In this article, we will be taking a look at 10 dividend stocks with over 9% yield. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Dividend Stocks with Over 9% Yield.
Whether you are an avid investor looking to diversify your portfolio with a range of stocks, dividend-paying and otherwise, or an income investor looking to set up a stable passive income stream for yourself to help in meeting end-of-the-month expenses and retirement expenditures, dividend stocks will be among the best options available to you. Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), among a range of others, dividend stocks can often help individual investors make their fortune. For instance, billionaire Warren Buffett, a renowned value investor, was reported this August to have made about $4.6 billion merely through dividends. As such, dividend investing is a strategy one shouldn’t overlook all that easily.
When looking at where to invest, however, it’s important to take some vital factors into account. This is the case for any investor, really. For instance, value investors will consider factors like the price-to-book ratio, or the P/B ratio, hardcore income investors will take into account the number of years of dividend increases, and so on. But the question at the end of the day remains: does yield truly matter?
Well, research has shown that yield does indeed matter when one is looking at dividend stocks. Let’s look at one study, in particular, published by Wellington Management. The study divided the stocks in question into five quintiles on the basis of their dividend yields, with stocks in the first quintile being the highest yielders, and those in the fifth quintile naturally being the lowest yielders. The study thus proved that between 1930 and 2020, of the dividend stocks studied, those in the first quintile managed to outperform the S&P 500 about 66.7% of the time during the period studied. When compared to stocks in the 4th and 5th quintile, the superiority of higher-yielding stocks stood stark, as stocks in these quintiles outperformed the S&P 500 by about 44.4% of the time, each. And while these observations thus prove that all dividend stocks, regardless of yield, do manage to outperform the benchmark S&P 500 index an impressive number of times, those that have higher yields tend to do so more often, clearly establishing a precedent.
Investing has become difficult by the day, even for the smart money. 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 July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). 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.
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Without further ado, let’s take a look at the 10 dividend stocks with over 9% yield.
Our Methodology
Insider Monkey tracks the data of about 873 hedge funds, and we have used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Dividend Stocks with Over 9% Yield
10. Antero Midstream Corporation (NYSE: AM)
Number of Hedge Fund Holders: 16
Dividend Yield: 9.55%
Antero Midstream Corporation (NYSE: AM), an oil and gas storage and transportation company, ranks 10th on our list of dividend stocks with over 9% yield. The company operates through its Gathering and Processing, and Water Handling segments, and is based in Denver, US.
Morgan Stanley just this March upgraded shares of Antero Midstream Corporation (NYSE: AM) from Underweight to Equal Weight, while raising the price target on Antero Midstream Corporation (NYSE: AM) shares from $6 to $11 as well.
In the second quarter of 2021, Antero Midstream Corporation (NYSE: AM) had an EPS of $0.23, beating estimates by $0.01. The company’s revenue was $232.79 million, up 5.94% year over year and beating estimates by $11.90 million. Antero Midstream Corporation (NYSE: AM) has gained 4.63% in the past 6 months and 27.39% year to date.
By the end of the second quarter of 2021, 16 hedge funds out of the 873 tracked by Insider Monkey held stakes in Antero Midstream Corporation (NYSE: AM) worth roughly $106 million. This is compared to 17 hedge funds in the previous quarter with a total stake value of approximately $123 million.
Bonhoeffer Capital Management, a value-oriented investment management firm, mentioned Antero Midstream Corporation (NYSE: AM) in its fourth-quarter 2020 investor letter. Here’s what they 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%.”
Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), Antero Midstream Corporation (NYSE: AM) is a good stock to invest in.
9. Ellington Financial Inc. (NYSE: EFC)
Number of Hedge Fund Holders: 7
Dividend Yield: 9.62%
Ellington Financial Inc. (NYSE: EFC), a mortgage real estate investment trust, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the US. The company ranks 9th on our list of dividend stocks with over 9% yield.
BTIG holds a Buy rating on shares of Ellington Financial Inc. (NYSE: EFC) as of this May. The firm also raised its price target on the stock to $19.
In the second quarter of 2021, Ellington Financial Inc. (NYSE: EFC) had an FFO of $0.51, beating estimates by $0.05. The company’s revenue of $45.89 million was up 16.82% year over year and beating the previous quarter’s $40.08 million revenue as well. Ellington Financial Inc. (NYSE: EFC) has gained 17.29% in the past 6 months and 28.22% year to date.
