4 High Yield Dividend Stocks for 2024
Dividend stocks are shares of companies which distribute a portion of its earnings to shareholders, usually in the form of cash. These type of stocks are sometimes overlooked by less experienced investors, but holding stocks that pay dividends in your portfolio can be rewarding as a source of additional income.
So, what are some of the highest yielding dividend stocks in 2024? In this article, we will highlight 4 high yield dividend stocks and demonstrate how you can start investing in high dividend yield stocks.
Table of Contents
What Is Dividend Yield?
When it comes to picking dividend stocks, one of the most important indicators to consider is its dividend yield. But what is dividend yield? And how is dividend yield calculated?
A dividend yield expresses a stock’s dividend payout as a percentage of its current share price. The formula for calculating the dividend yield is as follows:
So, for example, if a company pays its shareholders a cash dividend of $0.50 per share and the current share price is $20, its dividend yield would equal 2.5%. This means that for every $100 you invested in this stock, at its current dividend yield, you could expect an annual dividend payment of $2.50.
High Yield Dividend Stocks to Consider
In the following sections, we will examine 4 high yield dividend stocks to consider in 2024.
For the purposes of this article we will focus on high dividend yield stocks; however, it is important to understand that when investing for income, the dividend yield is just one of many factors to consider.
A common, and natural, misconception is that the higher the yield the better. But this is not necessarily the case. A company may have a high dividend yield in the present, but is it sustainable going forward? How is it generating the income to make this dividend payment, and will it be able to continue to rely on this income in the future? Is there a high risk that you will lose your invested capital?
In other words, make sure you look beyond high dividend paying stocks and dig deeper into the company before risking your hard earned cash.
Kinder Morgan
US company Kinder Morgan operates in the energy sector, specialising in owning and controlling oil and gas pipelines. Its reliable business model combined with its consistent and generous history of dividend payments earn it a place on our list of high yield dividend stocks.
Because of Kinder Morgan’s business practice of providing long-term fee-based contracts to its clients, unlike many which operate in this sector, its profitability is not necessarily tied to oil and gas prices.
This means that last year’s surge in energy prices did not translate into the record profits many other oil and gas companies enjoyed. However, naturally, this cuts both ways, meaning that Kinder Morgan has not been hugely affected by the fact that oil and gas prices have both been trending downwards over the last year.
As the future outlook for energy prices remains less than certain, the long-term contracts which Kinder Morgan operate mean that any downside to their business from a further decline in oil and gas prices would be limited.
When it comes to picking consistent high dividend yielding stocks, it is exactly this kind of reliable, predictable, and perhaps even “boring”, stream of income which makes a company attractive.
Altria Group
For investors who strictly follow ESG principles when investing our next high dividend yield stock may not appeal. However, it happens to be a fact that tobacco companies are some of the most reliable high dividend paying stocks available, with many having a long history of providing great shareholder value.
Altria Group is one such tobacco stock, it’s one of the largest tobacco companies in the US and owner of the famous Marlboro brand.
Although the widely publicised negative health effects of smoking have led to a decline in demand over the last several decades, Altria has been somewhat able to offset this through price increases, which ensure profits and cash flows remain high.
As for its dividend, Altria has an incredible record of dividend payments, having increased its payout every year for more than 50 years, earning it the coveted title of dividend king.
Verizon Communications
Sometimes, a high yield stock can signal alarm bells to experienced investors. Can the company sustain such a high dividend yield? In the case of US telecommunications giant Verizon, the evidence suggests that it can.
Unfortunately, for existing shareholders, the reason behind Verizon’s high dividend yield is mainly its poor performance in the stock market recently, which has seen share price drop more than 30% since the beginning of 2022. But does this slump provide new investors with an opportunity to pick up a reliable high dividend yield stock?
Despite a poor performance in the stock market, Verizon’s fundamentals appeared to remain relatively robust. Whilst total operating revenue increased 2.4% in 2022, an increase in operating expenses led to net income dropping 3.8% year on year.
Nevertheless, this reported net income of $21.7 billion provided more than 2 times cover for the company’s total dividend payments of $10.8 billion, suggesting that Verizon’s dividend payout should remain safe for the time being.
Legal and General
On the other side of the Atlantic, Legal and General is one of the FTSE 100’s highest dividend yield stocks. Its impressive yield of 8.46% is more than double that of the wider FTSE 100.
Legal & General (L&G) is an insurance and asset management company based in the UK, most well-known for its insurance and pension services, and has a solid record of increasing its annual dividend, something it has placed an emphasis on in recent years.
Since the market crash in 2008, L&G has increased its dividend payment every year, with the exception of 2020, when it was held at the same level as 2019 due to the downturn caused by the pandemic.
Despite strong dividend growth, share price has not had the best time in recent years. Not accounting for dividend payments, the L&G share price has fallen around 18% over the last five years.
However, for many, the dividend is the main draw here. Besides, we shouldn’t ignore the fact that operating conditions have not been ideal the last couple of years. Nevertheless, despite a challenging backdrop in 2022, L&G performed relatively well. Operating profit and Earnings per Share both rose 12%, and dividends subsequently received a 5% bump.
How to Invest in High Yield Dividend Stocks
With an Invest.MT5 account from Admiral Markets, you can buy shares in all the high yield dividend stocks looked at in this article and collect any future dividend payments. Follow these steps to start investing in high dividend yield stocks:
- Open an Invest.MT5 account and log in to the Dashboard
- Find your account details and click ‘Invest’ to open the web-based Admiral Markets Platform
- Search for the high yield stock you want to invest in and open the instrument page
- Enter the number of high yield shares you want to purchase and click ‘Buy’ to send your order to the market!
Investing with Admiral Markets
With an Invest.MT5 account from Admiral Markets, you can buy shares in over 4,500 companies and more than 200 Exchange-Traded Funds (ETFs). Click the banner below to register for an account today:
Investing in High Dividend Yield Stocks - FAQ
How to Calculate Dividend Yield?
A stock’s dividend yield is calculated by dividing the annual dividend per share by the current share price and multiplying the answer by 100.
What Does Dividend Yield Show?
A dividend yield shows the percentage of a company’s share price that it distributes in dividends.
What Is a High Dividend Yield?
What constitutes a “high” dividend yield will vary from investor to investor. However, investors will often compare a stock’s dividend yield to the yields of benchmark indices, such as the S&P 500 or the FTSE 100, and also to base interest rates for reference.
Why Is Dividend Yield Important?
For investors looking to generate income through their investments, a dividend yield shows how much they can expect to earn in dividends based on historic distributions in an easily understandable manner.
What Is Forward Dividend Yield?
A forward dividend yield estimates a company’s future dividend yield by using projected future dividend payments in the calculation.
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
