Top 10 Stocks With High Dividend Yield (Above 7%)






































Stock Market Cap Price Yield Profile Pros Cons
Genesis Lease Limited (GLS) 652M 18.08 10.52 Acquires and leases commercial jet aircrafts. The current portfolio consists of 52 airplanes under long-term contracts (average contract length 5.7 years). Modern fleet with 6 years average age. The addressable market is huge and growing at a healthy pace - there is a total of 18500 commercial jet aircraft in the whole world and that number is expected to double in the next 20 years. The company is expected to use debt as the primary source of capital to fund the airline purchases and so credit tightening has a direct impact on its business.
Cheniere Energy Partners (CQP) 2.57B 15.90 10.69 Developing Liquefied Natural Gas (LNG) terminal in the Gulf Coast (Sabine Pass Channel). Will own and operate it once the project is completed. Spin off from Cheniere Energy (LNG) which is developing other terminals in the area. LNG rose 60 times in the 2003-2004 timeframe. Three 20-year leases (pay independent of use contracts) are already signed and the terminal is expected to be operational in the 3rd quarter of 2008 making the 9% dividend seem sustainable at a minimum. It is the biggest such terminal in North America. The holding should provide stable income, but growth will be hard to come by.
Golar LNG Limited (GLNG) 1.43B 22.27 8.98 Owns and operates 12 LNG vessels. Six are under long-term charter contracts, three under shorter-term contracts and the remaining three are under five year flexible contracts with Shell. John Fredrikson, a billionaire has big stake in the company. Earnings should be stable given the long-term contracts and the absence of spot market for LNG vessel charters. Valuation is high.
Medical Properties Trust (MPW) 527M 10.47 10.32 Invests in healthcare facilities and provides mortgages on these facilities. Senior Network Housing (SNH) is an alternative investment in the mid-cap area. Confusion in differentiating these loans from sub prime mortgages also contributes to the share price being down 20%. The valuation is rich at roughly 20 times cash flow.
Allied Capital Corporation (ALD)3.42B22.1511.74 One of the oldest Business Development Corporations (BDC). Its business practices, valuation model, and fraud allegations in the Business Loan Express (BLX) portfolio company has caused the shares to be in an extended slump, making the valuation attractive. Allied’s portfolio of companies invested in is well diversified by industry but not globally. This conservative stance limits returns.
Frontline Limited (FRO)3.52B47.1012.74 Owns and operates oil tankers having one of the largest fleets in the world. The company primarily uses the spot market and so can be viewed as a direct proxy for tanker rates. At the helm is the Norwegian billionaire shipping tycoon John Fredriksen. Given the exposure to the spot market and the volatility in that index, Frontline qualifies to be a good trading stock. The projections call for a continued slump in charter rates for another year and that affects Frontline’s bottom line.
Gladstone Capital Corporation (GLAD) 342M 19.39 8.66 Provides debt financing to small and mid sized private United States businesses. It is a lesser known Business Development Company (BDC) when pitted against Allied Capital (ALD) and American Capital Strategies (ACAS) Share price has declined to a very attractive level. Small and mid sized US businesses are more vulnerable to a downturn in the economy and that could lead to write downs on assets. Likewise, the real estate side of the business is exposed to a slowdown in the commercial real estate sector.
Enbridge Energy Partners L.P. (EEP) 4.56B 50.59 7.51 Owns and operates crude oil and natural gas pipelines. The natural gas transportation and mid-stream assets are in the mid-continent and the gulf coast regions. The crude oil and liquid petroleum pipeline assets are primarily through the ownership of the US portion of the world’s longest such pipeline continuing through western Canada to refining centers in the Midwest and Ontario, Canada. The company’s assets are very valuable and should continue to generate steady cash flow. The recent fire is an indication of the inherent risks with its business.
Cedar Fair L.P. (FUN) 1.17B21.648.78 Owns and operates amusement parks. The more popular ones are Cedar Point and Knott’s Berry Farm. The chance of a rebound in attendance in its acquired properties and corresponding growth makes it an attractive opportunity. The company has been an under performer for the past 10 years.
Ship Finance Limited (SFL) 2.06B 28.30 7.77 Owns and leases ships to shipping companies. The business plan consist of raising capital, buying ships, leasing to shipping companies under long-term contracts that has a fixed component that lock in a daily rate and a variable component that gets 20% of the rate above the fixed component, and generating cash flow to support dividends and reinvestments in the business. The business is low risk considering the fixed daily rate in its long-term contracts. The 20% cut of the profit above the fixed component makes it a business that tracks shipping rates but with a floor built-in. Growing profit per share is directly dependent on an increasing pattern in the shipping rates. Shipping rates are cyclical making the business itself cyclical in nature. Diversifying the ship fleet could mitigate the cyclical effects in the future as the rates vary across the commodity being transported.

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