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5 Attractive Dividend Stocks as Yields Touch Historical Lows

Zacks Equity Research

Investors’ money flows from stocks to bonds whenever equity markets are in turmoil. The reason for this is disturbances in the global economy that expose stock markets to heightened risk and make investors nervous. They then immediately start transferring money to safe haven assets including Treasury bonds.

Recently, Brexit made stock markets volatile, spurring demand for Treasury bonds and pushing yields to historical lows.

However, income-generating investors find low Treasury yields extremely disappointing. Rather, investing in dividend paying stocks is a lucrative option for them.

Record Lows for Treasury Yields

Just after British voters opted to leave the EU, market pundits warned that the stunning incident will negatively impact the global economy. Fed Chair Janet Yellen agreed that the move would “usher in a period of uncertainty” and fuel volatility.

Now, the Brexit aftermath has already unnerved the stock market and led to skyrocketing demand for Treasury bonds. The yields for the bonds, on the other hand, have plunged with both the 30-year Treasury bond and 10-year Treasury bond touching historic lows of 2.15% and 1.357%, respectively, on Tuesday.

Low Yields Make Dividend Stocks Juicy

Nonetheless, the decline in Treasury yields has made companies with comparatively higher and stable dividend yields more attractive. This is because income-focused investors will now turn toward dividend paying stocks that provide the regular cash they are seeking.  

In this article, we will focus on five such dividend-paying stocks that have a Zacks Rank #1 (Strong Buy) and a dividend yield of over 4%. The favorable Zacks Rank should help these stocks to continue gaining this year. This thesis is backed by the fact that companies having a Zacks Rank #1 significantly outperform the broader U.S. equity market over the next one to three months.

Rose Rock Midstream LP RRMS: Headquartered in Tulsa, OK, the partnership is the owner and operator of wide range of energy properties involved in midstream operations. In detail, Rose Rock Midstream involves in activities like gathering, transporting and storing of crude.

The partnership offers a whopping dividend yield of more than 10%. Rose Rock Midstream’s 5-year historical dividend growth rate is almost 33%.

NGL Energy Partners LP NGL: Tulsa, OK-based NGL Energy is involved in businesses like crude oil logistics, water solutions, distributing natural gas liquids to retailers along with selling propane and distillates to the end users.

The partnership offers a promising dividend yield of 8.2%. NGL Energy’s 5-year historical dividend growth rate is 27.4%.

World Point Terminals LP WPT: The partnership’s prime business involves operating, developing and acquiring properties used for storage of both light and heavy refined products and crude oil in the U.S.  

The partnership offers an encouraging dividend yield of 7.7%. World Point Terminals’ 5-year historical dividend growth rate is 12.6%.

Altisource Residential Corporation RESI: Christiansted, Virgin Islands-based Altisource Residential owns and manages single-family rental assets in the U.S. The company offers a solid dividend yield of 7.1%. The company’s 5-year historical dividend growth rate is 9.4%.

Sotherly Hotels Inc. SOHO: Williamsburg, VA-based Sotherly Hotels is basically an equity real estate investment trust that keeps on investing in real estate markets of the U.S. Sotherly Hotels offers a promising dividend yield of 6.4%. The company’s 5-year historical dividend growth rate is 42.5%.

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ROSE ROCK MIDST (RRMS): Free Stock Analysis Report
 
NGL ENERGY PART (NGL): Free Stock Analysis Report
 
SOTHERLY HOTELS (SOHO): Free Stock Analysis Report
 
WORLD POINT TER (WPT): Free Stock Analysis Report
 
ALTISOURCE RESI (RESI): Free Stock Analysis Report
 
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