High Yield

High Yield Watchlist

If you need immediate income over growth this is an excellent watchlist to find companies to build your income portfolio.

The stocks and ETFs listed above represent high quality companies with a yield above 3% and moderate dividend growth potential such that the combination of these two metrics (current yield and dividend growth rate) would provide a yield-on-cost of 10% in 12.5 years or less. The Watchlist is sorted by the lowest number of ‘Years to 10% Yield.’ Also, companies listed must have a ‘Safe’ to ‘Very Safe’ dividend safety score rating (61 to 99) from Simply Safe Dividends, a Quality Score of 15 or higher, a ‘Standard’ or better Morningstar Capital Allocation rating, and a minimum of 5 consecutive years of dividend increases as listed below:

• 3%+ Dividend Yield (some companies might dip below 3% as their share price rises)
• 5+ Years Dividend Increases
• 15+ Quality Score
• 61+ Simply Safe Dividend Score (SSD)
• Less than 12.5 ‘Years to 10% Yield’ (based on the current yield and assumption of maintaining the historical dividend growth rate)
• Morningstar Capital Allocation rating of ‘Standard’ or better (no Poor rating)

*Important Note: Naturally many high income companies are going to be comprised of MLPs and REITs that do not meet IRS requirements to qualify for the lower tax treatment. These ‘non-qualified’ companies are listed in the Tax column as (NQ = Non-Qualified, K1 = K-1 Partnership, or C = Canadian) so they are best suited to be held in tax-advantaged accounts such as IRA’s and 401k’s. (Check with your tax professional).

Our fair value estimate is the average of two valuation methods: 1.) Morningstar estimated fair value, and 2.) the 5 year average dividend yield method. For more information on the columns listed above see How to use the Quality Screeners.