A Dividend Portfolio of These 6 Stocks Would Pay About 12%

The market correction over the last couple weeks has shown how important it is to have stocks that pay a solid dividend. Most dividend stocks fared better in the latest correction when compared with stocks that pay little or no dividends. Also of increasing importance is thatBen Bernanke and the Federal Reserve recently said that rates would be kept at very low levels (near zero) for about two more years.

With rates stuck near zero for at least a couple more years, smart investors are building a portfolio that will pay them much more than what most bonds, certificates of deposits, and other common investments will pay. Investors who take no action and keep low yielding investments for the next couple of years will probably have just about nothing to show for it, while investors who act now could have almost 25% more money due to dividends and possibly some capital gains. Here are the stocks to consider in order to build a high yield portfolio (an equal weighting in these stocks would provide a yield that averages nearly 12%):

Amerigas Partners, LP. (APU) is a leading distributor of propane gas in the United States. This company distributes propane gas to about 1.3 million residential, commercial and other customers through a nationwide network of distribution points. When energy prices rise it can lead to higher profits for companies like Amerigas. Demand for propane fuel is likely to increase over time, especially if the economy recovers.

Here are some key points for APU:
Current share price: $42.87
The 52-week range is $36.76 to $51.50
Earnings estimates for 2011: $2.97 per share
Earnings estimates for 2012: $3.03 per share
Annual dividend: $2.96 per share, which yields 7%

National Grid Transco (NGG) operates an electricity transmission network in England, Scotland, Wales, and the Eastern United States. It also operates a gas national transmission system in Great Britain, and storage facilities for liquefied natural gas amongst other things. This company pays a very generous dividend and can raise prices as inflation rises in the future. This stock has been trending higher in recent days so I would wait for a pullback.

Here are some key points for NGG:
Current share price: $50
The 52-week range is $41.17 to $52.18
Earnings estimates for 2011: $4.07 per share
Earnings estimates for 2012: $4.51 per share
Annual dividend: $3.80 per share, which yields 7.6%

Annaly Capital Management, Inc., (NLY) is a mortgage real estate investment trust (REIT) company, based in New York. Annaly pays a dividend of about $2.60 annually, which is equivalent to a yield of around 14%. This dividend is so generous, it makes sense to have at least some money invested here.

Here are some key points for NLY:
Current share price: $18.31
The 52-week range is $14.05 to $18.79.
Earnings estimates for 2011: $2.53 per share
Earnings estimates for 2012: $2.38 per share
Annual dividend: $2.60 per share, which yields 14.2%

Hatteras Financial Corp (HTS) is a mortgage real estate investment trust (REIT) company, based in North Carolina.

Here are some key points for HTS:
Current share price: $28.63
The 52-week range is $23.80 to $31.98.
Earnings estimates for 2011: $4.20 per share
Earnings estimates for 2012: $4.23 per share

Annual dividend: $4 per share, which yields 14.2%

Chimera Investment Corporation (CIM) is a real estate investment trust (REIT) that invests in residential mortgage-backed securities, and both commercial and residential mortgage loans. With a 16% yield and a share price below book value, this looks like a great buying opportunity.

Here are some key points for CIM:
Current share price: $3.23
The 52-week range is $2.62 to $4.36
Earnings estimates for 2011: 60 cents per share
Earnings estimates for 2012: 59 cents per share
Annual dividend: 52 cents per share, which yields 16%
Book value: $3.45 per share

American Capital Agency (AGNC), is a real estate investment trust (REIT) that invests in residential mortgage-backed securities, and both commercial and residential mortgage loans.

Here are some key points for AGNC:
Current share price: $29.96
The 52-week range is $22.03 to $30.76
Earnings estimates for 2011: n/a
Earnings estimates for 2012: n/a
Annual dividend: $5.60 per share, which yields 18.8%
Book value: $26.76 per share

Data sourced from Yahoo Finance. No guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.