In the investing world, top high-yielding dividend stocks can offer robust income streams, potentially acting as strong pillars for conservative investors looking to meet their financial milestones. However, the waters can get murky when you delve into the territory of dividend stocks yielding 20% or more. High yields often emerge from companies grappling with inherent weaknesses or structural problems that can jeopardize the sustainability of their dividends. Therefore, investing in high-yield dividend stocks calls for prudence.
Over the past year, the stock market has been incredibly volatile, sparking exasperation in both bulls and bears. When done right, adding a sprinkle of high-yield dividend stocks can act as a cushion against inflation while enhancing total returns. These high-yield dividend stocks could serve as lifeboats in turbulent market waters, allowing your wealth to grow steadily over time. This dual role makes them an attractive option for investors looking to balance both income and growth in their portfolios.
Petroleo Brasileiro (PBR)
Dividend Yield: 54.6%
Leading Brazilian oil and gas player Petroleo Brasileiro (NYSE:PBR), under the stewardship of CEO Jean-Paul Prates, remains committed to maintaining its focus on oil output, squashing concerns over a dramatic pivot towards renewable energy sources.
It’s coming off a rock-solid year, with top-line growth exceeding historical performances. However, the slowdown in oil prices has weighed down its recently released results. Nevertheless, its results are still mighty impressive, with its net income of $7.7 billion exceeding analyst estimates by 19.4%. Moreover, on the revenue front, despite the dip in total commercial production, revenues were up by double-digit margins, beating estimates by more than $300 million.
Furthermore, Petrobras’ board gave the green light to roughly $4.94 billion in dividend payments due later this year while hinting at potential changes to its payout policy. This includes potentially returning more capital to shareholders through stock buybacks, reiterating its aim to ensure investor satisfaction.
Star Bulk Carriers (SBLK)
Dividend Yield: 28%
Cyclical stocks such as Star Bulk Carriers (NASDAQ:SBLK) are usually on the radars of investors with a high-risk tolerance. When the global pandemic struck, SBLK stock took a substantial hit, but reopening headwinds have lifted SBLK stock out of the doldrums. Nevertheless, it’s up against new challenges in China’s geopolitical uncertainty, economic weaknesses and sluggishness.
However, there’s reason to be bullish over SBLK stock, as my fellow InvestorPlace contributor Chris Markoch highlighted that the International Monetary Fund forecasts the dry bulk carrier fleet to grow up to 2.7% this year.
Star Bulk has a strong record of putting its shareholders first, returning over $1 billion to investors through dividends and share buybacks over the past few years. Its monstrous yield of more than 28% is a testament to its quality as an income stock.
CVR Partners (UAN)
Dividend Yield: 38%
CVR Partners (NYSE:UAN) has positioned itself as a front-runner in the fertilizer industry, registering massive growth in its profitability margins amid skyrocketing fertilizer prices last year due to the Ukraine-Russia conflict. However, fertilizer prices have retreated by more than 40% from last year’s peak.
Though prices are down, it posted a relatively strong performance through effective capacity utilization, lower natural gas costs, and it selling its production at higher fourth-quarter prices. On top of that, fertilizer prices are still well above what they were several years back. Hence, there is much to like about its long-term prospects, especially when looking at its eye-popping dividend yield.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines