11 Corporate Bonds Yielding 8% Or More

Given the moderate economic recovery, the outlook for corporate bonds has improved dramatically. On one hand, the rate of defaults initially anticipated during the apocalypse in early 2009 will surely be much lower than feared. Conversely, bond prices have rallied, bringing many double-digit yield opportunities back to earth. However, there are still several recognizable blue-chip names with decent ratings (BBB and better) that exceed 8% yield with the opportunity for upside on the bond price as the economy recovers further. As outlined in a similar high yield bond list from June 2009, none of 15 high yielders highlighted have defaulted or show near term solvency risk.

Below, I’ve selected 11 blue-chips worth a look. With the long-term return of stocks around 8-10% (depending on which study you look at, how dividends are reinvested, etc.) and with stocks coming off the most prolific rally in our generation (S&P500 up 65% from pivot bottom), the prospect of a steady 8% yield with price appreciation to boot isn’t too shabby.

Yield % - Company - Rating (Fitch)
8.1 ——–HUMANA— BBB
8.1 ——–SUNOCO—- BBB
8.2 ——–WHIRLPOOL-BBB
8.3 ——–DISCOVER—BBB
8.3 ——–INTL PAPER-BBB
8.4 ——–ALCAN——-BBB
8.5 ——–DOW CHEM.–BBB
8.5 ——–ALTRIA——BBB
8.7 ——–VALERO—–BBB
9.0 ——–SIMON PRTY-A
9.3 ——–MOTOROLA-BBB

If interested in any of these issues specifically, you should be able to search your online broker’s available issues. Often times, rather large sums are required for a bond purchase. Alternatively, rather than putting large sums into one particular issue, you should check out a High Yield Bond ETF which is currently yielding 9.8%. If seeking tax-free income, there are some good Muni Bond ETFs that don’t yield quite as much, but on a tax equivalent basis, high bracket investors may be snatching these up with tax rates anticipated to increase as part of Obama’s agenda.

Disclosure: No position in any bond issues. Author does hold High Yield Bond ETF cited.