In this article, we will take a look at the 10 best high yield dividend stocks to buy in June.
With the current economic risks brought on by the COVID-19 pandemic, investors are gravitating towards buying dividend-paying growth stocks that have a stabilized background for a regular flow of income.
In a study published by investment company Tweedy, Browne Fund, Inc., high dividend yield equities were shown to have delivered better returns than their low-yield counterparts. The study showed that high-yield stocks produced a 13.7% annual equal-weighted return with a 15.5% standard deviation. In comparison, the low-yield stocks returned 9.0% with a standard deviation of 29.1%.
Dividend-Paying Stocks in the Utility Industry
Most utility stocks provide increasing dividends due to the company’s sustained profitability over time, given its critical importance to the economy. One good example of a utility stock that continues to thrive is NiSource Inc (NYSE:NI). NiSource was founded in 1912 and has grown its user base in seven states totaling 3.5 million natural gas consumers and 500,000 electric customers. NiSource Inc (NYSE:NI) posted its non-GAAP net operating earnings of $304.8 million in the first quarter of 2021, up from $290.9 million in the fourth quarter of 2020. NI shares currently trade for $25.75 and have a P/E ratio of 67.23. The current dividend yield is 3.43%. The 52-week price range of NiSource Inc (NYSE:NI) is $21.09-26.60. Shares of NI jumped 11.4% over the last twelve months.
An outstanding high-yield stock in the utility industry worth checking out is midstream energy company Antero Midstream Corporation (NYSE:AM). Antero Midstream Corporation was founded in 2013 and was formed by Antero Resource Corporation (NYSE:AR) to meet growing demands for natural gas. Antero Midstream Corporation (NYSE:AM) posted its adjusted EBITDA of $219 million in the first quarter of 2021, a 1% increase from $217 million in the first quarter of 2020. Antero Midstream Corporation’s (NYSE:AM) current dividend yield is 8.74%. The 52-week price range of Antero Midstream Corporation (NYSE:AM) is $4.77-10.57.
Companies That Continue to Increase Dividends
Many companies were forced to suspend or cancel dividends during the height of the COVID-19 pandemic. However, according to an article published by global asset manager Janus Henderson, in the first quarter of 2021, only 18% of companies cut their dividend compared to 34% in the same period of 2020. One company that thrived during the pandemic is consumer staple manufacturer The Procter & Gamble Company (NYSE:PG). In April 2021, The Procter & Gamble Company raised its dividend by 10%, marking its 65th year of consistently increasing dividends. The Procter & Gamble Company (NYSE:PG) currently trades for $135.79 and has a P/E ratio of 24.97. The current dividend yield is 2.58%. The 52-week price range of The Procter & Gamble Company (NYSE:PG) is $113.76-146.92. Shares of PG jumped 17% over the last twelve months.
Another notable stock that raised its dividend during the pandemic is Johnson & Johnson (NYSE:JNJ). Despite the pandemic, in April 2020, Johnson & Johnson raised its dividend by 6.3%. In April 2021, JNJ announced a 5% increase in its quarterly dividend. Johnson & Johnson (NYSE:JNJ) currently trades for $167.08 and has a P/E ratio of 29.51. The current dividend yield is 2.56%. The 52-week price range of Johnson & Johnson (NYSE:JNJ) is $133.65-173.65. Shares of JNJ jumped 17% over the last twelve months.
But dividend investing space is experiencing a lot of changes, just like the financial industry. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is a list of the 10 best high yield dividend stocks to buy in June.
Best High Yield Dividend Stocks to Buy in June
10. Ares Capital Corporation (NASDAQ: ARCC)
Dividend Yield as of June 11: 8.01%
Number of Hedge Fund Holders: 15
New York-based investment company Ares Capital Corporation (NASDAQ:ARCC) ranks 10th on the 10 best high yield dividend stocks to buy in June list. Earlier this year, Ares Management Corporation subsidiary agreed to buy 100% of Black Creek Group’s U.S. real estate investment advisory business. The second-quarter dividend is $0.40 per share, which will be paid on June 30 to shareholders of record on June 15.
