However, analysts are forecasting substantially higher profits in 2021, which should support dividends if Sunoco meets expectations.Īntero Midstream Partners owns and operates pipelines and other physical assets supporting natural gas extraction in Marcellus and Utica Shales. The company's per-share quarterly dividend has remained stable at $0.8255, an 11.1% yield. The payout ratio has consistently exceeded 100% for several years, which could be a warning sign.
Sunoco refines and sells petroleum and chemical products, and it operates a well-known auto fuel station brand. It has an exceptionally high 18.04% trailing dividend yield after maintaining its quarterly distribution throughout 2020. A 138% dividend payout ratio is probably unsustainable, but Shell Midstream has enough liquidity to buy some time waiting for an oil price recovery. Shell Midstream Partners is a spinoff from Shell that owns and operates midstream assets, such as pipelines, that transport oil and gas from the location of extraction to destinations such as refineries. Ultimately, the sustainability of these dividends will rely on the timing of a recovery in oil prices.
Activity and revenue have dropped significantly among companies that produce, transport, service, and sell oil and gas products and services, threatening the stability of stocks across the sector. Second, their shares fluctuate in price on exchanges just like stocks, and the market has priced stocks across the entire energy sector at a discount following the rapid decline in oil prices earlier this year. First, the required distribution of earnings naturally leads to high dividends. Several MLPs are among the highest dividend stocks right now for two main reasons. MLPs are contractually obligated to distribute large percentages of their earnings to shareholders, which are called limited partners. These companies avoid federal taxation at the corporate level by generating most of their revenues from specific activities related to the energy industry. Many of the highest dividend yields available on stock exchanges are actually companies organized as master limited partnerships (MLPs). 21 stock prices).ĭata sources: Morningstar,, NYU Stern,. With that in mind, here are 10 of the highest-yielding dividend stocks on U.S.
If dividends are too high relative to profits, and a company doesn't have enough liquid assets to keep paying the current dividend for several quarters, it's likely that the yield will fall back to earth. Financial health metrics such as the interest coverage ratio, current ratio, and debt-to-equity ratio indicate a company's ability to sustain operations and distributions to shareholders through temporary disruptions such as recessions, pandemics, and energy crises.
Investors analyzing high-yield stocks should assess the likelihood that the current dividend is sustainable using the dividend payout ratio, as well as several financial health ratios. A dividend yield might reach high levels because the market is pricing the stock with the assumption that the dividend per share will decline in the future. Income investors generally want to maximize their dividend yield, but unfortunately, a winning investment strategy is not as simple as running a screener and buying shares of the stocks with the highest yields at a given moment.
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