In this article, we will be taking a look at 10 dividend stocks with over 8% yield.
Market downturns and rising inflation rates across the globe have left most businessmen and investors in a worry.
Dividend stocks like The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and Verizon Communications (NYSE:VZ) are in the news these days as investors brace themselves for a possible recession and economic downturn. High-yield dividend stocks are also on investors’ radar these days because high-yield dividend stocks have a reputation for outperforming the S&P 500 by about 3% on an annualized basis between the years of 1960 to 2017, according to a Global X report. This figure represents an outperformance of dividend stocks with yields of over 6% not only in the short term but over 58 years. Between these years, the stocks that were studied in the high dividend stock portfolio had annualized returns of 13.02% compared to 10% for the S&P 500. They also proved to perform better in periods of rising interest rates by an annualized average of 0.80%.
Sandy Villere, a portfolio manager at Villere & Co., recently commented that it would be a sensible decision to hide behind dividend-paying companies that are sure to survive during the market turbulence. Villere & Co. is a wealth management firm that manages $2.4 billion in equity and fixed-income strategies, and Mr. Villere has followed his own advice by purchasing more shares in companies like Chevron Corporation (NYSE:CVX) and Newell Brands Inc. (NASDAQ:NWL) for his clients.
Photo by Vitaly Taranov on Unsplash
Our Methodology:
To compile the list below, we have selected dividend stocks with yields of 8% and above that have proven to be popular among hedge funds in recent quarters, according to Insider Monkey’s hedge fund data for the first quarter of 2022. These stocks also mostly have positive analyst ratings and are ranked on the basis of their dividend yields, from the lowest to the highest.
Dividend Stocks With Over 8% Yield
10. Omega Healthcare Investors, Inc. (NYSE:OHI)
Number of Hedge Fund Holders: 17
Dividend Yield: 9.7% as of June 2022
Omega Healthcare Investors, Inc. (NYSE:OHI), a real estate investment trust, invests primarily in the long-term healthcare industry in skilled nursing and assisted living facilities. The company has positive ratings from analysts at Barclays and Stifel, making it one of the more popular dividend stocks with over 8% yield.
Barclays analyst Steve Valiquette initiated coverage of Omega Healthcare Investors, Inc. shares this May with an Equal Weight rating.
Omega Healthcare Investors, Inc. just this February entered into a strategic partnership with MyndVR to bring greater technological innovations to healthcare services within the US and UK. The partnership will give the company access to MyndVR’s resources, such as VR headsets and proprietary care tablets, resulting in a profitable outcome for Omega Healthcare Investors, Inc..
According to our first quarter of 2022 hedge fund data, 17 hedge funds held stakes in Omega Healthcare Investors, Inc. worth $48.8 million. Of these funds, the largest stakeholder was McKinley Capital Management, holding 39,092 shares in the company worth $1.2 million.
Just like The Coca-Cola Company, PepsiCo, Inc., and Verizon Communications, Omega Healthcare Investors, Inc. is a dividend stock hedge funds have been piling into in recent quarters.
9. Prospect Capital Corporation (NASDAQ:PSEC)
Number of Hedge Fund Holders: 6
Dividend Yield: 10.6% as of June 2022
Prospect Capital Corporation (NASDAQ:PSEC) is a closed-end investment company that is publicly traded. The company has elected to be considered as a business development company. It makes real estate investments in the multi-family residential real estate asset class.
In the fiscal second quarter of 2022, Prospect Capital Corporation had an EPS of $0.2, beating estimates by $0.05. The company’s revenue was $175.4 million, also beating estimates by $11.6 million.
The largest shareholder in Prospect Capital Corporation is McKinley Capital Management, holding 557,932 shares in the company worth over $4.6 million. In the first quarter of 2022, six hedge funds held stakes in the company worth $18.5 million.
Like The Coca-Cola Company, PepsiCo, Inc., and Verizon Communications, Prospect Capital Corporation is a robust dividend stock worth investing in.
