As U.S. interest rates continue to hover at their highest level in over two decades, investors are increasingly drawn to the realm of high-yield corporate bonds, seeking both lucrative returns and a diversification from stocks.
The U.S. high-yield corporate bond market, as tracked by the iShares iBoxx $ High Yield Corporate Bond ETF HYG, has exhibited positive performance of late, surging by 10% from the depths seen in October 2023.
It’s important to remember that when it comes to bonds, rates and prices move in opposite directions, meaning that as rates increase, prices decrease and vice versa.
For many traders eyeing the potential for interest rate cuts by the Federal Reserve in 2024, this could merely signify the start of a new long-term uptrend for the corporate bond market.
Read also: BEST HIGH YIELD INVESTMENTS TO EARN
Navigating the terrain of high-yield bonds demands caution.
High-yield bonds, also called junk bonds, are corporate bonds issued by companies with lower credit ratings than safer investment-grade bonds. These bonds receive speculative ratings below BBB from agencies like Standard & Poor’s, Moody’s or Fitch.
Behind the allure of lofty returns lies a stark reality: heightened risk. The golden rule of investment resonates loudly here — the higher risk of a company not meeting its obligations, the higher the potential reward for investors.
For those wary of investing in stocks due to a company’s bleak profit outlook, turning to bonds presents an alternative strategy by banking on the company’s potential survival until maturity.
As investors seek to capitalize on the potential rewards of these high-yield bonds, they must remain vigilant, recognizing that every glittering opportunity carries its own share of peril.
Top 10 US Corporate Bonds With The Highest Yield To Maturity As Of April 2024
The following are the top 10 high-yielding U.S. corporate bonds as of early April 2024, according to Public.com‘s bond screener:
- AMC 6.125% 05/15/2027
- Issuer: AMC Entertainment Holdings AMC
- Yield: 34.19%
- Coupon: 6.125%
- Coupon Frequency: Semi-annually
- Price: $48.62
- Maturity: 05/15/2027
- Rating: Speculative grade
- SATSX 6.625% 08/01/2026
- Issuer: Hughes Satellite Systems Corp., fully owned by Echostar Corp. SATS
- Yield: 33.81%
- Coupon: 6.625%
- Coupon Frequency: Semi-annually
- Price: $58.47
- Maturity: 08/01/2026
- Rating: Speculative grade
- DISH 7.375% 07/01/2028
- Issuer: Dish Network Corporation
- Yield: 30.74%
- Coupon: 7.375%
- Coupon Frequency: Semi-annually
- Price: $46.55
- Maturity: 07/01/2028
- Rating: Speculative grade
- LUMN 6.875% 01/15/2028
- Issuer: Lumen Technologies Inc. LUMN
- Yield: 30.71%
- Coupon: 6.875%
- Coupon Frequency: Semi-annually
- Price: $48.70
- Maturity: 01/15/2028
- Rating: Speculative grade
- OPI 2.4% 02/01/2027
- Issuer: Office Properties Income Trust OPI
- Yield: 30.45%
- Coupon: 2.4%
- Price: $49.26
- Maturity: 02/01/2027
- Rating: Speculative grade
- OPI 2.65% 06/15/2026
- Issuer: Office Properties Income Trust
- Yield: 29.82%
- Coupon: 2.65%
- Coupon Frequency: Semi-annually
- Price: $58.38
- Maturity: 06/15/2026
- Rating: Speculative grade
- OPI 4.5% 02/01/2025
- Issuer: Office Properties Income Trust
- Yield: 28.37%
- Coupon: 4.5%
- Coupon Frequency: Semi-annually
- Price: $83.48
- Maturity: 02/01/2025
- Rating: Speculative grade
- AMC 5.875% 11/15/2026
- Issuer: AMC Entertainment Holdings
- Yield: 28.31%
- Coupon: 5.875%
- Coupon Frequency: Semi-annually
- Price: $60.42
- Maturity: 11/15/2026
- Rating: Speculative grade
- DISH 5.125% 06/01/2029
- Issuer: Dish Network Corporation
- Yield: 27.46%
- Coupon: 5.125%
- Coupon Frequency: Semi-annually
- Price: $40.22
- Maturity: 06/01/2029
- Rating: Speculative grade
- AMC 5.75% 06/15/2025
- Issuer: AMC Entertainment Holdings
- Yield: 25.06%
- Coupon: 5.75%
- Coupon Frequency: Semi-annually
- Price: $81.03
- Maturity: 06/15/2025
- Rating: Speculative grade
Read now: Best High-Yield ETFs Right Now
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