That was up 3% from $346.2 million, or $1.09 per share, in the year-earlier period. Revenue rose slightly to $2.3 billion from $2.2 billion, helped along by an increase in customer count.

The utility is continuing to reduce its reliance on environmentally unfriendly coal-generated power, and shifting more toward natural gas as a reliable, cheaper fuel. It’s also investigating various solar and other projects.

WEC was recently yielding 3.4%. That’s almost double the 1.8% yield of the S&P 500. It has also grown its dividend (currently 55 cents per share) at a solid rate over the past three years, and still features a reasonable payout ratio of 66.3%.

Recommendation #5: Texas Instruments (TXN, Rated “B+”)

My next pick is the semiconductor giant Texas Instruments. This company’s products are used in a very wide variety of electronic and industrial devices, making it one of the most diverse chipmakers around. It sports a customer list with about 100,000 names on it.

First-quarter 2017 profit surged more than 29% to $997 million, or 97 cents per share, from $771 million, or 69 cents per share, in the year-earlier period. Sales jumped 13% to $3.4 billion.

Not only did those figures easily surpass analyst estimates, but the double-digit revenue gain was also the largest since 2010. Profit margins are expanding nicely, and the company released a stronger-than-expected forecast for the full year.

TXN features one of the higher Weiss Ratings our firm bestows. It sports a dividend of 62 cents per share, good for a market-beating yield of 2.1%. And even though it has growth that dividend at a 16.8% annualized rate over the past three years, it still has a modest payout ratio of 44.7%. Add it all up and I believe this stock is another solid addition to your holdings.

Recommendation #6: Carnival Corporation (CCL, Rated “B”)

Next up is the cruise ship firm Carnival Corporation. It’s the largest such company in the world, with ships operating under 10 different brands including Carnival, Princess, Holland America, Seabourn, and Cunard.

Profit more than doubled in the first quarter of 2017 to $352 million, or 48 cents a share, from $142 million, or 18 cents a share, in the same period a year earlier. On an adjusted basis, the company beat analyst estimates by three cents per share.

Stronger booking volumes and cruise pricing helped results. Customers are also spending more once they’re on board thanks to add-on, a la carte options. That prompted the company to raise its full-year earnings guidance.

Meanwhile, Carnival just raised its dividend by 13% to 45 cents a share. That equates to an indicated yield of around 2.5% at recent prices, and it means the company has now increased its payout at an annualized rate of 11.9% over the last three years. But it still features a payout ratio of only 37.1%. Don’t miss out on this one!

Recommendation #7: Watsco Inc. (WSO, Rated “B”)

Based in Miami, Watsco is the largest distributor of air conditioning, heating, and refrigeration equipment, parts, and supplies. It’s been a player in the so-called “HVAC/R” industry for more than 60 years, building its business up through organic growth and a steady diet of profit-boosting acquisitions.

Roughly 87% of its sales come from the U.S. market, with another 7% from Latin America and the Caribbean, and 6% from Canada. Residential replacement demand accounts for about 65% to 70% of its business. Another 10% to 15% of its sales come from the new housing market, with the remainder from commercial customers.

Connecting manufacturers like Carrier, Rheem, Goodman, and Lennox with the thousands upon thousands of contractors and tradespeople who install equipment onsite is big business. Net income rose 3% to a record $65 million, or $1.82 per share, in the third quarter of 2017 from $63.1 million, or $1.78 per share, in the year-earlier period.

It doesn’t hurt that overall construction activity remains robust in our country. U.S. construction spending jumped 1.4% to an all-time record of $1.24 trillion in October, fueled by both government and private projects. Meanwhile, housing starts soared almost 14% to a seasonally adjusted annual rate of 1.29 million. That was the second-best reading of the past decade.

Watsco sports a rock-solid “B” grade from Weiss Ratings. It pays out $1.25 per share in quarterly dividends, good for an indicated yield of around 2.7% at recent prices. What’s more, that dividend has grown at an annualized rate of 32% over the past three years — a clear sign of confidence from management about business trends and cash flow generation. Add this one, too.