8۔ Dynex Capital, Inc. (NYSE:DX)
Number of Hedge Fund Holders: 6
Dividend Yield: 10.7% as of June 2022
Dynex Capital, Inc. (NYSE:DX) is a mortgage real estate investment trust investing in mortgage-backed securities on a leveraged basis in the US. The company also pays out its dividends monthly, and with a payout ratio of 80.4%, it is a lucrative investment option for those seeking dividend stocks with over 8% yield.
This May, JonesTrading analyst Jason Stewart reiterated a Buy rating on Dynex Capital, Inc. shares. The analyst noted the company’s “strong” first quarter book value performance and predicted that the company’s leverage would keep rising throughout 2022.
Six hedge funds were long Dynex Capital, Inc. in the first quarter of 2022, with a total stake value of $18.9 million. In the previous quarter, four hedge funds were long the stock, with a total stake value of $2.1 million.
7. Camping World Holdings, Inc. (NYSE:CWH)
Number of Hedge Fund Holders: 16
Dividend Yield: 10.9% as of June 2022
Camping World Holdings, Inc. (NYSE:CWH) is an automotive retail company that retails recreational vehicles (RVs), and related products and services. The company operates through its Good Sam Services and Plans and RV and Outdoor Retail segments.
Brandon Rolle, an analyst at DA Davidson, holds a Neutral rating on Camping World Holdings, Inc. shares as of this April.
Earlier this year in February, Camping World Holdings, Inc. boosted its quarterly dividend by a whopping 25% at the behest of its Board of Directors. The increase raised the company’s regular dividend from $2 to $2.5 per share annually.
Out of 912 hedge funds, 16 hedge funds held stakes in Camping World Holdings, Inc. in the first quarter of 2022, with a total stake value of $359 million.
Wasatch Core Growth Fund mentioned Camping World Holdings, Inc. in its fourth quarter of 2020 investor letter. Here’s what they said:
“A relative underperformer for the quarter was Camping World Holdings, Inc. (CWH), which operates more than 160 retail locations specializing in recreational vehicles and associated parts, accessories and services. Even before the pandemic, similar to our analysis for YETI, we had already recognized the trends favoring Camping World’s market segment. Although the stock was relatively flat for the quarter, we think the price is still reasonable based on strong consumer interest and the business improvements made by the management team in recent years.”
Camping World Holdings, Inc., like The Coca-Cola Company, PepsiCo, Inc., and Verizon Communications, is a popular dividend stock to invest in today.
6. Blackrock Capital Investment Corporation (NASDAQ:BKCC)
Number of Hedge Fund Holders: 9
Dividend Yield: 11.4% as of June 2022
Blackrock Capital Investment Corporation (NASDAQ:BKCC), formerly known as Blackrock Kelso Capital Corp., is a business development company. The company specializes in middle-market companies and invests in all industries, preferring investments between $10 million and $50 million. With a dividend yield that is over 11%, it is one of the most attractive dividend stocks with over 8% yield.
Holding 683,801 shares in the company, Two Sigma Advisors was the largest shareholder in Blackrock Capital Investment Corporation, according to our latest hedge fund holdings data. The total value of these shares is $2.7 million. Nine hedge funds in total were long the company in the first quarter, with a total stake value of $6.2 million.
Horos Asset Management, an investment management firm, mentioned Blackrock Capital Investment Corporation, in its third quarter of 2021 investor letter. Here’s what they said:
“China is a country that always stirs up a lot of controversy because of the way it operates at all levels. Obviously, the array of interventionist measures I have just summarized has generated a lot of debate in various academic circles, including the investment world. In particular, I would like to highlight the opinion of two macro investment legends, precisely because their views are diametrically opposed in this regard. I am referring to George Soros and Ray Dalio.
Soros has been very vocal in taking a stand against Xi Jinping’s regime. Specifically, after BlackRock—the world’s largest asset manager—announced an agreement whereby it became the first foreign entity authorized to market its financial products in China and that it had also decided to allocate a significant part of its portfolios to the Chinese stock market, the Hungarian investor wrote a harsh opinion article in the prestigious newspaper The Wall Street Journal, arguing why this entity was wrong to bet so decisively on China.12 Soros believes that Xi Jinping will use all Chinese companies, both state-owned and private, to perpetuate himself in power and will not hesitate to despise and exploit foreign investors, if necessary. Moreover, in the same article, he criticized BlackRock’s massive injection of money into the country, at a time when the United States and China are competing, more than ever, to impose two opposing systems of government.”
