3 Top High-Yield Financial Stocks to Buy in November With Yields as High as 6.3%
The yield of the average financial stock is just 1.5%. And if you are willing to buy good companies working through what are likely to be temporary problems, you can get much higher yields.
Right now, long-term investors looking for high yields should dig into T. Rowe Price (NASDAQ: TROW), Toronto-Dominion Bank (NYSE: TD), and W.P. Carey (NYSE: WPC). Here’s a quick primer on each one of these high-yield stocks.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
T. Rowe Price is an asset manager. It charges fees for providing financial services to customers who buy its mutual funds, exchange-traded funds (ETFs), and other investment products.
The key figure for investors here is assets under management (AUM), which rise and fall as customers deposit and withdraw funds and as the market goes up and down. The market tends to be more impactful than customer money flows. In fact, customers tend to stick around for a long time because moving money between financial providers is a difficult and time-consuming task. In other words, T. Rowe Price has an annuity-like business in some ways.
That said, T. Rowe Price’s historical strength is in mutual funds, a product type that is being displaced by ETFs and alternative assets. That’s not good, and it has investors worried about the stock. However, assets are sticky, and management is shifting into the areas to which customers are gravitating.
That suggests T. Rowe Price will adjust in time to changing industry dynamics. And it has more than enough financial power to revamp its business, noting that the company has no long-term debt on its balance sheet.
That’s why the 38-year dividend streak isn’t likely to end anytime soon, and why long-term dividend investors can be confident in the hefty 4.4% dividend yield.
Toronto-Dominion Bank, usually just called TD Bank, is the second-largest bank in Canada by deposits. It is the sixth-largest bank in North America when you include its U.S. business in the picture. And it has paid a dividend every year since 1857!
Note that neither the Great Depression nor the Great Recession ended that streak. TD Bank knows how to deal with tough times.
And the Canadian banking giant, which has a hefty dividend yield of 5.3%, is dealing with tough times today. To be fair, the pain is self-inflicted because the company’s U.S. business failed to detect and stop money laundering. That cost the company financially and in reputation.
Leave a Reply