Recommendation #8: YieldShares High Income ETF (YYY, Rated “C-”)

Next up is the YieldShares High Income ETF (YYY, Rated “C-”). This ETF is considered a “Fund of Funds” because it invests in a basket of Closed End Funds (CEFs) that comprise the 30-member ISE High Income Index.

What are CEFs? Well, like traditional open ended mutual funds, they raise money from investors to invest in a basket of stocks, bonds, or other instruments. But unlike open end funds, they only offer a fixed number of shares at inception. Those shares trade on the stock exchange, rising and falling with demand just like any other stock or ETF.

When you get credit market tremors like we’ve seen in the past several months, CEFs often trade at discounts to their net asset values. That’s because everyone freaks out, selling first and asking questions later. But as long as the underlying merchandise isn’t lousy, those “sales” offer great entry points to get on board. And I believe that the CEFs found in YYY are worth the risk, given the yields they’re spinning off.

Consider: YYY was recently paying out 13 cents per share per month. Assuming that dividend stays constant, it would work out to an indicated yield of around 8.4%. That’s almost TRIPLE the 2.88% recent yield of the 10-Year Treasury Note.

You do have to factor in expenses, for both this ETF and the underlying CEFs it invests in. But the combination of potential price appreciation and that generous yield make YYY an intriguing dividend-paying investment. Buy it.

Recommendation #9: Main Street Capital Corp. (MAIN, Rated “B”)

Business Development Companies, or BDCs, are a type of specialty finance company. They help finance smaller, development-stage and higher-risk companies by investing in their debt and equity securities. Those companies either can’t or don’t want to turn to traditional banks, or need the hands-on advice and mentorship that BDCs provide.

BDC shares trade like any other stock on the major exchanges. But technically, they’re registered as closed end funds. Because the underlying companies they’re lending to are riskier, BDCs receive generous yields on their securities. BDCs then turn around and use the interest income they receive to pay out handsome dividends to shareholders.

Main Street Capital Corp (MAIN, Rated “B”) is one of the highest-rated BDCs in our coverage universe, with a market capitalization of around $2.2 billion. It’s led by Vincent Foster, a certified public accountant and long-time investment manager who has served as MAIN’s CEO for a decade.

At year-end 2016, MAIN managed roughly $3.5 billion in investment capital. Its portfolio of investments was widely diversified across 197 companies, with no firm representing more than 2.8% of total portfolio value.

Those investments were spread around the U.S., with 31% in the mid-South (Texas, Oklahoma, Louisiana, and Arkansas), followed by the Midwest at 23%. Energy, equipment, and services firms represented the largest industry group at 8% of the portfolio. That was followed by media at 6%, construction and engineering at 5%, and electronic components at 5%.

Both total investment income and distributable net income have been growing at high single-digit to respectable double-digit rates for the past half-decade. That includes a 7% rise in net investment income, and a 9% increase in distributable net income, in the fourth quarter of 2016. The weighted average effective yields of its three different types of portfolio investments were 8.5%, 9.6%, and 12.5% in the quarter.

The generous portfolio yields and growing investment income have enabled MAIN to pay handsome dividends to shareholders. Those monthly payouts were running at a 19-cent-per-share rate as of early-2018, and the company also paid supplemental dividends twice in 2017. Those payouts give the stock a dividend yield of around 7.6% — making MAIN a great addition to any dividend-focused portfolio.

Bottom line: If you’re looking to fight back against the tyranny of rock-bottom yields and low returns, these nine payers of generous, reliable dividends are some of the best weapons around. I recommend you put them to work in your portfolio.

With these nine stocks, you can rest easy, knowing your money is growing while you collect ongoing yields of up to 8% or more.

But you don’t have to stop there.

Five Reasons Why Investing in the Right
High-Yield Stocks is So Richly Rewarding

Before I go any further, allow me to introduce myself. My name is Mike Larson, and I’m a Senior Analyst at Weiss Ratings. I’ve been analyzing and trading my way through the investment markets for two decades now.

