In this article, we will be taking a look at the 10 high dividend stocks with over 8% yield.
An increased income has always been one of the main attractions offered by dividend stocks to both veteran and new investors alike. As such dividend investing is a strategy that has long been part of investor circles, particularly by those looking to establish a stable, passive income stream for themselves.
Dividend stocks like Verizon Communications, Inc. (NASDAQ:VZ), AT&T Inc., Exxon Mobil Corporation (NYSE: XOM), and Chevron Corporation (NYSE: CVX) are among some of the most popular stock picks among investors today.
How Important is Dividend Yield?
According to research conducted by Hartford Funds, 84% of the total return of the S&P 500 Index can be attributed to reinvested dividends and compounding since 1970. Additionally, Wellington Management, in collaboration with Hartford Funds, estimated that between 1930 and 2020, high-yielding stocks managed to outperform the S&P 500 index 77.8% of the time while low-yielding stocks managed to outperform the S&P 500 index by about 44.4% of the time.
Our Methodology
For our list, we have selected dividend stocks with yields of over 8%. Using the data tracked by Insider Monkey of about 873 hedge funds, we picked dividend stocks that are highly popular among these hedge funds today. For each stock we have mentioned its yield, along with the number of hedge funds holding a stake in it, ranking them based on their dividend yields. Lastly, we have made use of analyst ratings to determine which stocks are most favorable, largely based on positive ratings.
Why should we pay attention to hedge fund sentiment when choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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10 High Dividend Stocks With Over 8% Yield
10. AT&T Inc (NYSE:T)
Number of Hedge Fund Holders: 68
Dividend Yield as of October 20: 8.07%
Recognized as the largest telecommunications company in the world, as well as the largest provider of mobile telephone services in the United States, AT&T Inc is a multinational conglomerate holding company based in Texas. The firm ranks tenth on our list of the 10 high dividend stocks with over 8% Yield.
On October 7, MoffettNathanson analyst Craig Moffett upgraded AT&T Inc to Neutral from Sell, with a price target of $28, up from $23.
By the end of the second quarter of 2021, 68 hedge funds out of the 873 tracked by Insider Monkey held stakes in AT&T Inc. worth roughly $2.9 billion. This is compared to 63 hedge funds in the previous quarter with a total stake value of approximately $2.7 billion.
Out of the hedge funds being tracked by Insider Monkey, Ken Griffins’ Citadel Investment Group is a leading shareholder in AT&T Inc., with over 32.75 million shares worth more than $942.6 million.
9. Broadmark Realty Capital Inc. (NYSE:BRMK)
Number of Hedge Fund Holders: 12
Dividend Yield as of October 20: 8.13%
Broadmark Realty Capital Inc. (NYSE:BRMK) operates as a real estate investment trust (REIT) that funds, services, and manages a portfolio of the short-term and first deed of trust loans to fund the development of residential or commercial properties in the United States. The company ranks ninth on our list of the 10 high dividend stocks with over 8% yield.
B. Riley’s Matt Howlett is one of the analysts that are bullish on Broadmark Realty Capital Inc., initiating coverage of the company with a Buy rating and a $12.50 price target.
By the end of the second quarter of 2021, 12 hedge funds out of the 873 tracked by Insider Monkey held stakes in Broadmark Realty Capital Inc. worth roughly $91 million. This is compared to 12 hedge funds in the previous quarter with a total stake value of approximately $99 million. Thomas Steyer of Farallon Capital is the leading shareholder of the company.
8. Dynex Capital, Inc. (NYSE:DX)
Number of Hedge Fund Holders: 9
Dividend Yield as of October 20: 8.62%
Dynex Capital, Inc. (NYSE: DX) is engaged in the real estate investment trust (REIT) sector to invest in mortgage-backed securities (MBS) on a leveraged basis in the United States. The Virginia-based company ranks eighth on our list of the 10 high dividend stocks with over 8% yield.
According to our database, Marshal Wace LLP is one of the largest shareholders of the company. By the end of the second quarter of 2021, 9 hedge funds out of the 873 tracked by Insider Monkey held stakes in Dynex Capital, Inc. worth roughly $27 million, up from 8 hedge funds in the preceding quarter with a total stake value of approximately $24 million.
Besides AT&T Inc., Exxon Mobil Corporation, and Chevron Corporation, Dynex Capital, Inc. is a smart investment choice among dividend investors.
7. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 19
Dividend Yield as of October 20: 8.64%
AGNC Investment Corp. (NASDAQ:AGNC) is a real estate investment trust (REIT) that invests in residential mortgage pass-through securities (RMBS) and collateralized mortgage obligations. The company comes in at seventh on our list of the 10 high dividend stocks with over 8% yield.
Investment advisory Barclays remains bullish on the company, holding an Overweight rating alongside a $17 price target on shares of AGNC Investment Corp., led by analyst Mark DeVries.
Of the 873 elite hedge funds being tracked by Insider Monkey, 19 held stakes in AGNC Investment Corp. worth roughly $151 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $167 million. Jim Simons’ Renaissance Technologies is among the leading shareholders in the company.