Ares Capital Corporation (NASDAQ:ARCC) posted its revenue of $390 million in the first quarter of 2021, up 1.65% from consensus estimates. ARCC shares currently trade for $19.89 and have a P/E ratio of 5.74. The current dividend yield is 8.01%. The 52-week price range of Ares Capital Corporation (NASDAQ:ARCC) is $13.15-19.93. Shares of ARCC jumped 25% over the last twelve months. On April 29, Wedbush maintained an Outperform rating on Ares Capital Corporation and raised the price target to $21.
9. Magellan Midstream Partners, L.P. (NYSE: MMP)
Dividend Yield as of June 11: 8.03%
Number of Hedge Fund Holders: 14
Ranking 9th in our list of the 10 best high yield dividend stocks to buy in June is Magellan Midstream Partners, L.P. (NYSE:MMP), a company that carries, markets, and distributes petroleum products. The company’s most recent quarterly dividend payment was issued on May 14. Magellan Midstream Partners, L.P. (NYSE:MMP) dividend increased 5.28% from the past year. In 2020, Magellan Midstream Partners LP sold three of its terminals to Buckeye Partners in a $250 million deal. The deal was made to reduce MMP’s US Atlantic Coast assets and focus on its Texas maritime activities.
Magellan Midstream Partners, L.P. (NYSE:MMP) posted its net income of $221.3 million in the first quarter of 2021, up from $287.6 million in the first quarter of 2020. Magellan Midstream Partners, L.P. shares currently trade for $51.20 and offer a dividend yield of 8.03%. The 52-week price range of Magellan Midstream Partners, L.P. (NYSE:MMP) is $32.61-52.42. Shares of MMP jumped 9% over the last twelve months.
Like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), Ares Capital Corporation (NASDAQ:ARCC), Antero Resource Corporation (NYSE:AR) and NiSource Inc (NYSE:NI), Magellan Midstream Partners, L.P. (NYSE:MMP) is one of the best dividend stocks to buy.
8. BlackRock TCP Capital Corp. (NASDAQ: TCPC)
Dividend Yield as of June 11: 8.04%
Number of Hedge Fund Holders: 8
Ranking 8th in the 10 best high yield dividend stocks to buy in June with finance company BlackRock TCP Capital Corp. (NASDAQ:TCPC). BlackRock TCP Capital Corp. functions as an outside-managed finance firm concentrated on middle-class financing. The second-quarter dividend is $0.30 per share, which will be paid on June 30 to shareholders of record on June 16. In 2018, BlackRock TCP Capital Corp. (NASDAQ:TCPC) purchased Tennenbaum Capital Partners, LLC., which enabled the business to obtain more resources to provide comprehensive solutions and enlarge the scale of private asset capabilities.
BlackRock TCP Capital Corp. (NASDAQ:TCPC) posted its total assets of $1.8 billion in the first quarter of 2021, up from $1.7 billion in the fourth quarter of 2020. TCPC shares currently trade for $14.97 and have a P/E ratio of 4.90. The current dividend yield is 8.01%. The 52-week price range of BlackRock TCP Capital Corp. (NASDAQ:TCPC) is $8.44-15.07. Shares of TCPC jumped 40% over the last twelve months. On February 26, Raymond James upgraded BlackRock TCP Capital to an Outperform rating and announced a price target of $14.
Like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), Ares Capital Corporation (NASDAQ:ARCC), Magellan Midstream Partners, L.P. (NYSE:MMP), Antero Resource Corporation (NYSE:AR) and NiSource Inc (NYSE:NI), BlackRock TCP Capital Corp. (NASDAQ:TCPC) is one of the best dividend stocks to buy.
7. PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT)
Dividend Yield as of June 11: 8.76%
Number of Hedge Fund Holders: 7
PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) ranks 7th in our list of 10 best high yield dividend stocks to buy in June. The company was founded in 2010 and operates as an investment company that utilizes floating rate senior secured loans. On May 13, JMP Securities maintained a Market Outperform on PennantPark Floating Rate Capital Ltd. and lowered the price target to $10.5.
PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) posted its net investment income of $9.9 million in the first quarter of 2021, decreasing from $11.7 million in the same period of 2020. PFLT shares currently trade for $13.05 and have a P/E ratio of 7.51. The current dividend yield is 8.74%. The 52-week price range of PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) is $7.70-13.09. Shares of PFLT jumped 47% over the last twelve months.
Like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), Ares Capital Corporation (NASDAQ:ARCC), Magellan Midstream Partners, L.P. (NYSE:MMP), Antero Resource Corporation (NYSE:AR) and NiSource Inc (NYSE:NI), PennantPark is one of the best dividend stocks to buy.
6. New Mountain Finance Corporation (NASDAQ: NMFC)
Dividend Yield as of June 11: 8.77%
Number of Hedge Fund Holders: 9
United States-based New Mountain Finance Corporation (NASDAQ:NMFC) ranks 6th in our list of the 10 best high yield dividend stocks to buy in June. New Mountain Finance Corporation operates as a business development firm specializing in financing middle-class enterprises in developing sectors. The second-quarter dividend is $0.30 per share which will be paid on June 30 to shareholders of record on June 16.
New Mountain Finance Corporation (NASDAQ:NMFC) posted its total investment income of $67.4 million in the first quarter of 2021, down from $74.1 million in 2020. NMFC shares currently trade for $13.57 and have a P/E ratio of 4.78. The current dividend yield is 8.91%. The 52-week price range of New Mountain Finance Corporation (NASDAQ:NMFC) is $8.74-13.60. Shares of NMFC jumped 38% over the last three months. On April 27, Wells Fargo maintained an Overweight rating on New Mountain Finance Corporation and raised the price target to $9.
Like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), Ares Capital Corporation (NASDAQ:ARCC), Magellan Midstream Partners, L.P. (NYSE:MMP), Antero Resource Corporation (NYSE:AR) and NiSource Inc (NYSE:NI), New Mountain Finance is one of the best dividend stocks to buy.
5. Sunoco LP (NYSE: SUN)
Dividend Yield as of June 11: 8.86%
Number of Hedge Fund Holders: 2
Ranking 5th in our list of 10 best high yield dividend stocks to buy in June is Sunoco LP (NYSE:SUN). Sunoco LP is a global seller of motor fuels on a wholesale basis. One of the most significant acquisitions of Sunoco LP (NYSE:SUN) was convenience stores from Speedway LCC. The company purchased stores to convert them into wholesale distribution hubs estimated to produce around 180 million per year gallons of fuel.
Sunoco LP (NYSE:SUN) posted its adjusted EBITDA of $157 million in the first quarter of 2021, down from $209 million in the first quarter of 2020. SUN shares currently trade for $37.28 and have a P/E ratio of 7.51. The current dividend yield is 8.86%. The 52-week price range of Sunoco LP (NYSE:SUN) is $22.52-37.43. Shares of SUN jumped 56.42% over the last twelve months. On May 13, Wells Fargo maintained an Underweight rating on Sunoco and raised the price target to $33.
4. Antero Midstream Corporation (NYSE: AM)
Dividend Yield as of June 11: 8.74%
Number of Hedge Fund Holders: 17
Ranking 4th in our list of 10 best high yield dividend stocks to buy in June is Antero Midstream Corporation (NYSE:AM). The midstream energy company was founded in 2013. On June 9, JonesTrading downgraded Antero Midstream Corporation to Hold.