Tens of thousands of individual and institutional investors have relied on my research to guide them — in the wake of the Tech Wreck, the Housing Bubble and Bust, the Great Recession, and the recovery that has followed.

Moreover, my on-point forecasts and guidance have led to regular appearances on CNBC, CNN, Fox Business News, and Bloomberg News, as well as interviews by reporters from the Washington Post, Chicago Tribune, Wall Street Journal, Associated Press, Reuters, and more.

I’ve made it my professional life’s work to help investors like you build and protect your wealth.

Why is investing in dividend-paying stocks with relatively high, yet reliable, yields so richly rewarding?

I’ve identified five key reasons ...

1. Companies that pay dividends demonstrate a commitment to shareholder-friendly practices.

Payouts are like other wealth-building actions such as stock buybacks and earnings-enhancing acquisitions, only better.

That’s because investors interpret dividend declarations as a sign of management confidence in operations, and steer more of their dollars that company’s way. The result is even-greater share-price performance.

Consider: Between 1972 and 2011, companies that either raised their dividends or announced new payouts returned 9.6% per year on average. That easily beat the 7.3% return of the S&P 500 ... and it absolutely crushed the pathetic 1.7% return of companies that didn’t pay any dividends at all.

2. Unlike the fixed coupons that bonds pay, dividends tend to grow over time along with the economy, earnings, and inflation.

S&P 500 dividends per share rose 6% on average from 1940 onward, according to one study. A separate analysis using data that goes back to 1926 produced a growth rate of 4.4% growth. But either way, you can see why investors are so enamored with dividend-paying investments.

3. Dividends are concrete.

As one report from Guinness Atkinson Funds puts it: “Profits are a matter of opinion. Dividends are a matter of fact. Dividends are paid from real earnings and in ‘hard’ dollars — they cannot be manipulated by creative accounting. A dollar paid out to the investor is just that.”

4. Dividends are much more resilient in downturns than earnings.

That’s because companies will do almost anything they can to maintain payouts even when times get tough. And on the off chance they have to reduce dividends, they tend to do so in small increments rather than big chunks.

The evidence: In the five major recessions from 1973 through 2009, S&P 500 earnings per share plunged by an average of 42%. But dividends per share only dipped 8%. In three of those recessions, dividends were reduced by 1% or less ... even as earnings tanked anywhere from 15% to 32%.

5. This works for mid-caps and small caps, too!

It’s not just the major, well-known S&P 500 dividend payers that outperform.
Between 1983 and 2016, dividend-paying small caps returned 13.3% annually — far above the 7.8% for non-paying ones. Dividend-paying mid- caps returned 13.3% — well ahead of the 10.4% for non-paying ones.

The Hidden Secret of High-Yield Investing
You May Have Never Heard ...

So, we’ve established that investing in dividend-paying stocks with relatively high, yet reliable, yields is the greatest, most-consistent way to generate significant wealth.

And we’ve established that none other than the richest man in American history understood that.

But here’s the hidden secret of high-yielding investing you may have never heard about:

You can’t just go out and buy the highest-yielding stocks in the market and hope to beat the pants off everyone else. That’s because they often UNDERPERFORM the next lower-yielding group of stocks.

In fact, three separate studies found that the investing “sweet spot” was in stocks in the 60% to 90% highest-yielding brackets. Or in other words, you don’t want to buy stocks with the absolute highest yields ... but rather the ones just below them.

Why? Because many times, the companies paying the sky-high yields can’t afford them for long!

Some of the stated yields are so high because the underlying share prices have plunged ... a hint that the dividends will soon get cut. Other times, they’re so high because the companies are paying out huge chunks of their earnings ... something they can’t maintain for long.

My goal: Zero in on stocks that offer both a high dividend yield AND a reasonable payout ratio. The payout ratio is simply a measure of how much of a company’s earnings are being paid out as dividends.

Here’s how I do it...