In addition to AT&T Inc., Exxon Mobil Corporation, and Chevron Corporation, AGNC Investment Corp. (NASDAG:AGNC) is a stock that investors are paying attention to.
6. NexPoint Real Estate Finance Inc. (NYSE:NREF)
Number of Hedge Fund Holders: 4
Dividend Yield as of October 20: 9.09%
NexPoint Real Estate Finance Inc. (NYSE:NREF) is a real estate investment trust (REIT) that invests in mortgage loans on single and multi-family rental units, as well as owns a portfolio of storage facilities and commercial office spaces. The Texas-based company ranks sixth on our list of the 10 high dividend stocks with over 8% yield.
Baird analyst Amanda Switzer keeps an Outperform rating on NexPoint Real Estate Finance Inc. alongside a price target of $22 on its shares, implying a 12% upside for the year.
5. PennyMac Mortgage Investment Trust (NYSE:PMT)
Number of Hedge Fund Holders: 11
Dividend Yield as of October 20: 9.30%
PennyMac Mortgage Investment Trust (NYSE:PMT) is a finance company that invests in residential mortgage loans and mortgage-related assets. The company ranks fifth on the list of the 10 high dividend stocks with over 8% yield.
On September 9, B. Riley analyst Matt Howlett initiated coverage of PennyMac Mortgage Investment Trust with a Buy rating and $23 price target on its shares, noting that the company has one of the best risk/reward profiles in the mortgage real estate investment trust space.
By the end of the second quarter of 2021, 11 hedge funds out of the 873 tracked by Insider Monkey held stakes in PennyMac Mortgage Investment Trust worth roughly $10.4 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $16 million. Ken Griffin of Citadel Investment Group is among the leading shareholders of the company.
4. BlackRock Capital Investment Corporation (NASDAQ:BKCC)
Number of Hedge Fund Holders: 10
Dividend Yield as of October 20: 9.43%
BlackRock Capital Investment Corporation (NASDAQ:BKCC) is a New York-based business development company that specializes in investing in middle-market companies. The firm comes in at fourth on our list of the 10 high dividend stocks.
Of the 873 elite funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in BlackRock Capital Investment Corporation. At the end of the second quarter of 2021, 10 hedge funds held stakes in the company, up from 6 hedge funds in the previous quarter.
3. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Holders: 7
Dividend Yield as of October 20: 9.76%
Ellington Financial Inc. (NYSE: EFC) is a mortgage real estate investment trust that manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. The company ranks third on our list of the 10 high dividend stocks with over 8% yield.
Investment advisory BTIG is bullish on Ellington Financial Inc., holding a Buy rating on the company. The firm also raised its price target on the stock to $19.
By the end of the second quarter of 2021, 7 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ellington Financial Inc. worth roughly $45 million. This is compared to 6 hedge funds in the previous quarter with a total stake value of approximately $39 million.
Out of the hedge funds being tracked by Insider Monkey, Leon Cooperman’s Omega Advisors is among the biggest shareholders in the company, with 850,887 shares worth more than $16.29 million.
2. Annaly Capital Management, Inc. (NYSE:NLY)
Number of Hedge Fund Holders: 19
Dividend Yield as of October 20: 10.08%
Annaly Capital Management, Inc. (NYSE:NLY), is a diversified capital management and real estate investment trust (REIT) that invests in residential and commercial assets. The company ranks 2nd on our list of the 10 high dividend stocks with over 8% yield.
Earlier this October, Piper Sandler analyst Kevin Barker kept a Neutral rating on Annaly Capital Management, Inc. alongside a price target of $8.50.
According to our database, Jim Simons’ Renaissance Technologies is one of the biggest shareholders in Annaly Capital Management, Inc.. By the end of the second quarter of 2021, 19 hedge funds out of the 873 tracked by Insider Monkey held stakes in Annaly Capital Management, Inc. worth roughly $98.2 million. This is compared to 15 hedge funds in the previous quarter with a total stake value of approximately $140 million.
1. Two Harbors Investment Corp. (NYSE:TWO)
Number of Hedge Fund Holders: 30
Dividend Yield as of October 20: 10.09%
Two Harbors Investment Corp. (NYSE:TWO) a real estate investment trust (REIT), comes in at first on our list of the 10 high dividend stocks with over 8% yield. The company focuses on investing and managing residential mortgage-backed securities and other financial assets.
As of Q2 2021, 30 hedge funds tracked by Insider Monkey have positions in Two Harbors Investment Corp., compared with 32 in the previous quarter. These stakes are valued at $160.7 million. New York-based investment firm Two Sigma Advisors is one of the leading shareholders in the company, with over 4.4 million shares worth approximately $33.3 million.
Investment advisory Credit Suisse remains bullish on Two Harbors Investment Corp., maintaining a Neutral rating on shares of the company alongside a $7.50 price target.
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This article is originally published at Insider Monkey.
