3 High-Yield Stocks Everyone Should Consider Buying

Markets Motley Fool

A single high-yield stock that fits every investor's needs isn't likely to be found. However, stocks that pay handsome dividends and offer conservative if not spectacular growth have a place in many a portfolio. Three that fit that criteria are tech giant Intel (NASDAQ: INTC), global infrastructure king Brookfield Infrastructure Partners (NYSE: BIP), and real estate investment trust leader MGM Growth Properties (NYSE: MGP).

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Short-term hiccup creates value and income

Tim Brugger (Intel): It's been a so-so year thus far for Intel, which isn't surprising given the manner in which it kicked off 2017. It's first-quarter revenue of $14.8 billion set yet another record, but slowing growth in its all-important data center unit was disheartening.

As a self-proclaimed "data center first" microprocessor provider, Intel generated $4.2 billion from its key division in Q1, a mere 6% year-over-year improvement. But it turns out that was a hiccup, not a harbinger of things to come.

Last quarter's revenue of $14.8 billion was its best Q2 result ever, and the data center group reported $4.4 billion in sales, up 9% over a year ago. Not exactly stellar, but certainly a change for the better. Most of Intel's other units also had a solid Q2, including PC sales, which rose 12% to $8.2 billion. It's become increasingly apparent that PCs aren't dead, but are more likely near bottoming out.

PC's aside, Intel is looking ahead to not only cloud-based data centers, but cutting-edge markets including artificial intelligence (AI), smart cars and the Internet of Things (IoT), along with virtual reality (VR), among other burgeoning growth opportunities.

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Despite its stellar 3.15% dividend yield, it ongoing transition to focus on fast-growing markets, and some record-setting revenue quarters, Intel is trading  at a mere 11 times forecast earnings, and is undervalued compared to its peers by nearly every metric. For these reasons, Intel is a high-yield stock that most every investor should consider.

Overlooking this stock could cost you double-digit returns

Neha Chamaria (Brookfield Infrastructure Partners): If you're seeking high yields, a low-risk business with strong dividend growth potential is perhaps the best combination you can ask for. Brookfield Infrastructure Partners offers just that.

As a company that owns and operates a wide range of essential infrastructure assets like power transmission lines, toll roads, gas pipelines, and cellular towers, Brookfield Infrastructure doesn't have to worry much about economic downturns. Thanks to the resilient nature of its business, its funds from operations have grown steadily over the years. Dividends have risen concurrently, and the stock's yield has been strong; currently, it stands at 4%.

Further, there's tremendous room for Brookfield Infrastructure to increase those dividends. The company recently reported a 20% year-over-year jump in FFO for the six months that ended June 30, driven primarily by organic growth. It currently has a nearly $2.4 billion backlog of organic-growth projects. That, coupled with its aggressive moves to acquire quality assets globally, should drive the company's FFO even higher. And given its target FFO payout ratio range of 60% to 70%, dividends should grow as well.

In fact, Brookfield Infrastructure is targeting annual dividend growth of 5% to 9% in the long run. Combine that with a dividend yield of around 4%, and investors could easily end up with double-digit returns.

A bet on gambling paying off for years to come

Rich Duprey (MGM Growth Properties): MGM Resorts International -- like fellow global casino operators Las Vegas Sands and Wynn Resorts -- is exceptionally positioned in the world's two biggest gaming markets, Macau and Las Vegas. But MGM is less tied to the Chinese market than its major rivals.

The vagaries of the political landscape in Macau, the only place in China where gambling is legal, make it more tolerated than accepted. But because MGM derives only around 18% of its revenues from the territory, it is less susceptible to the economic volatility that it sometimes endures. All of which makes an investment in MGM Growth Properties, the real estate investment trust MGM created to own its U.S. casino real estate while it focused on operating those casinos, an intriguing investment.

The two companies are inextricably linked, as MGM still owns 76% of the REIT, and though the casino operator still relies heavily upon Vegas for its revenues (53% of the total), it continues to build out regional properties, which make it a better growth prospect.

The benefits of REITs are two-fold: They produce steady, predictable revenue streams from the lease payments, and they are required by law to pay out at least 90% of their profits to shareholders in the form of dividends. MGM Growth Properties' current dividend of $1.58 per share yields 5.8%. It is a bet on its parent's growth in the domestic market, and spreading the risk over more markets. Those are odds investors can take.

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Neha Chamaria has no position in any of the stocks mentioned. Rich Duprey has no position in any of the stocks mentioned. Tim Brugger has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and Intel. The Motley Fool has a disclosure policy.