Start Turning Every $10,000 You Invest into $44,508

I hope I’ve convinced you about the power and relevance of the dividend paying stocks. Now, I want to talk about how I can help you put it to work in your own portfolio — and save 61% in the process!

I’ve recently launched an investment newsletter that uses the principals and practices I outlined here every single day.

I call it “Safe Money Report” and it’s designed to turbocharge the yields you’re earning, while also strictly limiting your risk.

The heart and soul of the letter is something I call my “Bedrock Income Portfolio.” It’s a model portfolio of stocks that meet five crucial criteria ...

First, they have to be among the best-rated stocks in our Weiss Ratings universe of more than 13,400 tracked equities. No “Sells,” no junk. They also need to have adequate liquidity and trading volume so you don’t get trapped in thinly traded losers.

Second, they have to pay a dividend that’s at least equal to the S&P 500 ... and as much as 4X greater than it. Safe Money Report Risk-Free',''); ?>

Third, they have to have grown that dividend by at least 10% over the past three years. We don’t want companies that are just standing still.

Fourth, they have to meet one of two dividend sustainability tests. We look at the payout ratio I mentioned earlier, as well as a separate measure based on free cash flow. That helps identify companies in that “sweet spot” — those with relatively high, but reliable, payouts.

Fifth, they have to pass two screens designed to weed out stocks with little momentum and/or excessive risk and potential volatility. There’s nothing worse than buying a stock that just sits there like a bump on a log ... or that’s at a high risk of cratering right after you add it to your holdings!

Our extensive back-testing ... covering the most recent nine years of market action ... suggests a portfolio of stocks meeting these criteria and rebalanced over time could have generated gains of just over 445%.

That compares to a 133% return for the market as a whole. Or in other words, you could have turned every $10,000 you invested into $44,508 following this system.

Safe Money Report also offers a “kicker” — a “Dynamic Income Portfolio” that’s discretionary. In this portfolio, I pick my favorite stocks and bond ETFs and funds that offer market-crushing yields — with a goal of rounding out your portfolio.

That includes everything from Real Estate Investment Trusts to Business Development Companies to Master Limited Partnerships and more.

With two decades of experience closely tracking the interest rate, bond, and equity markets, I’m confident I can help you boost the yields your investments are spinning off without taking on undue risk.

And don’t forget — I do all the work for you! Get immediate access to the full portfolio when you start a risk-free subscription to Safe Money Report.

As a subscriber to Safe Money Report, you’ll also get ...

* My Monthly Market Overview — A detailed, hard-hitting analysis of what’s driving the stock market overall, which trends are influencing dividend-paying equities in particular, how interest rate moves factor into the equation ... and more.

* My Proprietary Weiss Ratings Market Barometer — This unique tool analyzes 23 different financial, credit, and economic indicators, and produces a simple, easy-to-understand snapshot of market conditions. In other words, you’ll know at a glance whether we’re likely to see further market gains ... or whether a pullback, correction, or even bear market is coming.

* Comprehensive Reviews of Both Portfolios — Did one of your stocks just blow the doors off with earnings? Did another just boost its dividend payout? Is it time to switch from one bond ETF to another, or cut back on your overall equity allocation? You’ll never have to wonder thanks to these monthly updates.

* Complete Weiss Ratings Stock Reports on both new and existing positions — In each issue, I’ll share the complete stock reports we produce on new positions added to either portfolio. Or in months where we have less activity, I’ll publish the reports on some of your existing positions.

* Answers to Any Questions You Might Have — Every issue will feature a Q&A section, where I’ll address the pressing questions on your mind. That way you’ll never be left in the dark about the markets or your investments.

* Flash Alerts as Needed — The markets don’t trade by appointment. They can move fast, opening up new opportunities and generating significant profits at any time. So, if I think you need to bag gains, or make other adjustments in between regular issues, I’ll fire off an alert with all the details.

Safe Money Report Risk-Free',''); ?>

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Don’t miss out on this limited-time savings or the chance to triple your income with my select stocks.   

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Yours for investing profits,

Mike Larson

Senior Analyst and Editor,
Safe Money Report