Investors are starting to be less concerned that high-yield dividend stocks could get crushed by a rising interest rate environment. Chairman Bernanke and the Federal Reserve have been getting more vocal that quantitative easing and bond buying is not ending anywhere as fast nor to the extent that investors feared back in June. 24/7 Wall St. loves tracking dividends for investors, and we wanted to show five stocks that you might have heard of but which you might not guess would be incredibly high-yield dividend payers.
By now you know that utilities, tobacco companies, select financial services, consumer product giants, real estate investment trusts (REITs), master limited partnerships (MLPs) and established telecom giants can all generate dividend yields in excess of 4% or 5%. We wanted to show you five companies that are less frequently tracked that may offer you considerable dividend upside and whose businesses seem to have sound models.
Of these five companies, only one is a REIT. One is in a smack down of a media sector, and one serves the collectibles and hobby sector. All are profitable companies with market capitalizations of more than $100 million but less than $2 billion, and they all trade at least 50,000 shares per average trading day (most are much higher). We also only considered companies with balance sheets that could continue to support dividend payments of at least 4%, with some dividends being much higher.
Collectors Universe Inc. (CLCT) is best known for its PSA grading and authentication services of trading cards and sports memorabilia. It has two real competitors, and it has withstood the test of market criticism and scandals around sports memorabilia. The PSA owner trades at $14.90, against a 52-week trading range of $9.25 to $15.22. Collectors Universe has a $127 million market cap, and its $0.325 per share dividend generates an almost shocking high-yield of more than 8.5%.
Government Properties Income Trust (GOV) is the sole REIT we are covering here. While many REITs do rent properties to the government, this one has a business model that almost exclusively rents to federal, state and local government and agency clients around the nation. The company recently raised new acquisition capital, and we think that it is highly overlooked by investors. It is at $26.63, and its 52-week range is $20.69 to $27.34, with about 500,000 shares trading each day. Its market cap is just over $1.4 billion. You can make well under 3% by buying a 10-year Treasury note, or you can earn a dividend yield of about 6.5% here by playing armchair landlord to the government office space.
Medallion Financial Corp. (TAXI) is a private lender and specialty finance player, and its key focus is on lending money to taxi drivers and companies that own taxi medallions in what are regulated city taxi markets around the United States. It is at $14.77, and its 52-week trading range is $10.75 to $16.00. Its market cap is about $312 million, and it trades about 100,000 shares per day. Medallion's management team has been steadily interested in raising its dividend, and that dividend is now listed as about 5.9%.
Orchids Paper Products Co. (TIS) is a specialty paper products company that has grown and flown under the radar, serving the at-home market for bathroom tissue, paper towels and paper napkins. Its shares have been rising, and it has raised its dividend to pay out most of its income to shareholders. The stock just hit a new high of $28.00, and its 52-week low is $16.33. Orchids has a market cap of $218 million and trades about 53,000 shares per day. What is surprising is that it has remained private despite its growth and niche business when consumer products outfits are looking for new growth. This also stands out above other consumer products companies with a whopping 5.2% dividend yield.
World Wrestling Entertainment Inc. (WWE) is very controversial. After all, it is a wrestling empire. Still, it has been around for years and the McMahon family has committed to a strong dividend policy. Most media outfits have a fairly low regular dividend, but the WWE has a smack-down high yield of about 4.2%. At $11.00, it has 52-week range is $7.50 to $11.33. Its market cap is about $820 million, and it trades more than 50,000 shares per day.