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2 Powerful 9-11% Yielding Income Machines: Only One Is A Buy

Seeking Alpha
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⚡ Quantum Brief
Market volatility has created high-yield opportunities, but analyst Samuel Smith warns not all are sound investments, comparing two 9-11% yielders with divergent outlooks. Western Midstream Partners (WES) emerges as a strong buy due to overlooked fundamentals, including stable cash flows and resilient sector positioning amid macroeconomic uncertainty. Capital Southwest (CSWC) offers an 11% yield, yet Smith avoids it, citing structural risks like weak earnings coverage and potential dividend sustainability issues. Smith, a former VP at dividend research firms, leverages his engineering and machine learning background to assess yield safety, prioritizing long-term stability over short-term gains. The analysis reflects a broader trend: high yields alone don’t guarantee value, requiring scrutiny of underlying business health and macroeconomic exposure.
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Samuel SmithInvesting GroupFollow5ShareSavePlay(10min)Comment(1)SummaryDespite significant market volatility creating seemingly attractive high yields across multiple sectors, not all income machines are created equal.I detail the factors that the market is overlooking that make Western Midstream Partners (WES) a compelling buy right now.I discuss the key factors that explain why an 11% yield is not enough to make me want to buy Capital Southwest (CSWC).Looking for a portfolio of ideas like this one? Members of High Yield Investor get exclusive access to our subscriber-only portfolios. Learn More » Hammad Khan/iStock via Getty Images Right now, thanks to significant volatility in the markets and the broader macro environment, there are several high-quality companies that offer high yields. However, not all of them are buys, and in this article, I will discuss two of some of the more popular high-yielding incomeThis article was written bySamuel Smith49.42K FollowersFollowSamuel Smith has a diverse background that includes being lead analyst and Vice President at several highly regarded dividend stock research firms and running his own dividend investing YouTube channel. He is a Professional Engineer and Project Management Professional and holds a B.S. in Civil Engineering & Mathematics from the United States Military Academy at West Point and has a Masters in Engineering from Texas A&M with a focus on applied mathematics and machine learning.Samuel leads the High Yield Investor investing group. Samuel teams up with Jussi Askola and Paul R. Drake where they focus on finding the right balance between safety, growth, yield, and value.

High Yield Investor offers real-money core, retirement, and international portfolios. The service also features regular trade alerts, educational content, and an active chat room of like-minded investors. Perspective: "Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal; for where your treasure is, there your heart will be also ... For what will it profit a man if he gains the whole world and forfeits his soul?" ~ Jesus (Matthew 6:19-21; 16:26)Learn moreAnalyst’s Disclosure: I/we have a beneficial long position in the shares of WES either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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