5 Manufactured High Yielders

If you rely on bond interest or stock dividend payments for current income, you're probably looking for answers. With short-term treasury bills yielding 0.25%, five-year CDs paying 2.26%, and the average S&P 500 stock only offering a 1.9% dividend yield, it may be tempting to reach for extra yield by buying shares in dubious companies. Don't. Investors in oil refiner Valero learned their lesson the hard way. In 2006 and 2007, business was booming; refining spreads were wide, the company generated millions in free cash flow, and it nearly doubled its yearly dividend payment from $0.32 to $0.60. Valero retained its dividend policy, and throughout 2009, it had an attractive dividend. But eventually, the commodity nature of the refining business caught up with the cash flows. In 2010, the company was forced to cut its dividend by 66%.... Read more