Top 10 Highest-Yielding S&P 1500 Stocks
James Altucher
09/06/07 - 08:28 AM EDT
One of the best ways to play declining interest rates,
according to Jim Cramer, is to invest in
high-dividend-paying stocks.
That advice prompted us at Stockpickr.com to sort through the components of
the S&P 1500 Composite Index to find the stocks that pay dividends in excess
of 7% and have market capitalizations of at least $350 million. We then
whittled the list down to the
Top 10 Highest-Yielding S&P 1500 Stocks.
When interest rates drop, bonds and income-paying stocks rise. Investors
are willing to pay up for high dividends because they can no longer get the
same rates from certificates of deposits and short-term Treasuries.
High-yield stocks have the advantage of both income and the potential for
capital appreciation.
The highest-yielding stock on the list is
American Capital
Strategies , an investment company that invests in public and private
companies, employee buyouts, recapitalizations, mezzanine financings and
debt instruments. The stock pays a high 9.1% yield, and the company has paid
quarterly dividends for the last 10 years. It has a price-to-earnings (P/E)
ratio of 4 and a P/E-to-growth (PEG) ratio of 1.4.
American Capital appears in the
Barron's Insider Purchases 8-11-07 portfolio at
Stockpickr, which lists the largest insider purchases mentioned in the Aug.
11 edition of the weekly financial publication. The company's CEO and a
director recently purchased 73,000 shares amounting to $2.8 million worth of
stock.
The
Barron's Insider Purchases list also contains
NuStar
Energy , due to the fact that the CEO and three directors recently
purchased 31,900 shares, or roughly $2 million worth of stock. NuStar has a
yield of 6.3%, with a P/E of 21.
Energysouth also makes the
Barron's Insiders list because three directors and an officer recently
purchased 39,596 shares, or $2 million worth of stock. Energysouth has a
yield of 2% and a P/E of 28.
IndyMac Bancorp is the second-highest yielder on the S&P
1500 list, with a yield of 8.5%. Shares of this lender have suffered during
the last few months from the general market fallout over adjustable-rate and subprime mortgages. The stock has a P/E of 7 and a PEG of 0.87.
IndyMac is part of the Stockpickr portfolio called
Stocks With a PEG of Less Than 1, a list that also
includes
Morgan Stanley , which has a PEG of 0.59 and a yield of
1.7%, and
Chesapeake Energy , which has a PEG of 0.41 and a small yield
of 0.8%.
Another stock on the list of high-yield S&P 1500 stocks is
Entercom
Communications , with a yield of 7.3%. Entercom owns and operates radio
stations across the country including in the San Francisco, Boston, Seattle,
Denver, Sacramento, Portland, Kansas City, Indianapolis and Milwaukee markets. The stock has a P/E of 80.8 and a PEG of 3.8.
Entercom shows up in the Stockpickr portfolio of
More High-Yield Stocks You've Never Heard Of, which lists
high dividend stocks with relatively unknown names. Other stocks on this
list include
First Commonwealth Financial , a bank holding company that
yields 5.8%, and
TAL International Group , a container equipment leasing
company that also yields 5.8%.
The entire list of the
Top 10 Highest-Yielding S&P 1500 Stocks can be found at
Stockpickr.com.
