Among the companies that are rewarding shareholders with dividend, in this article we are going to select three companies with the highest dividend yield. These companies are: Yuma Energy, Inc. (YUMA, Financial), Paragon Offshore PLC (PGN, Financial) and Seadrill Ltd (SDRL, Financial).
1) Yuma Energy, Inc. (YUMA, Financial)
Paying almost 134% dividend yield, Yuma Energy is on the top of yielding stocks. The company operates as an oil and gas company that focuses on the exploration for, and development of, conventional and unconventional oil and gas prospects in the U.S.
It has recently announced that its Board of Directors has declared a monthly cash dividend payment on the Company's 9.25% Series A Preferred Stock. That dividend will be $0.19270833 per share, which is equivalent to an annualized 9.25% per share, based on the $25.00 per share stated liquidation preference.
The firm is currently trading far below its 52-week-high, and only 6% above its 52-week-low. The 12-months range for the stock is $1.01 – $6.10. Yuma Energy has a price to book ratio of 1.3 versus industry average of 1.2. The oil company is currently valued at $75.3 million and its share price closed the last trading session at $1.14.
2) Seadrill Ltd (SDRL, Financial)
Seadrill is an offshore drilling contractor, which provides offshore drilling services to the oil and gas industry worldwide.
Seadrill has an annual dividend of $4, so with the actual closing price we get 41% dividend yield. The company has suspended dividends in November in a hard decision made by billionaire John Fredriksen in order to save about $2 billion a year. That cash could be used in projects or assigning it to acquisitions of distressed companies for example.
When compared to its closing price of one year ago, the share price has plummeted by 71%. Nonetheless, the largest shareholder of Seadrill was Israel Englander, which upped its stake by 28.471% on the quarter to 9.18 million shares held as of the end of 2014. Another fund that owned shares of this company was Ken Griffin‘s Citadel Investment Group, holding 3.58 million shares, up by 673% on the quarter. The value of the stake amounted to $42.75 million as eof the end of 2014.
3) Paragon Offshore PLC (PGN, Financial)
The Texas-based company provides offshore drilling rigs. It has showed strong operating results in the fourth quarter of 2014, said Randall D. Stilley, President and Chief Executive Officer. He also said that the firm executed successfully the acquisition of Prospector, in order to renew the jackup fleet. Paragon´s dividend yield is 40%, and it has repurchased senior notes below par value. Further, compared to its closing price of one year ago, the share price has plunged by 90%.
Final Comments
Investors should pay attention no to simply stick to the dividend yield. As we have seen, if one company cuts the dividend, as it was the case of Seadrill. A reading of this is that the firm´s dividend is not a priority.
Finally, it should be noted that companies that pay the highest dividends are not the best choices. The three dividend players above are showing a sharp drop in their prices in the stock market.
Disclosure: As of this writing, Omar Venerio did not hold a position in any of the aforementioned stocks.
