High Dividend-Yielding Stocks Can Reap Solid Returns for Cautious Investors

In April 2010 and March 2009 I highlighted some stocks that pay decent dividends, as an alternative to low yielding bank CDs and bonds. The market was up a nice 40% from March 2009 to April 2009. Throw in a 4 to 5% dividend and you were looking pretty good!

From April 2010 to today (December 2011), the market was fairly flat overall. While the Dow Jones Industrials were up 5.5%, the broader S&P 500 index was flat. Given the volatility of the market with the European debt crisis, ongoing U. S. economy concerns and other current events, investing in the stock market can make you sick to your stomach. But other low-risk investments like bank CDs yield practically nothing.

As an alternative, check out some of these high-yielding stocks. While there were a couple duds, overall these stocks were up nearly 6% over the last 18 months, beating the S&P 500. Plus, they paid investors between 4 and 5% in cold, hard cash! Here's an update.

• Altria (Symbol: MO) Stock was $21 in April 2010 and is $29 today ($17 in March 2009). With a current yield of 5.6%, why not profit on someone else's vice (hopefully not yours...lung cancer will cost you plenty long-term).
• BP plc (BP) BP was one of only 2 duds in this line-up but only because of the Gulf oil spill in May 2010. It is at $40 today, down from $60 in April 2010 (t

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An Update on High Dividend Paying Stocks

Thirteen months ago I highlighted some stocks that pay decent dividends, as an alternative to low yielding bank CDs and bonds. Since then, the market has made a nice comeback, up over 40% overall.  A monkey could have made money in this market by throwing banana slices at ticker symbols on CNBC.

The good news is that the 19 stocks highlighted grew by nearly 40%, even before taking into account the 5% to 6% dividends paid out during the period!

While I can't predict where the stock market is headed (seems like it should be taking a breather at some point, but who knows...), let's take a fresh look at these stocks!

• Altria (Symbol: MO) A year ago at $17 it yielded 7.9%. Today at $21 it yields 6.6%. Still worth a look profiting off smokers of the world!
• BP plc (BP) Yielded 8.8% at $38 a year ago but today it stands at $60 and at that price yields 5.7%. I suppose this is worth buying for the yield. Heck, fixed rate mortgages are still less than that.
• Aflac (AFL) At $15 it yielded 7.5%. But holy smokes! Stock is now $57 and yields just 2% at that price! I'd hold my shares purchased at lower prices but would hesitate buying more at this point.
• Eli Lilly (LLY) Lilly is now at $37 and yields 5.3%, slightly less compelling than the 6.5% yield at $31 a year ago but seems safe.
• GlaxoSmithKline (GSK) Yielded 6.8% at $29 last year but today yields 5.8% at $39. I'd consider

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Where Do I Invest Money When Interest Rates are So Low?

My mother is retired and is doing her best to live off of her retirement savings and Social Security payments.  She prefers to invest in conservative CDs and bonds as she doesn't have a lot of money and doesn't want to risk losing money.  However, the rates are so low today she is wondering what to do.  CDs are earning a measly 1.5% to 2.5% depending on duration.  Corporate bonds aren't much better.

The April 2009 issue of Kiplinger's Finance has some good alternatives for those willing to put some money in stocks that pay decent dividends.  While investing in stocks certainly has downside exposure as we've all experienced recently, if you are investing for the long haul, consider some of the following:

• Altria (Symbol: MO) at its current price of $17 generates a 7.9% yield (I don't like smoking but I don't mind profiting from those who do).
• BP plc (BP) at $38 has an 8.8% yield! Nice!
• Aflac (AFL) at $15 has a yield of 7.5% (though the stock price has been completely hammered down 80% over the past year...not for the faint of heart)
• Eli Lilly (LLY) at $31 has a yield of 6.5%
• GlaxoSmithKline (GSK) at $29 yields 6.8%
• Nicor (GAS) at $29 has a yield of 6.4%
• Merck (MRK) at $27 (was $24 yesterday) yields 6.3%
• H.J. Heinz (HNZ) at $33 yields 5.1% - ketchup on some nice dividends!
• Kraft Foods (KFT) at $23 yields 5.2%
• Coca-Cola (KO) at $41 yields 4%

Other stocks that I like for their dividends and what I believe to be are solid future prospects are:

• AT&T (T) at $24 a share yields 6.7%
• Verizon (VZ) $28 yields 6.8%
• Southern Co. (SO) at its current low point of $27 yields 6.3%
• Johnson & Johnson (JNJ) today is at $51 and yields 3.8%
• Kimberly-Clark (KMB) of Kleenex, Huggies and Depends fame at $46 yields 5.3%
• Microsoft (MSFT) at its current low price of $17/share yields 3.1%
• Bristol-Myers Squibb (BMY) at its current $21 price yields 6%
• Even Procter & Gamble (PG) at $47 is now yielding 3.5%
• I also like the iShares Investment Grade Corporate Bond ETF (LQD) which invests in high yielding corporate bonds and currently yields 5.8%

These yields look good now but things can change...both dividend payments and stock prices can drop (case in point...GE and all the financial stocks).  But stock prices have already dropped so much that I'm willing to take my chances on many of these.