Investors love dividend stocks because they provide dependable income and give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the actual return on an investment or a portfolio has income and stock appreciation.
At 247 Wall St., we always like to remind our readers about the impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Again, total return is the combined increase in a stock’s value plus dividends.
For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.
Alliance Resource Partners
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This company is a leader in the thermal coal business, offers solid diversity and has a massive 13.35% yield. Alliance Resource Partners L.P. (NASDAQ: ARLP), a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States.
The company operates through four segments:
- Illinois Basin Coal Operations,
- Appalachia Coal Operations,
- Oil and Gas Royalties, and
- Coal Royalties.
The company operates seven underground mining complexes in
- Illinois,
- Indiana,
- Kentucky,
- Maryland,
- Pennsylvania, and
- West Virginia
In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas-producing regions primarily in the Permian, Anadarko, and Williston Basins.
Further, the company offers various mining technology products and services, including data networks, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software.
Altria
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This maker of tobacco products offers value investors a great entry point now and pays a rich 9.32% dividend. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company provides cigarettes primarily under the Marlboro brand;
- Cigars and pipe tobacco principally under the Black & Mild brand;
- Moist smokeless tobacco products and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- On! Oral nicotine pouches.
Altria also owns over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer, which some feel is worth more than $10 billion and a company segment that could be sold. Given the public relations disaster the company has gone through this year, it could very well be on the chopping board.
In June, the company purchased NJOY Holdings, which makes electronic cigarettes and vaping products, for $2.75 billion. The company has increased its dividend for 52 consecutive years.
Arbor Realty Trust
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This company trades at a ridiculous 7.05 times trailing earnings and pays a massive 13.78% dividend. Arbor Realty Trust (NYSE: ABR) invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.
The company operates in two segments:
- Structured Business
- Agency Business.
Arbor Realty Trust primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity, as well as real estate-related joint ventures, actual estate-related notes, and various mortgage-related securities.
The company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property;
- Financing by making preferred equity investments in entities that directly or indirectly own real property;
- Mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction;
- Junior participation financing in the form of a junior participating interest in the senior debt and
- Financing products to borrowers seeking conventional, workforce, and affordable single-family housing.
Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities.
Energy Transfer
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The top master limited partnership is a safe way for investors looking for energy exposure and income as the company pays a massive 9% distribution. Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include
- Complementary natural gas midstream,
- Intrastate and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL)
- Refined product transportation and terminalling assets,
- NGL fractionation and various acquisition and marketing assets.
After the purchase of Enable Partners in December of 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in all of the major U.S. producing regions and markets across 41 states, further solidifying its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, L.P., formerly known as Energy Transfer Partners, L.P., the company also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco LP (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners, LP (NYSE: USAC).
FS KKR
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This is a well-known name on Wall Street, offering a solid entry point at current levels and paying a massive 14.17% dividend. FS KKR Capital Corp. (NASDAQ: FSK) is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments.
The company also seeks to invest in
- First-lien senior secured loans
- Second-lien secured loans
- Subordinated loans or mezzanine loans.
In connection with the debt investments, the firm also receives equity interests such as warrants or options as additional consideration. It also seeks to purchase minority interests in common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.
The fund may invest in corporate bonds and similar debt securities opportunistically.
The fund does not seek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States. The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
The company posted stellar results for the most recent quarter and announced a continuation of a massive stock buyback.
Highwoods Properties
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Trading just above a 52-week low, this company pays a stellar 10.55% dividend and has enormous upside potential. Highwood Properties, Inc. (NYSE: HIW) is a fully integrated office real estate investment trust publicly traded (NYSE: HIW).
The company owns, develops, acquires, leases, and manages properties primarily in the best business districts (BBDs) of:
- Atlanta
- Charlotte
- Dallas
- Nashville
- Orlando
- Raleigh
- Richmond
- Tampa.
Highwoods Properties’ biggest customers include the U.S. Government, financial services firms, industrial supply retailers, and healthcare companies.
Mach Natural Resources
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This recent IPO is trading below the initial price and will pay a gigantic 16.33% dividend. Mach Natural Resources (NYSE: MNR) is an independent upstream oil and gas company focused on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas.
The analysts at Raymond James noted that the company is led by Tom Ward, Co-Founder of Chesapeake Energy; Mach is another entrant into the E&P MLP space. MNR is a pure-play operator in the Anadarko Basin, leveraging its strong position (1 million net acres) to become the primary consolidator in the region.
Mach’s midstream position and lower base decline (~20%) allow the company to target a lower reinvestment rate (~30%) relative to the overall industry.
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