Three High-Yield Dividend Stocks to Consider

The good news is Duquesne Light Holdings (DQE), Unitil (UTL) and General Motors (GM) pay dividends with a yield greater than 5%. The bad news is all three stocks have some element of risk. The payout ratios ($ dividend/$ earnings) for DQE and UTL are above 90% and GM is on a prolonged price downside.

But, they are in solid businesses and have a long history of paying dividends, so these stocks could make up a small portion of a dividend reinvestment or income portfolio.

Duquesne Light Holdings is the holding company for Duquesne Light Company, an electric utility that serves more than half a million customers throughout southwestern Pennsylvania including Pittsburgh. DQE pays a $1.00 dividend, which translates to a 5.44% dividend yield. DQE cut their dividend in June 2002 from $1.68 to the current $1. The stock has rebounded from the July 2002 low of $11.29 to $18.41 as of January 14, 2005. The payout ratio is 93% ($1/$1.08). DQE's price pattern has been in a sideways pattern since January 2004.

Unitil is a holding company that provides electricity to southern New Hampshire and electricity and natural gas to northern Massachusetts. Its current dividend is $1.38, a 5.05% yield. Its payout ratio is 95%. UTl's price pattern is on the upside.

General Motors pays a $2 dividend, a 5.36% yield, on earnings of $5.38, a low 37% payout ratio. GM is a cash machine but its regular dividend had been the same since 1997. And the stock is on a multi-year downside.