Investing in high yield dividend stocks is one of the smart ways to build passive income. Dividend stocks distribute a portion of the company’s earnings to the shareholders. These dividends are usually paid quarterly. If one is looking to earn income from investing in stocks, high yield dividend stocks is the way to go.
Company lifecycle
When companies get listed on the stock exchange, their aim to raise capital to fuel their growth. Every penny of the raised capital is used for expansion into newer markets and developing new products and services. This is the early life cycle of a public company. Once maturity is attained, new ways of reinvesting capital usually dry up. This is when companies employ dividends to return a portion of the capital to the shareholders.
Since the companies usually pay dividends after reaching a certain level of stability, the dividend stocks are usually safe bets. However, in investing, nothing should be taken for granted and due diligence has to be employed to make sure dividends are sustainable for at least a period of 2 to 3 years.
Dividend stocks post COVID-19
The Coronavirus pandemic paused the chugging economic train. Because of this black swan event, many companies were hard hit, due to the shutdowns. Companies started looking to cut costs and save capital. This resulted in companies either suspending their dividend or cutting it considerably. Most of the dividend recommendations by sites were no longer current. Therefore, I went ahead and created a list of 20 high yield dividend stocks. If the companies have a lot of debt or their payout ratio is greater than 50%, usually those dividends are not sustainable. The sustainability also has been included in this table.
Megacap and High cap high yield dividend stocks
| Symbol | Company Name | Ex-dividend date | Dividend Yield | Sustainability |
| ET | Energy Transfer LP | May 06, 2020 | 18.83% | Likely |
| IEP | Icahn Enterprises LP | May 18,2020 | 16.13% | Unlikely |
| MPLX | MPLX LP | May 7, 2020 | 14.99% | Likely |
| OKE | ONEOK, Inc. | Apr 24, 2020 | 13.24% | Likely |
| BBVA | Banco Bilbao Vizcaya Argentaria SA (ADR) | Apr 7, 2020 | 12.87% | Somewhat likely |
| BBSEY | BB Seguridade Holding Corp – ADR | Feb 20, 2020 | 12.58% | Likely |
| NLY | Annaly Capital Management, Inc. | June 29, 2020 | 12.48% | Very likely |
| BSBR | Banco Santander Brasil SA (ADR) | May 8, 2020 | 11.84% | Very likely |
| BP | BP plc (ADR) | May 8, 2020 | 10.99% | Likely |
| CEO | CNOOC Ltd (ADR) | Jun 3, 2020 | 10.48% | Very likely |
| CTL | Centurylink Inc | May 29,2020 | 10.37% | Very likely |
| SNP | China Petroleum & Chemical Corp (ADR) | Jun 1,2020 | 10.23% | Unlikely |
| EPD | Enterprise Products Partners L.P. | July 30, 2020 | 9.98% | Very likely |
| BTI | British American Tobacco PLC (ADR) | Oct 1, 2020 | 7.64% | Very likely |
| E | Eni SpA (ADR) | May 18, 2020 | 9.48% | Unlikely |
| TEF | Telefonica S.A. (ADR) | Jun 17, 2020 | 9.35% | Unlikely |
| WMB | Williams Companies Inc | Jun 11, 2020 | 8.29% | Unlikely |
| TX | Ternium SA (ADR) | Apr 29, 2020 | 8.24% | Likely |
| MO | Altria Group Inc | Jun 12, 2020 | 8.22% | Very likely |
| T | AT&T Inc. | Jul 9, 2020 | 6.97% | Very likely |
Disclaimer: This list is not a recommendation for investments but only for informational purposes. Please do your due diligence before making any investment decisions.
What about IBM?
The yield is about 5%, I put together this list for yield greater than 6% atleast. But IBM is an excellent blue chip stock with steady dividend history.