5. Broadmark Realty Capital Inc. (NYSE:BRMK)
Number of Hedge Fund Holders: 7
Dividend Yield: 12.9% as of June 2022
Broadmark Realty Capital Inc. (NYSE:BRMK) is a commercial real estate finance company operating in the US. The company underwrites, funds, services, and manages a portfolio of short-term trust loans for the development of residential and commercial properties.
This March, analyst Timothy Hayes reiterated a Neutral rating on shares of Broadmark Realty Capital Inc..
Out of 912 hedge funds, seven hedge funds were long Broadmark Realty Capital Inc. in the first quarter of 2022. Their total stake value was $50.1 million.
4. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Holders: 7
Dividend Yield: 13.5% as of June 2022
Ellington Financial Inc. (NYSE:EFC) is a mortgage real estate investment trust that acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the US.
This February, Ellington Financial Inc. announced its decision to acquire an additional 49.6% ownership interest in Longbridge Financial for about $75 million. The transaction will result in the company becoming the holder of the entirety of Longbridge’s equity, allowing Ellington Financial Inc. to benefit from Longbridge’s position as a leader in reverse mortgage lending.
Ellington Financial Inc. had seven hedge funds holding stakes in it in the first quarter, with a total stake value of $25.6 million. In comparison, seven hedge funds were long the stock in the previous quarter as well, with a total stake value of $39.6 million.
3. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 14
Dividend Yield: 13.8% as of June 2022
AGNC Investment Corp. (NASDAQ:AGNC) is yet another real estate investment trust on our list of dividend stocks with over 8% yield. The company focuses its investments on residential mortgage pass-through securities and collateralized mortgage obligations. It was founded in 2008 and is based in Maryland, US.
Barclays analyst Mark DeVries holds an Equal Weight rating on shares of AGNC Investment Corp. as of this May.
Our hedge fund data shows 14 hedge funds long AGNC Investment Corp. in the first quarter of 2022, with a total stake value of $70.4 million.
2. Two Harbors Investment Corp. (NYSE:TWO)
Number of Hedge Fund Holders: 31
Dividend Yield: 15.3% as of June 2022
Two Harbors Investment Corp. (NYSE:TWO), a real estate investment trust, invests in and finances residential mortgage-backed securities and mortgage servicing rights, alongside non-agency securities and other financial assets in the US. The company has raised its dividend yield for a year, presenting a hopeful future of profitability for its investors.
JPMorgan’s Richard Shane holds a Neutral rating on shares of Two Harbors Investment Corp. as of this April.
The company had an EPS of $0.22 in the fiscal fourth quarter of 2021, beating estimates by $0.01. Its revenue was $12.8 million.
There were 31 hedge funds long Two Harbors Investment Corp. in the first quarter of 2022, and 34 hedge funds long the stock in the previous quarter. Their total stake values were $123 million and $141 million respectively.
1. Annaly Capital Management, Inc. (NYSE:NLY)
Number of Hedge Fund Holders: 14
Dividend Yield: 15.4% as of June 2022
Annaly Capital Management, Inc. (NYSE:NLY) is among the largest mortgage real estate investment trusts in the US, making it one of the most well-reputed dividend stocks with over 8% yield. The company invests in agency mortgage-backed securities, mortgage servicing rights, Agency commercial mortgage-backed securities, non-Agency residential mortgage assets, and other related assets.
As of this April, JPMorgan’s Richard Shane holds an Overweight rating on shares of Annaly Capital Management, Inc..
In the first quarter of 2022, 14 hedge funds held stakes in Annaly Capital Management, Inc., with a total stake value of $72.1 million.
You can also take a look at Aquamarine Capital’s Top 10 Stock Picks and 15 Best Semiconductor Stocks to Buy Now.
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This article is originally published at Insider Monkey.
