Alliance Holdings (Coal) at 10.5%
Alliance Holdings G.P. L.P. (NASDAQ: AHGP) produces and markets coal primarily to utilities and industrial users in the United States, so it is in the unloved coal sector. It claims a $1.5 billion market cap, and its units have a distribution of $2.92 per year, which generates a yield of close to 10.5%. With shares at $27.12 on last look, its consensus analyst target price is up at $32.00 and it has a 52-week range of $22.71 to $32.70.
Its last distribution of 73 cents was paid in August, and that was higher than the 55-cent rate for the prior year and lower than its previous 96-cent distribution at the start of 2016. Even with the administration defending coal, coal in general still seems to have more pressure than upside as an industry.
Calamos (Closed-End Fund) at 10.1%
Calamos Convertible and High Income Fund (NASDAQ: CHY) is a closed-end fund with an $850 million market cap and a current yield of 10.1%. The management group (Calamos) recently announced a private placement of almost $600 million worth of mandatory redeemable preferred shares covering this and other closed-end funds. That 10-cent monthly dividend has been in place since being raised from 8.5 cents back in early 2014.
While its net asset value was not at a premium above the share price, the actual income yield is lower than its payout yield, and it did have almost 30% leverage. At $11.86 a share, this closed-end mutual fund yields 10.1%, and it has a 52-week range of $9.91 to $12.15.
CBL & Associates (REIT) at 12.0%
CBL & Associates Properties Inc. (NYSE: CBL) is a public REIT that focuses on regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties, primarily in the southeastern and midwestern United States. Its current dividend yield is over 12%, and it is worth more than $1.4 billion.
Its shares are trading at $8.33, in a 52-week range of $7.14 to $13.09. CBL has a 26.5-cent payout per quarter, above its latest 18 cents in earnings per share but under its latest 5 cents per share funds from operation. Its consensus analyst target price is $8.89, and the street-high analyst target price is still up above $11.
CenturyLink (Telecom & Communications) at 11.0%
CenturyLink Inc. (NYSE: CTL) remains among the highest yields of them all in telecom and communications, and the company has still been securing state and other approvals to complete its acquisition of Level 3. It seems hard to imagine that the company is going to be able to keep its dividend that high after (and if) the deal is completed. Level 3 doesn’t even pay a dividend, and this is a leveraged buyout.
At $18.50 a share and with a $10 billion market value, CenturyLink has a dividend yield of about 11%. If the $2.16 annualized payout is above its earnings and the merger is leveraged, how can the payout easily be maintained? CenturyLink has a 52-week range of $18.17 to $33.45. Its consensus analyst target price of $25.53 almost feels too high after a big sell-off, and this feels like a dividend cut has to be coming.
Chimera (REIT) at 10.3%
Chimera Investment Corp. (NYSE: CIM) is a top-notch investor in what might feel like riskier mortgage REITs. Its dividend of 50 cents per quarter is currently higher than the 48-cent quarterly dividend back in 2016, and it has fluctuated over time. The shares trade at $19.35 and come with a $3.6 billion market cap, within a 52-week range of $14.70 to $20.90. Its current yield is about 10.35% for new investors.
While the consensus analyst target is $18.88, Deutsche Bank was last seen in August with a $20 price target. Its core GAAP book value was $16.54 per share at the end of the second quarter, with core earnings of $0.60 per share and GAAP earnings of $0.56 per share.