Three Stocks with “Jumbo” Yields

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Three Stocks with “Jumbo” Yields

September 14, 2021, 3:00 AM·4 min read

In my mind a “jumbo” dividend yield — within the context of the low interest-rate environment — is anything above, say, 3%, or more than double the yield of the broad market and 10-year Treasury, notes Chuck Carlson, dividend reinvestment specialist and editor of DRIP Investor.

Of course, chasing yield has never been a great investment approach. Building a portfolio strictly based on yield will limit your portfolio diversification (a lot of high-yielding stocks aggregate in a few industries), stunt your portfolio’s dividend-growth prospects, and limit the portfolio’s capital-gains potential.

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Still, there are some stocks with jumbo yields that do represent decent portfolio holdings and should provide healthy cash flow, growing dividend streams, and reasonable capital-gains potential.

The stocks profiled here have yields of at least 3% and have shown dividend growth over the last five years. They also offer a direct-purchase plan whereby any investor may buy the first share and every share directly from the company.

ExxonMobil (XOM) is yielding well over 6%. Oil stocks, including Exxon, have backed off their highs sharply in recent trading. I view the pullback as offering a decent entry point with these