We screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay massive dividends, and we found eight companies that combined can generate over $3,000 a year in passive income if you invest just $2,000 in each stock.
Why It Matters
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Dividends provide a regular cash flow from your investments beyond just stock growth. If you’re seeking passive income or are a retiree, these dividends can be a serious help. Dividends also contribute to the total return of the stock, especially if you reinvest your dividend payout. You can take extra advantage of compound interest in this way!
Many companies also raise their interest over time, helping you hedge against inflation.
1. Diana Shipping Inc.
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Diana Shipping Inc. (NYSE: DSX) is an older company that operates dry bulk cargo ships. They lease these ships out on contracts to ship all sorts of goods. Their primary focus is on generating income through chartering.
Because they are a very established company, they tend to be a bit surer than others, making them a great investment for those looking for dividends.
$2,000 invested in the shares at current trading levels would buy 694 shares that would produce $592 in income yearly.
2. Medical Properties Trust, Inc.
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Medical Properties Trust, Inc. (NYSE: MPW) is a great option if you’re looking for high dividend payments. They are a real estate investment trust that invests in healthcare facilities. They own the buildings that hospitals and clinics are in. However, they don’t actually run any of these businesses. Instead, they lease the space to providers.
REITs must distribute their taxable income to shareholders. Therefore, this company is a great dividend investment. Their focus on healthcare also provides a steady income.
$2,000 invested in the shares at current trading levels would buy 442 shares that would produce $378 in income yearly.
3. Invesco Mortgage Capital Inc.
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Invesco Mortgage Capital Inc. (NYSE: IVR) is another REIT company. However, they invest in residential and commercial securities and mortgage loans. Their primary goal is to provide income for their shareholders, making them a great dividend provider. However, interest rates and housing market fluctuations will affect their returns (and, therefore, their dividend payments).
$2,000 invested in the shares at current trading levels would buy 239 shares that would produce $370 in income yearly.
4. Abrdn Income Credit Strategies Fund
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Abrdn Income Credit Strategies Fund (NYSE: ACP) is a closed-end fund that invests in mostly high-yield corporate bonds. Like many companies on this list, their primary goal is to provide income for their shareholders. Therefore, they tend to provide a steady dividend stream.
They can make a decent income due to their focus on high-yield bonds. However, these investment options can be a bit riskier than others.
$2,000 invested in the shares at current trading levels would buy 304 shares that would produce $358 in income yearly.
5. Orchid Island Capital, Inc.
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As a business development company, Orchid Island Capital, Inc. (NYSE: ORC) provides financing to small and medium businesses. Its income is derived from the interest on these loans, which is directly tied to the performance of the companies it provides loans to. Plus, BDCs can be quite complex and may fluctuate more than other dividend stocks.
Because this company’s main focus is on generating income from interest, it can be a great choice for those looking for passive income.
$2,000 invested in the shares at current trading levels would buy 240 shares that would produce $350 in income yearly.
6. TPG RE Finance Trust, Inc.
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TPG RE Finance Trust, Inc. (NYSE: TRTX) is another REIT that invests in commercial real estate loans. As you might guess, it generates income from interest on the loans. This income is then paid as dividends, making them a great option for those needing passive income.
We also recommend this company because of its focus on income. It’s main goal is to provide income to shareholders. However, these profits are impacted by real estate market conditions, like for all REIT companies.
$2,000 invested in the shares at current trading levels would buy 262 shares that would produce $330 in income yearly.
7. BlackRock TCP Capital Corp.
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BlackRock TCP Capital Corp. (Nasdaq: TCPC) is another business development company, just like Orchid Island Capital, Inc. However, this company invests in middle-market companies, specifically. Like all other business development companies, it makes income based on interest payments.
Of course, its income (and dividends) are affected by the borrowing company’s performance. However, despite this, it remains a high-yield dividend company.
$2,000 invested in the shares at current trading levels would buy 196 shares that would produce $308 in income yearly.
8. AGNC Investment Corp.
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AGNC Investment Corp. (Nasdaq: AGNC) is another REIT. However, unlike the others on this list, it invests in residential mortgage-backed securities. Interest payments on these securities are its primary income source and are distributed as dividends.
Of course, this company is exposed to the housing market, which can make them a bit volatile.
$2,000 invested in the shares at current trading levels would buy 217 shares that would produce $306 in income yearly.
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