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Four Compelling High Yield Stocks to Consider

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July 6, 2013 11:25 am
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Four Compelling High Yield Stocks to Consider

The recent sell off in the equity market created some attractive buy levels in some of the high yielding dividend stocks. We ran a screen that looked at larger cap. Companies yielding at least five percent that are heavily traded.

We also look for charts that had seem a recent sell off but didn’t have multi-year charts that were broken. Also interesting, each of these names not only make for a good longer-term dividend play, their charts might set up well for short-term trades. Playing a name as both an investment and a trade is generally not a good strategy, but look at each stock through both the eyes of a trader and income investor.

AT&T, Inc. (NYSE: T)- You know AT&T as the second largest cell phone carrier and the company with those amazing commercials with the kids but did you know that the company’s yield is currently 5.02 percent? Since mid-April the stock quietly sold off from its $39 level but has since rebounded above its descending trend line making the stock again look compelling.

AT&T, along with Verizon (NYSE: VZ) continue to be attractive as the cellphone arms race continues. Let Apple (NASDAQ: AAPL), Samsung, and Nokia (NYSE: NOK) battle for market share. AT&T will happily sell the newest phones that everybody has to have.

Related: Take U.K. Stocks, Leave the Sterling

PPL Corporation (NYSE: PPL)- PPL Corporation is a $17 billion utility that provides electricity to customers in the United States and the United Kingdom. Its U.S. operations include customers in Kentucky and Pennsylvania and has the ability to generate 19,000 megawatts of energy.

Since the beginning of May, the stock has sold off of its $33 high to $28.44. It rallied back to its 50 DMA but since failed finding support at its 200 day. The stock is a buy if it holds current levels. If it breaks down, wait to see what happens when it reaches its recent double bottom at $28.44. However, as a longer-term hold, current levels represent a good entry point. With a 5.01 percent yield, this utility is worth your watch list.

BP plc (NYSE: BP)- There are plenty of compelling “big oil” companies willing to pay up in the form of a big dividend. BP and its 5.25 percent yield is a prime example. The stock has seen some volatility but it’s remained within a channel since 2011 with it becoming tighter this year.

Currently the stock is trading at $41.17 but could sell off to around $40 before likely finding a bottom.

Garmin Ltd. (NASDAQ: GRMN)- You know Garmin as the manufacture of GPS devices. These include everything from automobile models to boats, planes, and even products for golfers.

The stock has had a tough year. It sold off from $43 to $32.52 before finding a bottom but the chart is currently forming an uptrend. The longer, multi-year uptrend is still intact and the recent selloff has created an attractive 5.09 percent dividend yield.

Of course, you shouldn’t take our word for it. First, evaluate each stock as an income play. Do you believe that each has strong, long-term viability? Second, if you choose to look at these names for a shorter-term trade, evaluate these names under short-term trading rules by looking at technical levels and short-term fundamentals.

Disclosure: At the time of this writing, Tim Parker had no position in the above mentioned securities.


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