24 Tuesday, June 18, 2019 21:30

3 High-Yield Dividend Stocks to Buy This Summer

Studies have shown that there is no single best season or month to trade stocks -- take that, January Effect!That said, there are some solid, high-yield dividend stocks swirling around in the warm summer breeze. Read on for three that should be plucked out of the air.
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AT&TMonster telecom stock AT&T (NYSE:T) isnt exactly a monster on the stock exchange.The company is wrestling with revenue drops in both the communications and entertainment ends of its business.In the increasingly important entertainment segment, this is a case of short-term pain for long-term gain.

AT&T has decided to prioritize profitability, making moves like increasing prices for its DirecTV and U-verse offerings and eschewing some of its promotional deals. That has alienated some customers but increased margins.Meanwhile, AT&T is doing a good job reducing its big pile of debt. Its still very robust cash flow gives it scope to continue doing so while more than supporting that meaty dividend.

Over the past year, the companys shares have essentially traded flat, compounded by Q1 results that didnt exceed expectations.The future is ripe with potential. The upcoming WarnerMedia streaming service built on the companys massive library of TV and movies (from the Time Warner acquisition) will be a compelling proposition.

On the communications side, potentially strong demand for 5G services -- which could command premium prices -- might end up as quite the growth catalyst. So nows a good time to take a serious look at the stock.This is a fine, high-yield dividend stock backed by a profitable company that throws off loads of cash and has exciting opportunities in front of it.

AT&Ts distribution sports a nice, rich dividend yield of 6.3%.CenturyLinkCenturyLink (NYSE:CTL) has fallen out of favor with income investors, not least because it cut its dividend by 54% earlier this year. Like AT&T with Time Warner, CenturyLink made a big acquisition -- the heavily indebted Level 3 Communications -- that isnt easy to digest.

After that, it went on a crash diet, enacting a slate of cost-cutting moves that were completed well sooner than anticipated.This gave a real lift to free cash flow (FCF), which in fiscal 2018 doubled and then some to almost $3.9 billion.  Level 3, with some high-potential assets like its extensive fiber network, has a good shot at lifting CenturyLinks overall business, particularly with the 5G future in front of us.

Recently, the company said its looking into alternatives for its consumer operations (around 75% of its revenue comes from enterprise clients).Cutting that loose wont be easy or lucrative, but CenturyLink will be leaner and more focused once its done.With the spending necessary to keep the company competitive, FCF shrank notably in Q1.

. But its still high enough to fund capital expenditures and support the dividend, while leaving enough room for rises in both. Even after that deep cut, CenturyLink has a high-yield.....

News Code: 197756  |  Motley Fool
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