This 6%+ FTSE 100 high yielder and 6%+ income stock could help you retire early

The last six months have been rough for investors in City of London Investment Group (LSE: CLIG), with the share price down around 10% amid emerging stock market uncertainty. They will be smiling today, with the stock up 2.5% in early trading after management announced a 10% increase in funds under management to £3.9bn for its financial year to 30 June.

Come on City

The specialist asset management group, which focuses on emerging markets and closed-end funds, announced a 10% rise in pre-tax profits of £12.8m, slightly lower than expected, while earnings of £10.1m were slightly ahead. Basic earnings per share (EPS) are expected to have risen 7% to 39.5p.

City of London is an attractive stock for income seekers and there was more good news on that this morning, with a 1p hike in the final dividend raising it to 18p, or 27p for the year, a rise of 8%. Dividend cover will be almost 1.5 times for the second consecutive year, above its rolling five-year target of 1.2 times. These positive numbers come despite the recent struggles afflicting emerging markets.

Nice discount

Brokers are impressed by the results, with Hardman and Co pointing out that City of London has proved to be more robust than rival emerging market fund managers, helped by good performance and strong client servicing. It also admired its valuation of 9.9 times earnings, which puts it at a discount to its peer group.

My Foolish colleague Rupert Hargreaves notes that it has no net debt and and £16.4m of cash, enough to cover the dividend for two-and-a-half years. I would also like to point out that it offers an appealing historical yield of 6.6% (forecast to hit 6.8%), while warning that further emerging market volatility could hit performance and drive outflows. Operating margins of 37.6% also encourage, so long as emerging markets hold up.

Viva Aviva

Insurance behemoth Aviva (LSE: AV) has also had a bumpy time lately, the stock trading 10% lower than one year ago, but just look what that share price slippage has done to its yield. The FTSE 100 stalwart now trades at a forecast yield of 6%, covered twice, making it one of the most enticing income plays on the index.

It falls short on share price growth, with today’s 492p just below its pre-crisis levels of a decade ago, when it topped 500p. It is up just 34% in the past five years, whereas a FTSE 100 tracker would have given you 38% over the same period. However, that generous income still gives it the edge, whereas the index currently yields just 3.84%.

Well covered

Peter Stephens reckons now may be the perfect time to buy into Aviva, with dividends expected to rise by 9.2% per annum in the next two financial years. Given current strong cover, that looks sustainable and management is keen to reward its loyal investors.

Aviva’s plan to spend £2bn of excess capital should reward shareholders with £600m in share buybacks, alongside £900m spent on cutting debt and £500m on bolt-on acquisitions. With City analysts forecasting EPS growth of a whopping 68% this year, followed by 8% in 2019, there is new life in Aviva.

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harveyj 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.