A company with nearly 13% yield and another one with 6% yielding stocks could be the best long-term investment decisions if you want to earn income for years to come.
Regardless of how unpredictable and volatile the stock market may be, there are a few dividend stocks that investors should take a look at and research.
In this article, you will find useful information about the best two dividend stocks with yields over 5% that is worth investing in this year.
Alliance Resource Partners: 12.7% dividend yield
Alliance Resource Partners is a natural resource company that has over $2.0 billion of market capitalization. This company focuses on natural gas and renewable energies, such as solar and wind, and is the second-largest producer of electricity in the United States.
Alliance is a master limited partnership (MLP). The company generates income from coal production as well as its oil and gas mineral interests. Right now, it makes quite a bit of cash from its mining operations. In 2018, Alliance Resource Partners generated nearly $416.0 million in distributable cash flow.
Alliance Resource Partners follows a long-term export strategy, as well. While in 2016, the exports accounted for less than 5% of total sales, today they account for close to a quarter of annual revenue. China and India are among the fast-growing emerging markets that are a part of the Alliance long-term export strategy.
The company has many great things to offer to its investors, such as a 12.7% dividend yield, which a kind of income that might be hard to achieve with other companies.
Also, investors who believed in Alliance Resouce Partners have outearned their investment by 66%. How? While generating $114.3 million in distributable cash flow in the first quarter of this year, the company has paid $69.0 million in distributions to investors.
With all this being said, Alliance Resource Partners is one of the best dividend stocks investors need to consider investing in this year.
AT&T: 6.2% dividend yield
AT&T is a media and telecom giant that is organized into four segments Mobility, Business Solutions, Entertainment, and International. It trades for 8.9x Forward P/E and has a 6.2 dividend yield.
The first segment, mobility, is the wireless data and voice service business. Not only does AT&T have over 142 million wireless subscribers in the U.S., but it also has a leading wireless network in North America with LTE service, that covers over 400 million users.
This segment has a game-changer plan set in motion, and that is the 5G network, which is planned to be accessible nationwide. With 5G networks, companies like AT&T will reap substantial margins from data usage as there will be a noticeable increase in average revenue per wireless subscribers.
The second segment, Business Solutions, is in charge of all the voice and internet services provided to private businesses and public organizations.
The third segment, Entertainment Group, houses a diverse collection of assets, such as consumer pay-TV, consumer internet, consumer landlines, digital advertising, and AT&T, continually tries to grow this segment as it is making a play to be a primary content provider. For example, in 2015, the company bought DirectTV(pay-TV), in 2018 – Time Warner (content creation).
The last segment, International, was increased after the acquisitions of Direct TV and Iusacell in Mexico. The International segment provides internet, wireless, TV as well as voice services to Latin American countries.
Overall, AT&T is a telecom and content giant, which has a high yield rate, and if you are an investor who is looking for a way to earn income for years to come, then a 6.2 dividend yield is an excellent way to do so.
The Bottom Line
A company with nearly 13% yield and another one with 6% yielding stocks have outperformed many other companies as these two companies are leading two high-yield dividend stocks. Both the AT&T as well as the Alliance Resource Partnership are great long-term investment choices for investors who want to earn income for years to come.
However, even though high-yield dividend stocks come with excellent income potentials and are attractive to investors, they require additional research, because of the higher the yield, the riskier the stock. So, be careful when investing in high yield dividend stocks.