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9 High-Yield Stocks to Consider in Lieu of Bonds

BOSTON ( TheStreet) -- Investors seeking the security of Treasury bonds in fear that Europe's ongoing economic woes will spread are getting the lowest yields on the 10-year note in almost 70 years.

But those investors are missing out on much more attractive alternatives that don't have a significantly higher degree of risk.

They are high-yielding stocks of top-notch companies that have a good chance for share-price appreciation when the market regains its equilibrium.

In order to find some of the best of them, I screened the Morningstar database for high-yielding stocks of companies with market values of at least $5 billion and financial fundamentals that put them among the best in their industry, which means their futures are sound.

I found five in this elite group with dividend yields more than three times that of the record low 1.53% rate being paid by the 10-year Treasury on Thursday and four others that are paying better than 4%.

One shining example is Southern Copper (SCCO), a copper producer with the world's largest mine reserves.

Its shares currently yield 7.06% and have returned 32% annually on average over the past decade. Sure, the metals market, along with Southern Copper's shares, are on a constant roller-coaster ride, but given that this company had $1.4 billion in cash versus only $2.7 billion in debt at the end of 2011, it's in a lot better financial shape than many European countries right now.

Two other interesting picks are from Canada, a nation that has weathered the recession in better shape than the U.S. due to the fiscal conservatism of its banking system.

One, Rogers Communications (RCI), with a yield of 4.21%, is Canada's largest wireless voice and data communications services provider as well as its biggest cable television provider, this in a country that is several years behind the U.S. in terms of cell phone and cable TV penetration rates. So it has plenty of room for growth.

Rogers' bonds get investment-grade ratings and last year it repurchased about 31 million shares under a buyback plan that is still in force this year.

Another winner from up north is a young real estate investment trust (REIT), Riocan Real Estate Investment (RIOCF), Canada's biggest retail REIT. It owns and manages shopping centers.

It's in a great position for growth as the struggling Sears Canada (SEARF) is expected to sell off some of its plum store locations, just as U.S. retailers, such as mass market retailer Target (TGT - Get Report) and upscale clothier Nordstrom (JWN), are keen to enter Canadian urban markets.

Here are summaries of nine, high-quality companies' stocks with current dividend yields over 4% and positive long-term prospects arranged in inverse order of dividend yield:
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MO $57.75 0.43%
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