By the end of the second quarter of 2021, 7 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ellington Financial Inc. (NYSE: EFC) worth roughly $45 million. This is compared to 6 hedge funds in the previous quarter with a total stake value of approximately $39 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), Ellington Financial Inc. (NYSE: EFC) is a good stock to invest in.
8. PennyMac Mortgage Investment Trust (NYSE: PMT)
Number of Hedge Fund Holders: 11
Dividend Yield: 9.67%
PennyMac Mortgage Investment Trust (NYSE: PMT) is a specialty finance company that operates as a mortgage real estate investment trust. The company ranks 8th on our list of dividend stocks with over 9% yield and works through its Credit Sensitive Strategies, Interest Rate Sensitive Strategies, and Correspondent Production segments.
As of this June, Barclays holds an Equal Weight rating on shares of PennyMac Mortgage Investment Trust (NYSE: PMT). The firm also raised its price target on PennyMac Mortgage Investment Trust (NYSE: PMT) shares to $19.
In the second quarter of 2021, PennyMac Mortgage Investment Trust (NYSE: PMT) had an FFO of $0.32, missing estimates by $0.27. The company’s revenue was $121.57 million, also missing estimates by $49.98 million. PennyMac Mortgage Investment Trust (NYSE: PMT) has however gained 0.62% in the past 6 months and 13.95% year to date.
By the end of the second quarter of 2021, 11 hedge funds out of the 873 tracked by Insider Monkey held stakes in PennyMac Mortgage Investment Trust (NYSE: PMT) worth roughly $10.4 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $16 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), PennyMac Mortgage Investment Trust (NYSE: PMT) is a good stock to invest in.
7. Sachem Capital Corp. (NYSE: SACH)
Number of Hedge Fund Holders: 4
Dividend Yield: 10.04%
Sachem Capital Corp. (NYSE: SACH), a real estate finance company, is next on our list of dividend stocks with over 9% yield, ranking 7th. The company originates, underwrites, funds, services, and manages a portfolio of short-term loans secured by first mortgage liens on property located primarily in Connecticut.
Janney Montgomery Scott’s Tyler Batory just this June began covering shares of Sachem Capital Corp. (NYSE: SACH) with a Buy rating.
In the second quarter of 2021, Sachem Capital Corp. (NYSE: SACH) had an FFO of $0.10, missing estimates by $0.01. The company’s revenue was $6.71 million, up 55.75% year over year and beating estimates by $0.98 million. Sachem Capital Corp. (NYSE: SACH) has gained 3.46% in the past 6 months and 12.21% year to date.
By the end of the second quarter of 2021, 4 hedge funds out of the 873 tracked by Insider Monkey held stakes in Sachem Capital Corp. (NYSE: SACH) worth roughly $6 million. This is compared to 1 hedge fund in the previous quarter with a total stake value of approximately $1.02 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), Sachem Capital Corp. (NYSE: SACH) is a good stock to invest in.
6. Annaly Capital Management, Inc. (NYSE: NLY)
Number of Hedge Fund Holders: 19
Dividend Yield: 10.4%
Annaly Capital Management, Inc. (NYSE: NLY) is another mortgage REIT on our list of dividend stocks with over 9% yield. The company is based in New York and ranks 6th on our list. It invests in residential and commercial assets, among others.
Keefe Bruyette holds a Market Perform rating on shares of Annaly Capital Management, Inc. (NYSE: NLY) as of this June, alongside a price target of $9.50.
In the second quarter of 2021, Annaly Capital Management, Inc. (NYSE: NLY) had an FFO of $0.30, beating estimates by $0.02. The company’s revenue was $239.77 million, missing estimates by $185.72 million. Annaly Capital Management, Inc. (NYSE: NLY) has gained 4.8% in the past 6 months and 6.20% year to date.
By the end of the second quarter of 2021, 19 hedge funds out of the 873 tracked by Insider Monkey held stakes in Annaly Capital Management, Inc. (NYSE: NLY) worth roughly $98.2 million. This is compared to 15 hedge funds in the previous quarter with a total stake value of approximately $140 million.
Like JPMorgan Chase & Co. (NYSE: JPM), Mastercard Incorporated (NYSE: MA), Abbot Laboratories (NYSE: ABT), and Johnson & Johnson (NYSE: JNJ), Annaly Capital Management, Inc. (NYSE: NLY) is a good stock to invest in.
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Disclosure: None. 10 Dividend Stocks with Over 9% Yield is originally published on Insider Monkey.