Antero Midstream Corporation (NYSE:AM) posted its adjusted EBITDA of $219 million in the first quarter of 2021, a 1% increase from $217 million in the first quarter of 2020. AM shares currently trade for $10.36 and have a P/E ratio of 14.19. The current dividend yield is 8.74%. The 52-week price range of Antero Midstream Corporation (NYSE:AM) is $4.77-10.57. Shares of AM jumped 101.2% over the last twelve months.
Bonhoeffer Capital Management mentioned Antero Midstream Corporation (NYSE:AM) in its Q4 2020 investor letter: Here is what the fund said:
“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)
This includes our broadcast TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.
An example is Antero Midstream, whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream cash flows become more secured as Antero Resources has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero subordinated debt with a yield of 7.8%.”
3. Annaly Capital Management, Inc. (NYSE: NLY)
Dividend Yield as of June 11: 9.22%
Number of Hedge Fund Holders: 15
Ranking 3rd in the 10 best high yield dividend stocks to buy in June is Annaly Capital Management, Inc. (NYSE:NLY). Annaly Capital Management, Inc. operates as one of the primary mortgage real estate investment trusts in the United States. Earlier this year, the company signed a $2.33 billion deal with Slate Asset Management. The contract states that all commercial real estate assets of NLY will be sold to Slate Asset Management, including some of its representatives. The transaction is targeted to complete in the third quarter of 2021.
Annaly Capital Management, Inc. (NYSE:NLY) posted its net interest income of $763 million in the first quarter of 2021, up from $527 million in the fourth quarter of 2020. Annaly Capital Management, Inc. (NYSE:NLY) currently trades for $9.51 and offers a dividend yield of 9.22%. The 52-week price range of Annaly Capital Management, Inc. (NYSE:NLY) is $6.26-9.64. Shares of NLY jumped 45% over the last twelve months.
2. MPLX LP (NYSE: MPLX)
Dividend Yield as of June 11: 9.28%
Number of Hedge Fund Holders: 8
Ranking 2nd in our list of 10 best high yield dividend stocks to buy in June is MPLX LP (NYSE:MPLX). The Ohio-based midstream energy company was formed in a partnership with Marathon Petroleum Corporation (NYSE:MPC), founded in 2012. The company began publicly trading in October of the same year. In 2019, the company purchased Andeavor Logistics LP. The acquisition upscaled the company’s assets and provided the company with an advantage in the midstream sector.
MPLX LP (NYSE:MPLX) posted its adjusted earnings of $1.4 billion in the first quarter of 2021, up from $1.3 billion in the first quarter of 2020. MPLX shares currently trade for $30.19 and have a P/E ratio of 12.07. The current dividend yield is 9.28%. The 52-week price range of MPLX LP (NYSE:MPLX) is $15.05-30.22. Shares of MPLX jumped 72% over the last twelve months. On May 27, Credit Suisse maintained an Outperform rating on MPLX LP and raised the price target to $34.
1. Icahn Enterprises L.P. (NASDAQ: IEP)
Dividend Yield as of June 11: 14.18%
Number of Hedge Fund Holders: 4
Topping the 10 best high yield dividend stocks to buy in June is Icahn Enterprises L.P. (NASDAQ:IEP). The New York-based diversified holding company funds in the energy, automotive, packaging, real estate, and home fashion industries. In 2020, Icahn Enterprises L.P. (NASDAQ:IEP) subsidiary Icahn Automotive acquired automotive assistance company Tecnicentros Mundial. The purchase granted the company a more stable framework to provide to clients’ growing demand in the Puerto Rico island.
Icahn Enterprises L.P. (NASDAQ:IEP) posted its net sales of $2.2 billion in the first quarter of 2021, a significant increase from $1.8 billion in the same period of 2020. IEP shares currently trade for $56.19. The current dividend yield is 14.18%. The 52-week price range of Icahn Enterprises L.P. (NASDAQ:IEP) is $56.15-56.86. Shares of EIP jumped 16.5% over the last twelve months.
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Disclosure: None. 10 Best High Yield Dividend Stocks to Buy in June is originally published on Insider Monkey.
