In this article, we discuss the 5 extreme dividend stocks with upside potential. If you want to read our detailed analysis of these stocks, go directly to the 10 Extreme Dividend Stocks With Upside Potential.
5. Blackstone Mortgage Trust, Inc. (NYSE:BXMT)
Number of Hedge Fund Holders: 12
Forward Dividend Yield: 7.64%
Blackstone Mortgage Trust, Inc. (NYSE:BXMT) recently announced that it planned to raise $400 million through a senior notes offering. The company, which operates as a real estate finance firm, beat market expectations on earnings per share and revenue in the second quarter. It thus earned a place on this extreme dividend stock list. The company was one of the few in the real estate sector that delivered double-digit returns to investors last year. So far this year, the stock is up 17%.
Blackstone Mortgage Trust, Inc. (NYSE:BXMT) has managed to sustain business through the uncertainties of the pandemic because of disciplined underwriting. The company declared a quarterly dividend of $0.62 per share last month, in line with previous.
Out of the hedge funds being tracked by Insider Monkey, London-based firm Egerton Capital Limited is a leading shareholder in Blackstone Mortgage Trust, Inc. (NYSE:BXMT) with 3.7 million shares worth more than $118 million.
4. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 16
Forward Dividend Yield: 8.20%
Antero Midstream Corporation (NYSE:AM) owns and operates midstream energy infrastructure. Over the last year, the stock has returned more than 77% to investors. The company also has strong fundamentals, beating market predictions on earnings per share and revenue in the second quarter. Earlier this week, it declared a quarterly dividend of $0.225 per share, in line with previous.
Antero Midstream Corporation (NYSE:AM) has a market cap of over $5 billion and posted more than $970 million in revenue last year. The company was founded in 2013 and employs more than 500 people.
At the end of the second quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $106 million in Antero Midstream Corporation (NYSE:AM), down from 17 in the previous quarter worth $123 million.
In its Q4 2020 investor letter, Bonhoeffer Capital Management, an asset management firm, highlighted a few stocks and Antero Midstream Corporation (NYSE:AM) was one of them. Here is what the fund said:
“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)
This includes our broadcast TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.
An example is Antero Midstream, whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream cash flows become more secured as Antero Resources has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero subordinated debt with a yield of 7.8%.”
3. Chimera Investment Corporation (NYSE:CIM)
Number of Hedge Fund Holders: 16
Forward Dividend Yield: 8.52%
Chimera Investment Corporation (NYSE:CIM) is placed third on our list of extreme dividend stocks with upside potential. The firm stands to benefit from the increase in mortgage rates across the US. Last month, the company declared a quarterly dividend of $0.33 per share, in line with previous. Since June, the company has sponsored two securitizations of residential mortgage loans with a principal balance of $885 million.
Chimera Investment Corporation (NYSE:CIM) stock has returned more than 78% to investors in the past twelve months. The company beat market expectations on earnings per share in the second quarter by $0.20 and reported a 47% year-on-year increase in the net interest income.
At the end of the second quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $105 million in Chimera Investment Corporation (NYSE:CIM), up from 15 the preceding quarter worth $78 million.
2. Arbor Realty Trust, Inc. (NYSE:ABR)
Number of Hedge Fund Holders: 18
Forward Dividend Yield: 7.35%
Arbor Realty Trust, Inc. (NYSE:ABR) recently closed a commercial real estate mortgage loan securitization worth $1.5 billion. The company, one of the extreme dividend stocks with upside potential, invests in commercial real estate markets across the US. Earlier this month, it priced a $173 million preferred stock offering. In July, the firm had raised the quarterly dividend by 3% to $0.35 per share.
In earnings results for the second quarter, Arbor Realty Trust, Inc. (NYSE:ABR) reported a net interest income of $58 million over the period, up more than 40% year-on-year and beating expectations by $4.5 million.
At the end of the second quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $109 million in Arbor Realty Trust, Inc. (NYSE:ABR), down from 21 in the previous quarter worth $103 million.
1. Iron Mountain Incorporated (NYSE:IRM)
Number of Hedge Fund Holders: 25
Forward Dividend Yield: 5.52%
Iron Mountain Incorporated (NYSE:IRM) is a real estate investment trust that invests in storage and information management services. The company is one of the largest REITs in the world, working with more than 225,000 businesses. The stock has returned more than 63% to investors over the past year. In August, the firm signed a 2.4-megawatt lease with a company that is part of the 100 biggest tech firms in the world according to Fortune magazine.
Iron Mountain Incorporated (NYSE:IRM) posted a revenue of more than $1.1 billion in the second quarter, up 14% compared to the revenue over the same period last year and beating estimates by $30 million.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Iron Mountain Incorporated (NYSE:IRM) with 372,563 shares worth more than $15 million.
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