Buy These 5 High-Yielding Stocks To Cushion Your Portfolio

After an exponential rise throughout 2017, the U.S. stock markets have been witnessing turmoil since February 2018. Markets remain highly unstable with rapid ascent being observed one week, followed by a sharp decline the very next week. Investors remain skeptical about the U.S. mid-term elections and high expectations from first-quarter earnings.

One of the easiest ways for any company to raise its shareholders’ wealth is to hike dividend rate. Investment in high-dividend paying stocks, over a reasonable time period, is likely to bring good returns, especially when the market is plagued with severe volatility. At this stage, investors should choose stocks which promise strong dividend yield and carry a favorable Zacks Rank to capitalize on future growth.

Political Issues Loom Large

With mid-term elections in the United States imminent, several opinion polls have predicted that Democrats are likely to get majority in the House of Representatives even though Republicans are expected to maintain an upper hand in the Senate. However, a divided government doesn’t bode well for investors.

Trump administration is deeply concerned about national security and China’s drive to unseat the United States as the primary developer and supplier of products in the fields of high-tech artificial intelligence, semiconductors, quantum computing and various other digital technology driven sectors.

These concerns compelled the government to adopt and impose protectionist policies. However, Trump’s strategy might not succeed with a majority of Democrats in the House.

Meanwhile, the Senate Judiciary Committee is drafting a bill to protect special counsel Robert Mueller from being fired by President Trump. Mueller is investigating into whether Trump’s campaign team colluded with Russia in the run-up to the 2016 presidential election.

Earnings Expectations Skyrocket

First-quarter earnings results have been exhibiting strong momentum so far. In fact, investors have pinned high hopes on first-quarter 2018 earnings. These massive expectations are often resulting in day-to-day market volatility.

On Apr 15, share price of three major banks JPMorgan Chase & Co. (NYSE:JPM) , Citigroup Inc. (NYSE:C) and Wells Fargo & Co. (NYSE:WFC) shed 2.7%, 1.6% and 3.4%, respectively. These banking behemoths lost significantly despite reporting better-than-expected first quarter results.

The earnings and revenue growth rates along with the proportion of positive earnings surprises are tracking materially above historical periods. With expectations too high, it is possible that actual results may not live up to expectations, which will weigh on the sector’s stock market performance in the coming days. (Read More: Can Tech Earnings Live Up to Expectations?)

Our Top Picks

Despite strong economic fundamentals, several concerns plague the investors. Political uncertainty and high expectations from earnings are immediate concerns. At this juncture, it will be lucrative to invest in high-yielding stocks in order to ensure a steady income stream.

We narrowed down our search to five stocks with favorable Zacks Rank and high-dividend yield.

Chart below depicts price performance of our five picks year to date.

Advanced Emissions Solutions Inc. (NASDAQ:ADES) develops and implements environmental technologies, equipment and specialty chemicals that enable coal-fueled power plants to meet emissions regulations. It has a dividend yield of 8.9%.

Advanced Emissions has expected earnings growth of 29.5% for current year. The Zacks Consensus Estimate for the current year has improved by 8.6% over the last 60 days. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tecnoglass Inc. (NASDAQ:TGLS) is engaged in manufacturing and selling of architectural glass as well as windows and aluminum products for the residential and commercial construction industries. It has a dividend yield of 6.7%.

Tecnoglass carries a Zacks Rank #2 (Buy). The company has expected earnings growth of 96.9% for current year. The Zacks Consensus Estimate for the current year has improved by 12.5% over the last 60 days.

Tallgrass Energy GP LP (NYSE:TEGP) is engaged in the transportation, storage and processing of natural gas, the transportation of crude oil and the provision of water business services primarily to the oil & gas exploration and production industry. It has a dividend yield of 6.8%.

Tallgrass Energy carries a Zacks Rank #2. The company has expected earnings growth of 42.1% for current year. The Zacks Consensus Estimate for the current year has improved by 22.7% over the last 60 days.

Archrock Inc. (NYSE:C) is a provider of natural gas contract compression services as well as supplier of aftermarket services of compression equipment. It has a dividend yield of 4.7%.

Archrock carries a Zacks Rank #2. The company has expected earnings growth of 195% for current year. The Zacks Consensus Estimate for the current year has improved by 280% over the last 60 days.

Kohl’s Corp. (NYSE:KSS) is a leading retailer in the United States. It has a dividend yield of 4.2%.

Kohl’s carries a Zacks Rank #2. The company has expected earnings growth of 25.3% for current year. The Zacks Consensus Estimate for the current year has improved by15.6% over the last 60 days.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>