The 25 Highest-Yielding Stocks

Dividend investing is popular again. Investors have taken to heart Jeremy Siegel's studies, which show that higher-yielding stocks tend to offer greater returns over time than low- or no-yield stocks.

The highest dividend yields can be very tantalizing. As long as a stock yielding 15% doesn't lose value, you'll make 15% in one year! In more cases than not, however, an astronomical yield is a bad sign for a stock. Since dividend yields and stock prices move in opposite directions, a high yield usually means that investors have begun to worry about the business and driven down its stock price.

However, certain types of companies such as REITs have to pay out most of their income as dividends, so their yields will be higher than "normal." Dividends are not guaranteed; you need to make sure that a business is generating enough cash to pay its dividend, or your investment could be disastrous.

Three months ago, I ran a screen for the highest-yielding stocks, and it got such a good reception that I'm doing it again this quarter. The only limitation I've set this time is that the dividend stocks must have a market cap greater than $500 million.

Here are the top 25 highest-yielding stocks the screen produced:

Company

Market Cap (Millions)

Dividend Yield

1

Invesco Mortgage Capital (NYS: IVR)

$2,035

22%

2

American Capital Agency (NAS: AGNC)

$5,089

19.5%

3

ARMOUR Residential REIT (NYS: ARR)

$574

19.3%

4

Cypress Sharpridge Investments (NYS: CYS)

$1,103

17.9%

5

Chimera Investment (NYS: CIM)

$3,112

16.8%

6

Two Harbors Investment (NYS: TWO)

$1,345

16.7%

7

SandRidge Mississippian Trust I (NYS: SDT)

$729

16.5%

8

Hatteras Financial (NYS: HTS)

$2,076

14.5%

9

Capstead Mortgage (NYS: CMO)

$1,123

14.5%

10

Annaly Capital Management (NYS: NLY)

$17,569

14.4%

11

Prospect Capital (NAS: PSEC)

$960

14%

12

National Beverage (NAS: FIZZ)

$763

14%

13

Anworth Mortgage Asset (NYS: ANH)

$950

13.8%

14

MFA Financial (NYS: MFA)

$2,668

13.3%

15

Cellcom Israel (NYS: CEL)

$2,240

11.8%

16

BlackRock Kelso Capital (NAS: BKCC)

$642

11.7%

17

Niska Gas Storage Partners LLC (NYS: NKA)

$866

11.1%

18

Crexus Investment (NYS: CXS)

$716

10.6%

19

Compass Diversified (NYS: CODI)

$641

10.5%

20

Solar Capital (NAS: SLRC)

$844

10.4%

21

BGC Partners (NAS: BGCP)

$819

10.2%

22

Getty Realty (NYS: GTY)

$635

10.2%

23

Frontier Communications (NYS: FTR)

$7,454

10%

24

PDL BioPharma (NAS: PDLI)

$854

9.98%

25

CommonWealth REIT (NYS: CWH)

$1,720

9.78%

Source: Capital IQ, a division of Standard & Poor's.

These stocks are a good place to start your research, but they're not formal recommendations. Remember, their seemingly irresistible yields could be ticking time bombs, so do your own due diligence. Also, make sure you diversify your picks across various sectors. As investors relearn every decade or so, you never want to put all your eggs in one basket -- no matter how tempting the dividends are.

For a basket of some high-yield some dividend opportunities, click here to get The Motley Fool's five-page free report: "13 High-Yielding Stocks to Buy Today."

At the time thisarticle was published Dan Dzombak'smusings and articles he finds interesting can be found on his Twitter account:@DanDzombak. He owns shares of Annaly Capital Management and Frontier Communications, but he holds no other position in any company mentioned.The Motley Fool owns shares of Chimera Investment and Annaly Capital Management.Motley Fool newsletter serviceshave recommended buying shares of Cellcom Israel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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