In this article, we discuss 10 very high-yield dividend stocks to check out.
With growing inflation and rising interest rates, analysts are expecting a full-blown recession within a few months. Recently, BofA analyzed the current economic situation and said that if the US enters into a recession, global EPS will turn negative in the first quarter of 2023. This would result in stock prices touching their new lows.
This economic outlook has caused a stir among investors who now search for different income strategies to survive through this period. Historically, dividend stocks have proved to pull investors out of their agitation as they outperformed their peers and broader index during previous inflationary periods. According to a research paper published by Columbia Business School, the High Dividend Index delivered an annual average return of 6.16% from January 2000 to May 2010, versus a 4.75% decline in the S&P 500 during the same period. The paper also mentioned that from October 1989 to May 2010, the quarterly dividend growth of the S&P 500 High Yield Dividend Aristocrats index remained positive. Another report by Morgan Stanley also emphasized the importance of dividend stocks during uncertain economic periods. The report mentioned that over the last 90 years, dividends represented nearly 40% of the wider market’s total return.
When investing in dividend stocks, investors are advised to focus on the respective companies’ financial health to determine the stability of payouts. Some of the best dividend stocks that have paid and increased their payouts regularly include The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG). In addition to this, investors also pay attention to dividend yields as it helps them to assess the profitability of their investments. In view of this, we will discuss some very high-yield dividend stocks to check out.
Photo by Marga Santoso on Unsplash
Our Methodology:
For this list, we selected stocks with dividend yields over 11%, as recorded on September 27. The stocks are ranked according to their dividend yields.
10 Very High Yield Dividend Stocks to Check Out
10. Claros Mortgage Trust, Inc. (NYSE:CMTG)
Dividend Yield as of September 27: 11.14%
Claros Mortgage Trust, Inc. (NYSE:CMTG) is an American real estate investment trust company that specializes in senior and subordinate loans on commercial real estate assets. In September, JPMorgan set a $17 price target on the stock with an Underweight rating on the shares, highlighting the company’s performance in the current economic landscape.
In Q2 2022, Claros Mortgage Trust, Inc. (NYSE:CMTG) reported an operating cash flow of roughly $50 million, up from $22.6 million in the previous quarter. The company’s free cash flow came in at $47.7 million, growing from $22 million in the preceding quarter. Its revenue for the quarter was $99.4 million, up from $55.3 million in Q1 2022.
On September 15, Claros Mortgage Trust, Inc. (NYSE:CMTG) declared a quarterly dividend of $0.37 per share, in line with its previous dividend. The company started paying dividends in December 2021. The stock’s dividend yield came in at 11.14%, as recorded on September 27.
At the end of Q2 2022, 4 hedge funds tracked by Insider Monkey owned stakes in Claros Mortgage Trust, Inc. (NYSE:CMTG), down from 6 in the previous quarter. The collective value of these stakes is roughly $4 million.
In addition to best dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), Claros Mortgage Trust, Inc. (NYSE:CMTG) can also be added to dividend portfolios because of its high yield.
9. Capital Southwest Corporation (NASDAQ:CSWC)
Dividend Yield as of September 27: 12.19%
Capital Southwest Corporation (NASDAQ:CSWC) is a credit-focused business development company that provides active capital to middle-market companies across the US. On September 20, the company announced a 4% hike in its quarterly dividend to $0.52 per share. This was the company’s second consecutive year of dividend growth. As of September 27, the stock’s dividend yield stood at 12.19%.
In fiscal Q1 2023, Capital Southwest Corporation (NASDAQ:CSWC) posted a net investment income of $0.49 per share, which beat estimates by $0.01. The company’s total investment income came in at $22.5 million, up 21.3% from the same period last year. It ended the quarter with $18.8 million available in cash and cash equivalents and has total net assets worth $453 million.
In September, B. Riley initiated its coverage of Capital Southwest Corporation (NASDAQ:CSWC) with a Neutral rating and an $18 price target. The firm presented a positive stance on the business development sector but expressed concerns regarding the current situation.
As of the close of Q2 2022, 9 hedge funds in Insider Monkey’s database owned stakes in Capital Southwest Corporation (NASDAQ:CSWC), the same as in the previous quarter. These stakes are collectively worth over $34 million. Millennium Management owned the largest position in the company in Q2.
8. NuStar Energy L.P. (NYSE:NS)
Dividend Yield as of September 27: 12.26%
NuStar Energy L.P. (NYSE:NS) is a Texas-based master limited partnership that operates independent liquid terminals and pipelines across the US. According to Insider Monkey’s Q2 2022 database, 4 hedge funds owned investments in the company, up from 2 in the previous quarter. The total value of these investments is over $8 million, compared with $6 million worth of stakes owned by hedge funds in the previous quarter.
