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.
8. Saratoga Investment Corp. (NYSE:SAR)
Dividend Yield as of July 27: 11.91%
Saratoga Investment Corp. (NYSE:SAR) is among the best stocks with the highest dividends. The company reported strong earnings in fiscal Q1 2026. It posted a 17.9% quarter-over-quarter increase in adjusted net investment income (NII) per share, along with continued growth in net asset value (NAV) and a return on equity that surpassed the industry average. The quarter also included two new portfolio company investments and steady performance from its core BDC portfolio, despite ongoing macroeconomic volatility.
Saratoga Investment Corp. (NYSE:SAR)’s adjusted NII of $0.66 per share for Q1 reflected the ongoing impact of declining short-term interest rates and narrower spreads over the past year on its predominantly floating-rate asset base. In addition, recent repayments contributed to a cash position of $224 million at the end of the quarter— capital that could be used for new investments or to pay down existing debt.
Saratoga Investment Corp. (NYSE:SAR) recently shared plans to shift its dividend payments from a quarterly to a monthly schedule. This move reflects its solid liquidity position, consistent asset quality, and proven success in long-term loan origination. The company currently offers a monthly dividend of $0.25 per share and has a dividend yield of 11.91%, as recorded on July 27. SAR is a reliable choice for income investors as the company has raised its payouts nearly every quarter since reinstating its dividend policy in 2020.
7. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of July 27: 14.83%
AGNC Investment Corp. (NASDAQ:AGNC), a mortgage REIT focused on agency-backed mortgage-backed securities (MBS), addressed several market dynamics in its Q2 update. The company noted that although the Federal Reserve and Treasury signaled supportive regulatory changes, banks have remained cautious. Demand from foreign investors also appeared soft, attributed to a weaker US dollar and global tensions. However, AGNC highlighted that MBS spreads have narrowed since the quarter ended and expects renewed interest from both banks and international investors going forward, which could help compress currently wide spreads.
A key measure for mREITs like AGNC Investment Corp. (NASDAQ:AGNC) is tangible book value (TBV), representing the underlying value of their holdings. During Q2, AGNC’s TBV declined by 5%, or $0.44 per share, landing at $7.81, down from $8.25 in Q1. It reported a modest 1% TBV recovery in July after accounting for its dividend.
That said, AGNC Investment Corp. (NASDAQ:AGNC) is popular among income investors because of its dividend policy. The company pays a monthly dividend of $0.12 per share and has a dividend yield of 14.83%, as of July 27. From its IPO in May 2008 through Q2 2025, the company has paid out a total of $14.7 billion in dividends to common shareholders, amounting to $49.36 per share.
6. Prospect Capital Corporation (NASDAQ:PSEC)
Dividend Yield as of July 27: 15.61%
Prospect Capital Corporation (NASDAQ:PSEC) is among the best stocks with the highest dividend. The company recently completed its acquisition of QC Holdings, a consumer credit provider, with the deal officially closed on June 30. As outlined in the earlier merger agreement, Prospect acquired QC Holdings through an all-cash deal valued at roughly $115 million.
As of April 2025, Prospect Capital Corporation (NASDAQ:PSEC) had distributed a total of $21.57 per share to its original common shareholders, based on past and current declared distributions. This figure is roughly three times the company’s March 2025 net asset value per share, amounting to $4.5 billion in cumulative distributions overall. Between its IPO in July 2004 and March 31, 2025, the firm deployed over $21 billion across more than 450 investments and successfully exited over 325 of them.
During that same period, the exited investments generated a realized gross internal rate of return (IRR) of approximately 13%, with $11.8 billion invested and about $14.9 billion returned in proceeds. Prospect Capital Corporation (NASDAQ:PSEC) currently pays a monthly dividend of $0.045 per share for a dividend yield of 15.61%, as of July 27.
5. Horizon Technology Finance Corporation (NASDAQ:HRZN)
Dividend Yield as of July 27: 15.94%
Horizon Technology Finance Corporation (NASDAQ:HRZN) is a specialty finance firm that provides loans and makes investments in early-stage companies operating in sectors like technology, life sciences, healthcare information and services, and clean technology — collectively known as its Target Industries.
In the first quarter of 2025, Horizon Technology Finance Corporation (NASDAQ:HRZN) reported net investment income of $0.27 per share, reflecting its ongoing commitment to sustaining shareholder distributions. Despite facing broader economic headwinds, it expanded its debt portfolio by $20 million during the quarter.
Horizon Technology Finance Corporation (NASDAQ:HRZN) also boosted its committed and approved investment pipeline to $236 million, laying a solid foundation for continued portfolio growth. CFO Dan Trolio highlighted the company’s strong financial position, noting $126 million in available liquidity, including $77 million in cash and $49 million accessible through credit lines. The company maintained a debt-to-equity ratio of 1.54:1, with net leverage at 1.29:1.
