Dividend stocks are a stand-out choice for investors as they allow you to profit in two ways. Firstly, is in the distributions or dividends paid out by the company, usually every quarter. Secondly, you will profit from the appreciation of your stock.
One way to identify high-yield dividend stocks is by looking at the individual company's dividend yield. This is a ratio, expressed as a percentage, showing how much a stock company pays to investors in dividends each year relative to its stock price. One strategy to consider is spread betting which is a form of short-term derivative trading.
Against the volatility that has marked the start of the year, here is a list of high-yield dividend stocks worth keeping your eye on.
At a current 12.1% forward dividend yield, Annaly Capital Management takes the lead among high-yield dividend stocks. This diversified capital management company finances and invests in both residential and commercial assets, with assets totaling around $89 billion. In addition to residential real estate and mortgage-backed securities (MBS), Annaly Capital Management is also a player in middle-market financing.
At a 10.62% dividend yield, AGNC Investment Corp is one of the high-yield stocks. The company is a mortgage real investment trust, REIT, with primary investments in agency MBS. These MBS are mainly federal loans backed by different government-sponsored enterprises.
As a REIT, AGNC Investment Corp receives tax benefits and is required to ensure 90% of all taxable income the company makes goes to investors. This, in itself, guarantees a consistent dividend payout. Again, as an investor, it will undoubtedly give you some peace of mind given the reduced risk tied to this and other stocks with federal backing.
This mortgage REIT's dividend yield currently stands at an impressive 9.9%. Ellington Financial invests in commercial mortgages and both commercial and residential loans. In fact, a significant share of its portfolio is about two-thirds is in residential mortgages.
The company got into paying monthly dividends back in 2019. The pangs of the pandemic forced Ellington to cut back on this payment, but the stock has since bounced back, and the company has built its dividend yield to the current numbers.
Broadmark Realty is a REIT providing financing for real estate developers and investors. The company's portfolio continues to grow steadily. It provides loans to fund residential and commercial real estate acquisition or development. At Broadmark Realty Capital, the numbers are at a 9.94% forward dividend yield.
Prospect Capital Corp's model puts it as a business development company, providing capital to companies and private sponsors for different purposes, including acquisitions and leveraged buyouts. It has a diverse portfolio, comprising 127 companies in various industries. As a business development company, and much like a REIT, Prospect Capital Corp is required to pay out no less than 90% of its taxable profits to investors. The company records a 8.67% dividend yield. You can find other high dividend stocks with HALO Technologies.
From its days as CentruLink, Lumen Technologies has been on the radar of high-yield investors for a long while now. The company provides an integrated platform bringing together cloud connectivity, network assets, voice, and security solutions.
Lumen Technologies' numbers currently put the company’s stock at 8.3% dividend yield. Currently, the dividend payout accounts for about two-thirds of the company's total earnings. While there isn't much growth potential for the stock, you can truly depend on the dividends from this stock.
For all these high-yield dividend stocks listed, it's also crucial to realize that volatility over short periods is common for a dividend stock. Thus, always look at stocks with a strong dividend track record as dividend stocks are indeed a long-term investment.