In the second quarter of 2022, NuStar Energy L.P. (NYSE:NS) reported an operating cash flow of over $76.4 million, compared with $68.5 million in the same period last year. The company’s free cash flow also grew to $43.5 million, from $22 million in the prior-year quarter. It generated over $83 million in distributable cash flow during the quarter, which shows that its cash position is strong.
NuStar Energy L.P. (NYSE:NS) has been making consistent dividend payments since 2015. It currently pays a quarterly dividend of $0.40 per share, with a dividend yield of 12.26%, as recorded on September 27.
7. USA Compression Partners, LP (NYSE:USAC)
Dividend Yield as of September 27: 12.87%
USA Compression Partners, LP (NYSE:USAC) is an American company that provides compression services. The company designs and operates its compression units and maintains related inventory and equipment. In Q2 2022, the company reported revenue of $171.5 million, up 9.5% from the same period last year. The company’s operating cash flow stood at $94.2 million, compared with $35 million in the previous quarter. Its free cash flow jumped to $70.6 million, from $14.8 million in the preceding quarter. The company generated $55.6 million in distributable cash flow.
USA Compression Partners, LP (NYSE:USAC) started its dividend policy in 2015 and hasn’t slashed its dividend since then. It currently pays a quarterly dividend of $0.525 per share for a dividend yield of 12.87%, as of September 27.
In July, Mizuho called USA Compression Partners, LP (NYSE:USAC) one of the largest domestic providers of natural gas compression, and said that the company could benefit from increased US gas production. In view of this, the firm initiated its coverage on the stock with a Neutral rating and an $18 price target.
According to Insider Monkey’s data, Citadel Investment Group was the company’s leading stakeholder in Q2 2022, owning stakes worth over $2.6 million.
6. Arbor Realty Trust, Inc. (NYSE:ABR)
Dividend Yield as of September 27: 12.91%
Arbor Realty Trust, Inc. (NYSE:ABR) is a New York-based real estate investment trust that provides debt capital for the multifamily loan and commercial real estate industries. On July 29, the company declared a 2.6% hike in its quarterly dividend to $0.39 per share. It maintains its position as one of the best dividend stocks with a high yield as it has raised its dividends consistently for the past 9 years. As of September 27, the stock’s dividend yield came in at 12.91%.
In Q2 2022, Arbor Realty Trust, Inc. (NYSE:ABR) reported strong financials with nearly $342 million available in cash and cash equivalents. Its total assets at the end of the quarter amounted to over $17.6 billion, up from $15 billion in the previous quarter. The company’s revenue came in at $94.2 million, showing a 60.4% growth from the same period last year.
n June, Piper Sandler reiterated its Overweight rating on Arbor Realty Trust, Inc. (NYSE:ABR) with a $17 price target, acknowledging the company’s overall performance in the past quarters. It can be a valuable addition to dividend portfolios alongside some of the best dividend stocks such as The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
At the end of June 2022, 12 hedge funds tracked by Insider Monkey reported owning stakes in Arbor Realty Trust, Inc. (NYSE:ABR), down from 14 in the previous quarter. These stakes hold a collective value of over $74.5 million. D. E. Shaw, Ken Griffin, and Israel Englander were some of the company’s most prominent stakeholders in Q2.
5. FS KKR Capital Corp. (NYSE:FSK)
Dividend Yield as of September 27: 13.76%
FS KKR Capital Corp. (NYSE:FSK) is an American business development company that provides customized credit solutions to private middle market companies in the country. In Q2 2022, the company reported a total investment income of $379 million, which showed an 84% growth from the same period last year. The company’s operating cash flow for the quarter stood at over $605 million and has over $232 million available in cash and cash equivalents.
FS KKR Capital Corp. (NYSE:FSK) started paying dividends in 2019 and has slashed its dividends many times over these years. It currently offers a quarterly dividend of $0.67 per share, with a dividend yield of 13.76%, as of September 27.
At the end of Q2 2022, 11 hedge funds in Insider Monkey’s database owned stakes in FS KKR Capital Corp. (NYSE:FSK), compared with 13 in the previous quarter. The consolidated value of these stakes is nearly $84 million. Beach Point Capital Management owned the largest stake in the company in Q2.
4. Green Plains Partners LP (NASDAQ:GPP)
Dividend Yield as of September 27: 14.69%
Green Plains Partners LP (NASDAQ:GPP) is an American fee-based limited partnership that provides ethanol and fuel storage and transportation services to other related assets and businesses. On July 21, the company announced a 1% hike in its quarterly dividend to $0.45 per share. This was the company’s second consecutive dividend raise this year, which puts it on our list of best dividend stocks with very high yields. As of September 27, the company’s shares have a yield of 14.69%.
