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9 High-Yield Stocks With Strong Buy Rating

High yielding dividend paying stocks with strongest buy rating originally published at "long-term-investments.blogspot.com". I'm often asked if I would recommend to buy high-yielding stocks. I answer them that it makes sense to buy stocks with a yield over five percent but don’t expect that they will pay the dividend to the end of your lifetime and don’t expect that they will hike their payments each year or with a higher growth rate.

I personally bought several high yielding stocks around the world and nearly each investment was a disaster. Sure I also made some profits with stocks from the tobacco industry but they were the only investment ideas that worked for me. If I draw a line and make a calculation about my High-Yield activities, it would result in a very bad performance. That is my personal experience with the investment category.

Stocks with a higher yield are risky but it makes sense to look for them. Today I like to discover the most recommended High-Yields with a market capitalization over USD 300 million. Nine companies with a yield over 5 percent have a strong buy rating.

Here are the 3 highest yielding results:
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Arlington Asset Investment (NYSE:AI) has a market capitalization of $344.01 million. The company employs 11 people, generates revenue of $64.15 million and has a net income of $191.83 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $41.79 million. The EBITDA margin is 65.14 percent (the operating margin is 65.07 percent and the net profit margin 299.01 percent).


Financial Analysis: The total debt represents 76.61 percent of the company’s assets and the total debt in relation to the equity amounts to 341.61 percent. Due to the financial situation, a return on equity of 59.16 percent was realized. Twelve trailing months earnings per share reached a value of $15.11. Last fiscal year, the company paid $3.50 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 1.74, the P/S ratio is 6.77 and the P/B ratio is finally 0.74. The dividend yield amounts to 13.34 percent and the beta ratio has a value of 1.96.

Long-Term Stock Price Chart Of Arlington Asset Investment (AI)
Long-Term Dividend Payment History of Arlington Asset Investment (AI)
Long-Term Dividend Yield History of Arlington Asset Investment (AI)

Legacy Reserves (NASDAQ:LGCY) has a market capitalization of $1.61 billion. The company employs 206 people, generates revenue of $346.46 million and has a net income of $68.64 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $153.64 million. The EBITDA margin is 44.34 percent (the operating margin is 14.86 percent and the net profit margin 19.81 percent).

Financial Analysis: The total debt represents 45.91 percent of the company’s assets and the total debt in relation to the equity amounts to 115.75 percent. Due to the financial situation, a return on equity of 11.85 percent was realized. Twelve trailing months earnings per share reached a value of $1.43. Last fiscal year, the company paid $2.23 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.60, the P/S ratio is 4.65 and the P/B ratio is finally 2.39. The dividend yield amounts to 8.20 percent and the beta ratio has a value of 1.08.

Long-Term Stock Price Chart Of Legacy Reserves (LGCY)
Long-Term Dividend Payment History of Legacy Reserves (LGCY)
Long-Term Dividend Yield History of Legacy Reserves (LGCY)

Starwood Property Trust (NYSE:STWD) has a market capitalization of $3.71 billion. The company generates revenue of $306.98 million and has a net income of $203.68 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $227.18 million. The EBITDA margin is 74.01 percent (the operating margin is 58.66 percent and the net profit margin 66.35 percent).

Financial Analysis: The total debt represents 32.23 percent of the company’s assets and the total debt in relation to the equity amounts to 51.25 percent. Due to the financial situation, a return on equity of 8.91 percent was realized. Twelve trailing months earnings per share reached a value of $1.81. Last fiscal year, the company paid $1.86 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.11, the P/S ratio is 14.48 and the P/B ratio is finally 1.37. The dividend yield amounts to 6.42 percent and the beta ratio has a value of 0.70.

Long-Term Stock Price Chart Of Starwood Property Trust (STWD)
Long-Term Dividend Payment History of Starwood Property Trust (STWD)
Long-Term Dividend Yield History of Starwood Property Trust (STWD)


Take a closer look at the full list of High-Yield stocks with strong buy rating. The average P/E ratio amounts to 20.92 and forward P/E ratio is 23.19. The dividend yield has a value of 6.75 percent. Price to book ratio is 1.80 and price to sales ratio 4.12. The operating margin amounts to 19.21 percent and the beta ratio is 1.61. Stocks from the list have an average debt to equity ratio of 1.65.

Here is the full table with some fundamentals (TTM):

High-Yield Stocks With Strongest Buy Rating (Click to enlarge)

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Related stock ticker symbols:
AI, LGCY, STWD, NGL, RAS, ARCP, IEP, MIC, CIG

Selected Articles:


*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.