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Here are 3 income stocks with very high dividend yields!

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While I enjoy hunting for growth, income stocks can also be a great way to accumulate wealth over the long term. To that end, I’ve found three companies with attractive dividends that I’m thinking of adding to my portfolio. Let’s take a closer look. 

A company as strong as iron?

Ferrexpo’s (LSE:FXPO) share price has suffered over the past few months on account of the ongoing war in Ukraine. At the time of writing, it’s trading at 143p.

Accordingly, the Ukraine-based iron ore producer’s dividend yield has shot up, currently standing at 27.91%. In 2021, the firm paid a dividend of $0.53 per share. 

Investment bank Credit Suisse recently upgraded the business to ‘outperform’ based on this attractive dividend yield. It also believes there’s a possibility that the share price will bounce back at some point.

At the end of June, the company announced that it had net cash of $177m with very little debt. As a potential investor, this is good news because it suggests that the firm has a high likelihood of making it through the war.

However, revenue and pre-tax profit fell by 31% and 88% respectively due to the issues caused by the war and the broader iron ore market.

On the whole, though, if the conflict does end soon then it’s possible that the shares could rebound.

Gaining exposure to oil

Diversified Energy Company (LSE:DEC) currently trades at 137p and paid a dividend of $0.17 per share last year.

At current levels, this means the firm has a dividend yield of 9.26%. For the six months to 30 June, the US-based oil company reported that production averaged 136,000 barrels of oil equivalent per day (boepd). This was up 26% year on year.

Given the high oil prices, which have only just slipped under $100 per barrel, the business has scope to profit from its increased production.

Furthermore, earnings were up by 48% over the same period to $244m. However, it registered a non-cash net loss of nearly $1bn, partially caused by hedging oil at lower levels.

Although net debt stands at $1.1bn, the firm has liquidity of $469m and even declared a second quarter dividend of ¢4.25 per share.

Posting a high dividend yield

Royal Mail Group (LSE:RMG) is an attractive prospect for income. With the shares at 275p, its dividend yield is 14.86%, inclusive of special dividends. Last year, it paid a total dividend of 40p per share.

The postal firm benefited from heightened parcel volumes during the pandemic and has been profitable over the long term. For instance, for the year ended March, between 2018 and 2022, pre-tax profit grew from £212m to £662m. 

However, it’s currently dealing with four days of strike action, involving about 115,000 workers. In addition, for the three months to 30 June, revenue fell 11.5% year on year. It also booked an adjusted operating loss of £92m.

On the flip side, it maintained its full-year outlook for “high single-digit” revenue growth and is taking measures to manage costs, like removing 700 manager level roles.

Overall, while each company has challenges, I feel their high dividends are too appealing to resist, so I’ll add all three firms to my portfolio soon.

The post Here are 3 income stocks with very high dividend yields! appeared first on The Motley Fool UK.

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Andrew Woods has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.