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5 High-Yield Dividend Stocks That Are Must-Buys Right Now

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Investors seem to have gained some confidence from an upbeat corporate earnings season but the spread of the more contagious coronavirus variant and subsequently its devastating impact on global economic growth vis-à-vis the stock market has set off alarm bells at Wall Street.

The spread of the delta variant may again lead to the government taking stringent measures, which unquestionably doesn’t bode well for the economic recovery made so far. From New Zealand to China’s ports as well as the United States have been witnessing a rise in coronavirus cases. In the United States, the highly-transmissible delta variant is spreading in places with a comparatively low vaccination rate.

In fact, the spread of the delta variant has started to show its impact on the U.S. economy. Retail sales in the United States declined 1.1% last month versus economists’ estimate of a drop of 0.3%, according to the Commerce Department, citing a Barron’s article. Americans continued to trim spending on especially big-ticket items, thanks to concerns about the spread of the delta variant and its impact on the economy.

Policymakers at the Federal Reserve, by the way, lately indicated that they may in the near term withdraw the $120 billion-a-month asset purchasing program aimed to keep the economy afloat, particularly after it took a massive hit due to the coronavirus pandemic. In fact, the majority of the policymakers now think that the wind-down of the central bank’s bond-buying program may begin later this year.

In fact, the minutes of the Fed’s July meeting read “most participants noted that …it could be appropriate to start reducing the pace of asset purchases this year,” as mentioned in another Barron’s article. Of course, the Fed’s stimulus taper talks did little to boost investors’ sentiments.

China’s crackdown on Internet behemoths like Alibaba and Baidu also failed to buoy investors’ spirits. China’s economy is also in the doldrums and that may have an impact on companies with considerable exposure to China. The countries’ sales at retail outlets as well as industrial production numbers were disappointing of late. Meanwhile, in places like Afghanistan, political turmoil has erupted and that might derail global economic growth, leading to stock market gyrations worldwide.

The month of August has a reputation of being notorious for stocks. For instance, since 1928, the broader S&P 500’s average return for the months of August, September and October has been a negative 0.03%, the worst three-month period for the index, as mentioned in a MarketWatch article (read more: "Dog Days" of August Settle into the Market).

But even though the stock market has entered its most troublesome stretch of the year and an array of factors impacting the market, investors shouldn’t steer clear of the stock market. Instead, they should focus on investing in high-yield dividend players with sustainable business models and a long track of profitability. These stocks are also unfazed by market volatility.

We have, thus, highlighted five such stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and provide high yields.

Artisan Partners Asset Management Inc. (APAM - Free Report) is an investment management firm focused on providing high-value added, active investment strategies to clients globally. The company has a Zacks Rank #2. It has a dividend yield of nearly 8.2%, while its five-year average dividend yield is 8%. The company’s expected earnings growth rate for the current year is 50.2%.

Gladstone Investment Corporation (GAIN - Free Report) is an investment company that seeks to make equity-type investments in small and mid-sized private businesses in the United States. The company has a Zacks Rank #2. It has a dividend yield of 5.7%, while its five-year average dividend yield is 7.7%. The company’s expected earnings growth rate for the current year is 24.6%.

Hess Midstream Partners LP (HESM - Free Report) is a master limited partnership company. The company has a Zacks Rank #2. It has a dividend yield of 8.4%, while its five-year average dividend yield is 7.1%. The company’s expected earnings growth rate for the current year is 19.1%.

Vector Group Ltd. (VGR - Free Report) is principally engaged in the manufacture and sale of cigarettes and information processing systems. The company has a Zacks Rank #1. It has a dividend yield of almost 5.6%, while its five-year average dividend yield is 9.4%. The company’s expected earnings growth rate for the current year is 150%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Redwood Trust, Inc. (RWT - Free Report) is a self-advised and self-managed real estate investment trust. The company has a Zacks Rank #2. It has a dividend yield of 5.9%, while its five-year average dividend yield is 8.1%. The company’s expected earnings growth rate for the current year is 3,125%.