In this article, we will take a look at some of the best stocks with the highest dividends.
Stocks that pay dividends share a portion of their profits with shareholders, either through cash payouts or by offering more shares. These dividends can offer a reliable income stream and enhance overall investment returns. In addition, companies that issue dividends are often more established and tend to show lower price swings compared to non-dividend-paying stocks.
Investors often debate between high-yield stocks and those with steady dividend growth. Ed Clissold of Ned Davis Research noted that over 80% of market-listed companies pay dividends, with 324 raising or initiating payouts in the past year. Earlier research from his firm highlighted the strong performance of dividend growers, sparking interest in that strategy.
However, updated data showed that high-yield stocks have outperformed dividend growers since 1973 in both up and down markets. While a high yield can signal strong income potential, it may also reflect a falling stock price and financial trouble. Experts recommend looking beyond yield and evaluating a company’s overall financial health before investing. Given this, we will take a look at some of the best stocks with the highest dividends.
Our Methodology
For this list, we screened for dividend stocks with the highest dividend yields as of July 27. Then, we selected companies from that list that have stable dividend histories, even though their dividend yields are higher than average. The stocks are ranked in ascending order of their dividend yields as recorded on July 27.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of July 27: 11.48%
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is an American business development company that provides senior secured first lien notes. By the close of 2024, the company had around $1.964 billion of its $2.194 billion portfolio allocated to debt securities, with the rest invested in preferred and common equity. The management team has been notably effective in safeguarding invested capital. With an average investment size of $13.8 million, including equity holdings, the portfolio remains well-diversified, reducing the risk that any single investment could significantly impact overall performance.
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) reported strong earnings in the first quarter of 2025. The company’s total investment income was $61.9 million, which showed a nearly 40% growth from the same period last year. As of March 31, 2025, the company’s portfolio stood at $2,344.1 million, comprising $2.1 billion in first lien secured debt, $4.4 million in subordinated debt, and $239.5 million in preferred and common equity. The debt portion of the portfolio was made up entirely of variable-rate investments.
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is one of the best stocks with the highest dividend, as the company has paid uninterrupted dividends to shareholders since 2011. The company offers a monthly dividend of $0.1025 per share and has a dividend yield of 11.48%, as of July 27.
9. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of July 27: 11.78%
Ellington Financial Inc. (NYSE:EFC), a specialty finance firm based in Connecticut, invests in a wide range of financial assets, including mortgage-related, consumer, and corporate holdings.
Ellington Financial Inc. (NYSE:EFC) has been performing well this year, particularly after the company projected higher adjusted distributable earnings for the second quarter. It expects net income per share to fall between $0.43 and $0.47, ahead of the $0.37 consensus estimate. As of June 30, its book value per share is projected to be between $13.47 and $13.51. The stock has surged by nearly 9%.
Ellington Financial Inc. (NYSE:EFC) is a strong dividend payer, as the company pays monthly dividends to shareholders. On July 8, the company declared a monthly dividend of $0.13 per share, which was in line with its previous dividend. Overall, it has been paying regular dividends to shareholders for 15 consecutive years. The stock has a dividend yield of 11.78%, as of July 27.
