Bigger isn't always better, and just because a stock has a high dividend yield -- annual dividend divided by share price -- that doesn't necessarily mean that it is a better investment than one with a lower yield.
For example, the dividend yield could increase if a stock price drops, which could be a red flag for financial struggles in the underlying business.
A company's payout ratio, which is the relationship between what it pays to shareholders and how much profit it generates, is another key metric. Too high a payout ratio could limit a company's ability to buy back shares, build the underlying operation or raise dividends.
A healthy dividend is one that will grow over time and provide a solid stream of income for the investor.
Here are five picks with dividend yields exceeding 5%. All the stocks on the below not only carry high yields but also have price appreciation potential, so investors could get a double benefit from being selective and thinking like a value stock picker when looking at these names.
These are the results....
Waddell & Reed Finance -- Yield: 8.54%
Waddell & Reed Finance (NYSE:WDR) employs 1,691 people, generates revenue of $1,516.63 million and has a net income of $245.54 million. The current market capitalization stands at $1.67 billion.Waddell & Reed Finance’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $431.90 million. The EBITDA margin is 28.48% (the operating margin is 27.42% and the net profit margin 16.19%).
Financials: The total debt represents 12.18% of Waddell & Reed Finance assets and the total debt in relation to the equity amounts to 22.38%. Due to the financial situation, a return on equity of 30.08% was realized by Waddell & Reed Finance.
Twelve trailing months earnings per share reached a value of $2.27. Last fiscal year, Waddell & Reed Finance paid $1.75 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.10, the P/S ratio is 1.18 and the P/B ratio is finally 2.11. The dividend yield amounts to 8.54%.
Stock Charts:
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| Long-Term Stock Price Chart of Waddell & Reed Finance (WDR) |
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| Long-Term Dividend Payment History of Waddell & Reed Finance (WDR) |
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| Long-Term Dividend Yield History of Waddell & Reed Finance (WDR) |
Lukoil -- Yield: 6.86%
Lukoil (OTCMKTS:LUKOY) employs 109,600 people, generates revenue of $92,036.20 million and has a net income of $4,686.54 million. The current market capitalization stands at $47.02 billion.Lukoil’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,098.00 million. The EBITDA margin is 14.23% (the operating margin is 4.87% and the net profit margin 5.09%).
Financials: The total debt represents 18.14% of Lukoil assets and the total debt in relation to the equity amounts to 28.26%. Due to the financial situation, a return on equity of 9.30% was realized by Lukoil.
Twelve trailing months earnings per share reached a value of $7.21. Last fiscal year, Lukoil paid $ in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.64, the P/S ratio is 0.49 and the P/B ratio is finally 0.74. The dividend yield amounts to 6.86%.
Stock Charts:
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| Long-Term Stock Price Chart of Lukoil (LUKOY) |
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| Long-Term Dividend Payment History of Lukoil (LUKOY) |
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| Long-Term Dividend Yield History of Lukoil (LUKOY) |
GameStop -- Yield: 5.69%
GameStop (NYSE:GME) employs 20,000 people, generates revenue of $9,363.80 million and has a net income of $402.80 million. The current market capitalization stands at $2.70 billion.GameStop’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $812.60 million. The EBITDA margin is 8.68% (the operating margin is 6.92% and the net profit margin 4.30%).
Financials: The total debt represents 7.99% of GameStop assets and the total debt in relation to the equity amounts to 16.62%. Due to the financial situation, a return on equity of 19.42% was realized by GameStop.
Twelve trailing months earnings per share reached a value of $3.74. Last fiscal year, GameStop paid $1.44 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.06, the P/S ratio is 0.28 and the P/B ratio is finally 1.29. The dividend yield amounts to 5.69%.
Stock Charts:
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| Long-Term Stock Price Chart of GameStop (GME) |
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| Long-Term Dividend Payment History of GameStop (GME) |
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| Long-Term Dividend Yield History of GameStop (GME) |
GNC Holdings -- Yield: 5.56%
GNC Holdings (NYSE:GNC) employs 6,400 people, generates revenue of $2,639.21 million and has a net income of $219.30 million. The current market capitalization stands at $944.23 million.GNC Holdings’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $478.68 million. The EBITDA margin is 18.14% (the operating margin is 14.89% and the net profit margin 8.31%).
Financials: The total debt represents 56.73% of GNC Holdings assets and the total debt in relation to the equity amounts to 309.28%. Due to the financial situation, a return on equity of 35.82% was realized by GNC Holdings.
Twelve trailing months earnings per share reached a value of $2.65. Last fiscal year, GNC Holdings paid $0.72 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 5.25, the P/S ratio is 0.37 and the P/B ratio is finally 2.34. The dividend yield amounts to 5.56%.
Stock Charts:
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| Long-Term Stock Price Chart of GNC Holdings (GNC) |
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| Long-Term Dividend Payment History of GNC Holdings (GNC) |
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| Long-Term Dividend Yield History of GNC Holdings (GNC) |
Allianz -- Yield: 5.01%
Allianz (OTCMKTS:AZSEY) employs 142,697 people, generates revenue of $101,119.30 million and has a net income of $7,377.57 million. The current market capitalization stands at $74.55 billion.Allianz’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,625.32 million. The EBITDA margin is 13.47% (the operating margin is 10.37% and the net profit margin 7.30%).
Financials: The total debt represents 3.79% of Allianz assets and the total debt in relation to the equity amounts to 50.89%. Due to the financial situation, a return on equity of 10.68% was realized by Allianz.
Twelve trailing months earnings per share reached a value of $1.50. Last fiscal year, Allianz paid $0.77 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.89, the P/S ratio is 0.75 and the P/B ratio is finally 1.13. The dividend yield amounts to 5.01%.
Stock Charts:
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| Long-Term Stock Price Chart of Allianz (AZSEY) |
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| Long-Term Dividend Payment History of Allianz (AZSEY) |
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| Long-Term Dividend Yield History of Allianz (AZSEY) |
