Yield-seeking investors who need cash to live on are being punished by the U.S. Federal Reserve's loose monetary policy. The concept of a free market – or of a natural, risk-free rate of return – has been obliterated by the central bank, which has driven the benchmark U.S. Treasury yield down to a meager 2.5%.
So, where can an investor go to find both yield and real assets?
I would suggest looking at components of the Dow Jones Industrial Average. The Dow is full of companies that pay real yields on their common stock. And right now, Verizon Communications Inc. (NYSE: VZ) is the highest-yielding stock in the Dow Jones index. The stock is yielding more than 6% per year.
Verizon has a market capitalization of $91 billion and an enterprise value of $144 billion. While the company is fully levered up at the balance sheet, it is generating a staggering $63.5 billion in gross profit. This is one of the largest companies in the world, and should be able to weather the current economic upheaval.