If You're Aiming for an Additional $1,000 in Dividend Earnings by 2025, Consider Investing $11,750 in These High-Yield Dividend Stocks
Recent market trends have been favorable, but high stock prices have resulted in lower dividend yields. Income-focused investors now face a tougher hunt for reliable stocks with satisfying yields. Fortunately, options like Realty Income, PennantPark Floating Rate Capital, and Ares Capital continue to deliver impressive returns.
Realty Income, a leading real estate investment trust (REIT), presents an average yield of 5.9% at current prices. However, considering its impressive track record, investors may anticipate a boost in yield in the future. Since its inception in 1994, Realty Income has consistently raised its quarterly payout. With a substantial rental portfolio and a vast addressable market, this REIT indicates potential for continued growth.
PennantPark Floating Rate Capital is another notable stock, offering an enticing 11.2% yield. As a business development company (BDC), PennantPark specializes in originating high-interest loans for middle-market companies, which can sometimes be riskier than larger companies. However, the BDC managed to invest $446 million across 60 companies in the last quarter with an average yield of 11%, and reported sufficient net investment income to maintain its dividend payout.
Lastly, Ares Capital Corporation boasts an enormous BDC portfolio worth $25.9 billion. While Ares Capital does not increase its dividend as frequently as Realty Income, the company has seen a 37% rise in its payouts since 2011. The BDC invests in secured loans to capital-starved middle-market companies, often at surprisingly high interest rates. With a low 1.3% nonaccrual rate, Ares Capital is a reliable addition to diversified income portfolios.
These stocks not only provide high yields but also demonstrate varying levels of dividend growth. While some, like Realty Income, have consistently increased their payouts, others, like PennantPark Floating Rate Capital, show more volatility in their net investment income. Regardless of their growth patterns, these stocks can serve as potent tools for income-focused investors in their quest for reliable dividend payers and enhanced passive income streams.
Investors looking to diversify their finance portfolios might consider investing in these high-yield stocks. Despite Realty Income's current average yield of 5.9%, many anticipate an increase due to its robust history of dividend hikes.
Engaging in finance and investing, income-focused individuals can benefit from the impressive returns offered by Ares Capital Corporation, which has seen a significant 37% increase in its dividend payouts since 2011.
