Question:
I am considering investing in some income stocks, because bond yields are so low. I have liquidity for about seven years, and plenty of exposure to the overall market. Can you suggest some income stocks to get a high yield?
Answer:
At Henssler Financial, we have two income-producing portfolios, the High Yield Portfolio, which focuses solely on the dividend paid, and the Dividend Growth Portfolio, which focuses not only on the dividend but the growth of principal.
Most dividend paying stocks will be in the utility sector. Southern Company (NYSE: SO) is one of our core dividend holdings, paying 4.8%. In the telecommunications sector, CenturyLink, Inc. (NYSE: CTL) yields about 6.5%, and Verizon Communications (NYSE: VZ) yields 5.3%.
While utilities and telecom stocks cover their yield well, we feel there are more growth opportunities in the industrial sector; however, industrials do not pay as high of a dividend. Waste Management, Inc. (NYSE: WM) pays 3.6% and General Electric (NYSE: GE) pays 2.7%. Both have solid growth rates of 7% and 5.5%, respectively. However, General Electric is not included in the income portfolios.
As for high dividends yields, tobacco industry giant Altria Group, Inc. (NYSE: MO) pays 6.5%, and French oil giant Total S.A. (NYSE: TOT) pays 5%.
While dividend-yielding stocks can produce income in low-interest rate environments, there is a potential for the principal to change. Therefore, we suggest that they are not as safe as Treasury or municipal bonds.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
