In this article, we discuss 10 very high-yield dividend stocks to check out. You can skip our detailed analysis of the best dividend stocks and their returns over the years, and go directly to read 5 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.
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Disclosure. None. 10 Very High Yield Dividend Stocks to Check Out is originally published on Insider Monkey.
