Prudent picks for high income

We focus on expansive diversification, which minimizes the risk of individual stock ownership, while maximizing the likelihood of finding the truly big winners among the undervalued masses.

With that in mind, here's two high-yielding buys from among our latest recommendations: Anworth (ANH) and United Online (UNTD).
Anworth is a mortgage real estate investment trust (REIT) focused primarily on U.S. mortgage-backed securities.
These holdings are issued or guaranteed by an agency of the U.S. (Ginnie Mae) or a U.S. government sponsored entity (Fannie Mae or Freddie Mac).

We believe the current operating environment remains favorable for ANH due to a relatively steep yield curve, available financing, low interest rates, slower than expected prepayment rates and inexpensive hedging options.

ANH shares trade about 10% below book value and offer a whopping 14.5% dividend yield.

As for United Online, this parent company is relatively unknown; however, its brands are pervasive in the online world: FTD Flowers, Juno, NetZero and Memory Lane (formerly Classmates.com).

Our investment thesis for UNTD has always focused on the company�s incredible dividend payout, today standing at 7.6%.

Importantly, the dividend continues to be supported by sizeable cash flows. The company has also made significant progress in paying down debt over the past year.

While UNTD is still admittedly finding its footing in some of its newer endeavors, commitment to its juicy dividend and the extremely inexpensive valuation metrics make it an appealing technology value play, especially given the stock�s recent underperformance.