Horizon Technology Finance Corporation (NASDAQ:HRZN) is among the best stocks with the highest dividend, maintaining its payouts for 16 consecutive years. The company currently offers a monthly dividend of $0.11 per share for a dividend yield of 15.94%, as of July 27.
4. Dynex Capital, Inc. (NYSE:DX)
Dividend Yield as of July 27: 16.00%
Dynex Capital, Inc. (NYSE:DX) is an internally managed mortgage REIT that focuses on investing in residential and commercial mortgage-backed securities using leverage. In its Q2 earnings report, the company posted a rise in economic net interest income and a reduction in derivative losses, despite ongoing market volatility.
Co-CEO and President Smriti Laxman Popenoe noted that Dynex Capital, Inc. (NYSE:DX)’s disciplined approach to raising and allocating capital in attractive mortgage-backed securities markets positions the firm to deliver strong returns. She added that the company remains committed to investing in liquid, transparent, and easily valued assets, which supports its risk management strategy across varying economic and interest rate conditions.
Dynex Capital, Inc. (NYSE:DX) is one of the best stocks with the highest dividend, as the company has been rewarding shareholders with consistent dividends since 2008. Currently, the company offers a monthly dividend of $0.17 per share for a dividend yield of 16%, as of July 27.
3. Oxford Square Capital Corp. (NASDAQ:OXSQ)
Dividend Yield as of July 27: 18.03%
Oxford Square Capital Corp. (NASDAQ:OXSQ) is a publicly traded closed-end management investment company operating as a business development company under the Investment Company Act of 1940.
The company aims to maximize total returns across its portfolio, primarily by targeting corporate debt securities and investments in collateralized loan obligations (CLOs), which mainly consist of corporate debt holdings. These CLO investments may also involve warehouse facilities— financing arrangements designed to gather loans that could later form the foundation of a CLO structure.
In Q1 2025, Oxford Square Capital Corp. (NASDAQ:OXSQ) reported net investment income of $6.1 million, or $0.09 per share, in line with the previous quarter. Total investment income held steady at $10.2 million. However, combined realized and unrealized losses on investments rose sharply to $14.2 million, or $0.20 per share, up from $2.7 million, or $0.04 per share, in the prior quarter. CFO Bruce Rubin noted that around 1.3 million common shares were issued during the quarter, generating $3.5 million in net proceeds.
With a dividend yield of 18.03%, as of July 27, Oxford Square Capital Corp. (NASDAQ:OXSQ) is among the best stocks with the highest dividend. The company has never missed a dividend since 2006, and it currently offers a monthly dividend of $0.035 per share.
2. Orchid Island Capital, Inc. (NYSE:ORC)
Dividend Yield as of July 27: 19.43%
Orchid Island Capital, Inc. (NYSE:ORC) is a specialty finance firm that focuses on investments in residential mortgage-backed securities (RMBS). Its portfolio is made up of both traditional and structured Agency RMBS. The traditional segment includes mortgage pass-through certificates and collateralized mortgage obligations.
In its first quarter 2025 earnings, Orchid Island Capital, Inc. (NYSE:ORC) noted that it was well-prepared for market volatility, highlighting its strong cash reserves and relatively low leverage. This position enabled limited deleveraging and allowed the firm to repurchase more than 1.1 million shares at a significant discount early in the quarter. Management added that while maintaining a cautious stance, they also sold some shares to build a comfortable financial and cash buffer.
Orchid Island Capital, Inc. (NYSE:ORC) has a strong dividend policy as the company has paid regular dividends to shareholders since its IPO in 2013. It currently pays a monthly dividend of $0.12 per share and has a dividend yield of 19.43%, as of July 27.
1. Mesabi Trust (NYSE:MSB)
Dividend Yield as of July 27: 23.92%
Mesabi Trust (NYSE:MSB), established in 1961 under New York law, is a royalty trust that earns income from the Peter Mitchell Mine, an iron ore site near Babbitt, Minnesota, on the eastern side of the Mesabi Iron Range. The mine is run by Northshore Mining Company, which operates as a subsidiary of Cleveland-Cliffs Inc. (CCI), under several agreements.
Mesabi Trust (NYSE:MSB)’s financial standing has improved significantly, particularly following its legal win over Cleveland-Cliffs. As of the latest quarter, it held $24.22 million in cash. Over the trailing twelve months, it generated $93.51 million in operating cash flow and $17.58 million in levered free cash flow.
On July 14, Mesabi Trust (NYSE:MSB) declared a quarterly dividend of $0.12 per share, down from $0.30 per share dividend announced during the same period last year. The latest distribution announcement reflects several additional considerations, such as ongoing volatility in the iron ore and steel markets, broader economic uncertainty both nationally and globally, potential shifts in trade regulations, and the impact of unfairly traded import volumes. With a dividend yield of 23.9%, as of July 27, MSB is one of the best stocks with the highest dividend.
While we acknowledge the potential of MSB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSB and that has 100x upside potential, check out our report about this cheapest AI stock.
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