www.tenpercentdividends.com claims to have information on companies that give 10% dividends on a monthly, quarterly and yearly basis!! The most I’ve ever heard of is 4-6 with SBC, BofA, JPM, and Altria…other companies too, but I can’t remember. Have you ever heard of any company that gives a dividend yield of 10%?
A quick stock screen yields a couple dozen
Most of which are penny stocks or highly volatile, so you can pay, say, $3/share, have the price fall 50%, then get 10% (of the fallen price) back in dividend, leaving you down 80 cents/share for your troubles.
-lv
Rather than “penny stocks”, a lot of what you just screened are REITs or royalty trusts which are special animals.
A REIT is a “real estate investment trust”, which operates under special rules permitting the corporation to avoid paying tax on dividends. One of those rules is that 95% of the income must be distributed to shareholders. There are many flavors of REIT, making money from different sorts of real estate - office space, health care properties, storage, apartments, purely from mortgage paper, etc.
There are pros and cons to REITs. One of the pros is that a well run one will generate high dividend yields fairly consistently. One of the cons is that they often underperform the market in good times. You should consider them differently than you would stocks when making investments in them. The usual metrics you apply to a normal stock don’t neccesarily apply.
A RIC (Regulated Investment Company) is a similar arrangement to a REIT which is not real-estate based, but which follows similar rules, and also must return 95% of its income in dividends.
Royalty trusts manage some sort of resource on behalf of the unit holders - typically, things like oil or gas wells. The owner of the oil-producing property sold their rights to the royalty trust, which paid for it on behalf of the shareholders, and operates it, paying royalties to the shareholders. Again, though it trades like a stock, you should consider them in a different light. The resource depletes over time, for one thing, meaning that the trust has to acquire new resources.
Usually, a certain percentage of your dividend in a royalty trust is “return of capital”. The trust is literally giving you your money back over time. The good part is that you don’t pay tax on this part of the payout. The bad part is that it reduces your cost basis on the security, and becomes extra capital gain when you sell it. If you hold for a very long time, your cost basis can go to zero, and you start paying capital gains on that part of the payout.
Several of the securities you listed are “canroys” - Canadian Royalty Trusts. If you invest in one of these, you will also pay Canadian tax on the dividend payouts, which you can declare as a deduction or recover as a tax credit.
The Motley Fool on these two entities:
http://www.fool.com/news/commentary/2003/commentary030710bm.htm
http://www.fool.com/foolu/askfoolu/2002/askfoolu021028.htm
I should also mention that if you invest in a canroy or any other foreign royalty trust, you have to consider that the thing pays in foreign currency, and your yield in US dollars will be directly affected by the exchange rates. Also, they are subject to the laws of the foreign country. There has been concern with canroys, for instance, that too many investors in them are American rather than Canadian, the Canadian government doesn’t like it, and may do something to restrict non-Canadian investors.
Thanks for the details yabob, I (obviously) didn’t spend a whole lot of time on my answer. I just checked out a couple, which happened to have their share price shrink somewhere on the order of 40%-90% over the last 5 years, so the main point I was going for is that high dividend doesn’t necessarily mean that you’re making money on the deal. A side point is that you don’t have to pay some web site some amount of money (do they say anywhere on the site how much this subscription costs?) to find these companies. All publically traded companies report their margin payouts to the general public, and there are a ton of free tools available to find ones with high margins.
-lv