High-Yield Stocks Offer Attractive Opportunities Amid Market Volatility

The author uses dividend yield as one of their key metrics to identify high-conviction investment opportunities.

Dividend yield is calculated by dividing the annualized dividend by the stock price, but it tells more than just expected income from an investment. The author starts with a company's dividend history, looking for at least 10 annual increases and ideally being a Dividend King with 50 or more years of consecutive dividend growth.

The author believes that a high yield can indicate a good entry price, but it's not foolproof. Companies like Procter & Gamble (PG), Federal Realty (FRT), and Enbridge (ENB) have historically high yields, indicating strong businesses with consistent dividend growth.

A great company can still be a bad investment if the price is too high, as Benjamin Graham said. The author has found that dividends and dividend yield consistently identify great opportunities for them, even during recessions and market downturns.