In Q2 2022, Green Plains Partners LP (NASDAQ:GPP) reported an operating cash flow of $12.2 million, up from $9 million in the previous quarter. Its free cash flow for the quarter came in at $12 million, growing from $8.7 million in the preceding quarter. The company ended Q2 with $604.2 million available in cash and cash equivalents and $70 million available under a committed credit facility.
At the end of Q2 2022, 3 hedge funds tracked by Insider Monkey had stakes in Green Plains Partners LP (NASDAQ:GPP), the same as in the previous quarter. These stakes hold a combined value of over $24.7 million. With $24.2 million worth of stakes, No Street Capital owned the largest position in the company in Q2.
3. Icahn Enterprises L.P. (NASDAQ:IEP)
Dividend Yield as of September 27: 16.28%
Icahn Enterprises L.P. (NASDAQ:IEP) is an American diversified holding company that provides services in a wide range of industries. The company has sustained the same quarterly payout of $2.00 per share since 2019. As of September 27, the stock’s dividend yield stood at 16.28%.
In Q2 2022, Icahn Enterprises L.P. (NASDAQ:IEP) reported revenue of $3.5 billion, up 17.1% from the same period last year. Its cash position remained strong during the quarter as it had $2.4 billion available in cash and cash equivalents and $26.9 billion in total assets. In the first six months of the year, the company’s net income stood at $195 million.
At the end of Q2 2022, Icahn Enterprises L.P. (NASDAQ:IEP) was a part of 2 hedge fund portfolios, compared with 4 in the preceding quarter, according to Insider Monkey’s data. The collective value of stakes owned by these hedge funds stood at $13.3 billion, with Icahn Capital LLP owning the major position in the company.
2. Newtek Business Services Corp. (NASDAQ:NEWT)
Dividend Yield as of September 27: 16.55%
Newtek Business Services Corp. (NASDAQ:NEWT) is a non-diversified management investment company that also operates as a business development company. In August, Raymond James upgraded the stock to Market Perform, mentioning that the company’s Q2 results were ahead of Street consensus. The firm further pointed out that its outlook for earnings is brighter.
Newtek Business Services Corp. (NASDAQ:NEWT) currently pays a quarterly dividend of $0.65 per share. The company is one of the best dividend stocks with a high yield as it has raised its dividends at a CAGR of 14.1% in the past five years. As of September 27, the stock’s dividend yield came in at 16.55%.
In Q2 2022, Newtek Business Services Corp. (NASDAQ:NEWT) posted a net investment income of $0.75 per share, which beat estimates by $0.03. The company’s total investment portfolio increased by 8.8% to $757 million. It reported $19.2 million in total investment income and its net income for the quarter stood at $13.5 million.
At the end of June 2022, 5 hedge funds in Insider Monkey’s database owned stakes in Newtek Business Services Corp. (NASDAQ:NEWT), falling from 7 in the previous quarter. The collective value of these stakes is $22.5 million.
1. Orchid Island Capital, Inc. (NYSE:ORC)
Dividend Yield as of September 27: 21.15%
Orchid Island Capital, Inc. (NYSE:ORC) tops our list of the best dividend stocks with very high yields. It is a Florida-based specialty finance company that invests in residential mortgage-backed securities on a leveraged basis. On September 12, the company declared a monthly dividend of $0.16 per share, up from its previous dividend of $0.045 per share. The company has been paying consistent dividends to shareholders since its IPO in 2013. As of September 27, the stock has a dividend yield of 21.15%.
Orchid Island Capital, Inc. (NYSE:ORC) reported revenue of $66.2 million in the second quarter of 2022, up 26% from the same period last year. The company’s net interest income was recorded at $27.1 million and its total expenses stood at $4.9 million. Its cash position also remained strong in Q2 as it reported $283.3 million in cash and cash equivalents and its total assets stood at over $4.4 billion.
As of the close of Q2 2022, 5 hedge funds in Insider Monkey’s database owned stakes in Orchid Island Capital, Inc. (NYSE:ORC), compared with 4 in the previous quarter. The collective value of these stakes is $536,000. Balyasny Asset Management owned the largest stake in the company, worth $277,000.
You can also take a look at 10 Dividend Aristocrats Under $60 You Can Buy in September and 10 Best Dividend Stocks to Buy According to Thomas Bailard’s Hedge Fund
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Disclosure. None. 10 Very High Yield Dividend Stocks to Check Out is originally published on Insider Monkey.
