Investing

Want $20,000 In Passive Income? Invest $50,000 Into These 3 Dividend Stocks

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While the Dow Jones Industrial Average has been making new record highs, many analysts acknowledge that the market is being driven primarily by the excitement over AI and tech stocks like Nvidia (NASDAQ: NVDA).

2024 has become festooned with layoff announcements from many major companies across multiple industries. Although Q1 2024 has yet to culminate, we have already seen: 

  • Citigroup (NYSE: C) announced 20,000 cuts; 
  • Amazon (NASDAQ: AMZN) announcing hundreds more layoffs after cutting 18,000 in 2023;
  • eBay (NASDAQ: EBAY) plans to cut 1,000 jobs;
  • Microsoft (NASDAQ: MSFT) is set to eliminate 1,900 jobs…

For the many who will be impacted by these pink slips, they may be holding sizable shares of stock in their former employers’ public companies. While they submit job applications on Indeed, bills still need to get paid, so sources of passive income will rapidly become indispensable.

For those fortunate enough to have their former companies’ stock shares, they might want to consider selling them and acquiring high-yield dividend stocks. The passive income factor, combined with the ready liquidity available from stocks, might make the difference for many families.

We screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay massive dividends, and we found a collection of companies that, combined, can generate over $20,000 a year in passive annual income if you invest just $50,000 in each stock at the time of this writing:

Fidus Investment Corporation

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Fidus Investment Corporation prrovides growth capital for private low and mid-tier companies.
  • Yield: 13.20%
  • Shares for $50,000: 2,577
  • Annual Passive Income: ~$6,600

Headquartered in Evanston, IL, asset management company Fidus Investment Corporation has built an impressive track record of savvy growth finance deals. With a stated preference for industries such as aerospace and defense, consumer retail, information technology, healthcare, transportation and logistics, and business services, Fidus has a sweet spot for target companies with revenues between $10 million and $150 million with EBITDA between $3 million and $20 million. 

The average size of a Fidus financing is between $5 million and $15 million. It can take a variety of configurations, including, but not limited to leveraged buyouts, mezzanine debt, subordinated loans, senior debt, preferred stock, or other types of secured loan finance structures.

Melia Wealth, LLC, Raymond James & Associates, and Invesco are the three largest institutional shareholders of FDUS. 

Ellington Financial Inc.

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Ellington Financial, Inc. originates mortgages, collateral debt obligations, and other kinds of real estate based finance.
  • Stock #2: Ellington Financial Inc. (NYSE: EFC)
  • Yield: 16.29%
  • Shares for $50,000: 4,472
  • Annual Passive Income: ~ $8,145.00

Founded in 2007, Ellington Financial Inc. is a registered Real Estate Investment Trust (REIT), and as such, is required to distribute 90% of its taxable income as dividends to shareholders. The bulk of Ellington Financial’s activities are in managing its portfolio of mortgage backed securities (MBS), which are a mix of US federal government agency issues from entities such as Fannie Mae or Freddie Mac, and private mortgage backed securities, which can include some subprime loans.

Additionally, Ellington Financial also engages in direct underwriting of collateralized loan obligations, mortgages, corporate loans, and other forms of secured debt transactions from their offices in Old Greenwich, CT. 

54% of EFC is held by large institutions, with the largest ones being BlackRock Inc., Vanguard Group Inc., and Ranger Global Real Estate Advisors, LLC.

Granite Point Mortgage Trust Inc.

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Granite Point Mortgage Trust Inc. focuses on commercial real estate finance from its offices in New York City.
  • Stock #1: Granite Point Mortgage Trust Inc. (NYSE:GPMT
  • Yield: 17.17% 
  • Shares for $50,000: 10,706
  • Annual Passive Income: ~ $8,585.00

Operating from the heart of the Big Apple with offices overlooking midtown Manhattan’s Bryant Park, Granite Point Mortgage Trust Inc. originates, underwrites, and manages a portfolio of floating-rate commercial mortgage property loans and other related debt securities. Granite Point Mortgage Trust is a registered REIT.

Among the commercial real estate transactions the company will support includes, but are not limited to: acquisitions, refinancings, recapitalizations, renovations, and repurposing. Focusing solely on large commercial building properties, Granite Point eschews the residential real estate sector to plow its resources into larger ticket individual projects.

The “work from home” protocol that proliferated as a result of the pandemic is still being felt in the commercial real estate sector, particularly in office buildings, which have stubbornly sustained above average vacancy rates. Nevertheless, Granite Point’s prudent management of their portfolio managed to seamlessly deliver the stock’s dividend, paid off $275 million in convertible bond maturities to strengthen its balance sheet, and bought back 2 million shares of its own GPMT stock, another reassurance to loyal shareholders.

Name Yield:   Annual Dividend Income:
Fidus Investment Corporation (NASDAQ: FDUS) 13.20% $ 6,600.00
Ellington Financial Inc. (NYSE: EFC)  16.29%  $ 8,145.00
Granite Point Mortgage Trust Inc. (NYSE:GPMT)  17.17%  $ 8,585.00
Total:    $23,300.00

 

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