The market typically ends the year on a high note. I’m guessing that happens this year as well, notes Harry Domash, editor of Dividend Detective. Here, the income specialist uncovers three high-yielding opportunities.
Given recent market action, there’s a lot of risk here. So be cautious and don’t add cash to the market that you’re going to need back anytime soon.
We are adding a new contrarian pick to our Insurance Industry portfolio. Surveys show that our new pick is considered one of the best insurance companies in the U.S. But, it’s unloved, to say the least, by stock analysts.
Although its fundamentals look strong to us, only one analyst follows the company and he’s rating it at “strong sell.” So, it won’t take much for it to beat expectations. Plus, it’s paying a 5.0% dividend yield.
A true “contrarian” pick to the portfolio, Mercury General (MCY) is a multiple-line insurance carrier predominantly offering personal auto, homeowners and renters insurance.
It markets through a network of 8,000 independent agents in Arizona, California, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia. Forbes Magazine recently ranked Mercury as one of the best U.S.-based insurance companies based on interviews of 16,000 plus U.S. consumers.
In my view, Mercury General has a lot going for in terms of fundamentals like economic earnings, return on invested capital, free cash flow yield, etc. — along with its 5.0% yield.
We’re also adding a new pick to our Preferred Stocks portfolio paying a 6.6% dividend yield based on its current trading price (market yield).
Ready Capital is not credit-rated, but its dividends are cumulative meaning that the issuer remains on the hook for any missed dividends. Issuers must pay to have their preferreds credit rated and Moody’s has rated other notes issued by the same borrower at investment quality.
Ready recently traded at $24.78 per share, and its market yield was 6.6%. Its yield to call to its 6/10/26 call date is 6.7%. That sort of return is hard to come by for preferred stocks these days.
In our Monthly Paying Closed-End Funds portfolio, we’re replacing one underperforming fund with a new idea — we’re buying Calamos Dynamic Convertible & Income (CCD).
Calamos holds mostly U.S.-based convertible stocks and high-yield fixed-income securities selected to generate both capital appreciation and income. Calamos is currently paying a 7.7% dividend yield. It has returned 17% over the past 12-months and averaged 27% annually (not a typo) over the past three years.