5 companies with a dividend yield above 10%
A yield above 10% is not a reward, but compensation for risk. For each of today's five companies, that risk is different, and for two of them the yield figure itself is misleading. The difference between real income and a statistical illusion determines whether an investor earns money or just gradually gets back their own capital.
Key points
Five stocks, five completely different ways an investor can obtain double-digit income. Lending business, commodities, financial services, real estate, and telecommunications. Each model reacts to a different risk.
One of the analyzed stocks trades at roughly 40% below book value. Such a steep discount may represent an opportunity, but at the same time it shows how much distrust the market currently has toward the company.
At another company, the dividend yield reaches nearly 13%, even though the payout has remained unchanged for several years. The key question is whether the new growth plan can halt the pressure on margins and profitability.
A high dividend does not have to be fixed. For one name, the payout changes every quarter based on commodity prices, investments, and the amount of cash left in the company.
The biggest differences among these stocks are not in the dividend percentage itself, but in what happens below the surface. Debt, credit quality, margins, share buybacks, or the ability to generate cash can determine what the payout will look like a year from now.
In our analysis, we do not just look at the yield number. For all five names, we break down the actual future dividend yield, dividend coverage by earnings and cash flow, payout policy, debt, valuation, and the specific risks for which the market compensates investors with a high yield. The analysis includes clear tables, charts, a comparison of trailing and forward yields, and a detailed review of each company's results. We also show cases where a figure above 10% looks attractive, but the investor would receive a completely different amount over the next twelve months.
A dividend yield above 10% appears in the US market only among a narrow group of names, and it is almost never a coincidence. The market tolerates such a yield either because it expects a payout cut, or because the company's business generates cash that it has nowhere else to meaningfully allocate. Distinguishing between these two situations is far more important for an investor than the dividend amount itself.
The difference between trailing and forward yield is crucial. Screeners typically work with dividends paid over the last twelve months, i.e., what the company has already paid. If there has been a payout reduction, a change in dividend policy, or a one-time special distribution in the interim, the displayed yield can be completely disconnected from what the shareholder will actually receive next year. This exact problem affects no fewer than two companies from today's five, and very significantly so.