10 Extreme Dividend Stocks With Upside Potential

7. Starwood Property Trust, Inc. (NYSE:STWD)

Upside Potential as of August 14: 13.4%

Dividend Yield as of August 14: 9.83%

Starwood Property Trust, Inc. (NYSE:STWD) is a Connecticut-based real estate investment trust company that invests in commercial mortgage properties. The stock surged by nearly 3% on August 3, when it announced its earnings for the second quarter of 2024. Though the company missed analysts’ estimates on various fronts, it managed to improve its debt-to-equity ratio. The company reported that its adjusted debt-to-equity ratio fell to 2.29x from 2.33x, reaching its lowest level in more than two years. A low debt-to-equity ratio benefits income investors because it means the company can allocate more cash toward shareholder returns.

In the second quarter of 2024, Starwood Property Trust, Inc. (NYSE:STWD) has strategically broadened its investments beyond commercial lending, responding to shifts in risk and reward. Currently, over 40% of the company’s assets are invested outside of commercial lending. This diversification, coupled with low leverage ratios, has enabled the company to perform well despite a challenging real estate correction. The company believes that the worst period for the global property sector is over and that the US and Europe are moving towards a period of easing.

Starwood Property Trust, Inc. (NYSE:STWD) has maintained a steady dividend and achieved an annualized return of over 10% since its establishment 15 years ago. Although some businesses may be experiencing a slowdown, others are gaining momentum. The company has never missed a dividend since 2010 and the per-share payout has grown from $0.32 to $0.48 in all these years. With a dividend yield of 9.83% as of August 14, STWD is one of the best dividend stocks on our list.