These 2 Dividend Stocks Have Double-Digit Yields -- but Are They Safe?
Investors who rely on income from their portfolios have had to deal with a conundrum. For years, interest rates on bonds and other traditional fixed-income securities fell to historically low levels, and most bondholders couldn't get enough income from their bonds to make ends meet. That forced a number of investors into the stock market, where some companies paid higher dividend yields but which involved having to take on the added risk that stocks entail.
In the natural resources sector, we've seen huge price increases in key commodities lift the prospect of many companies. The improved outlook has in many cases caused not only share prices to rise but also led to companies paying out more to their shareholders in dividends. Yet with some of the better-known players in energy and materials now paying out double-digit percentage yields, it's reasonable to ask whether those dividends are too good to last. Below, you'll learn more about two companies, Rio Tinto (NYSE: RIO) and BP Prudhoe Bay Royalty Trust (NYSE: BPT), and find out whether their impressive dividend yields look sustainable.
Rio Tinto is one of the world's largest and most successful mining companies. With a market capitalization approaching $100 billion, the U.K.-headquartered Rio Tinto offers exposure to precious metals like gold, base metals like copper and aluminum, and rarer products like lithium and diamonds. From its corporate office in London, Rio Tinto oversees operations around the world.
Source Fool.com
