24/7 Insights
- Those with a higher risk appetite will love ultra-high dividend stocks.
- Passive income generated from stocks can be huge to investors.
- Access 2 legendary, high-yield dividend stocks Wall Street loves.
Investors are drawn to dividend stocks, particularly the ultra-high yield variety. These stocks offer a significant income stream and the potential for massive total returns. Total return, in the context of dividend stocks, includes not just the stock’s appreciation in value, but also the dividends it pays. This measure of return is a key factor in the appeal of these stocks.
At 247 Wall St., we consistently emphasize the potential of total return to our readers, as it is one of the most effective ways to enhance the prospects of overall investing success. Once again, total return is the collective increase in a stock’s value plus dividends.
For younger investors or those on a tight budget, investing to generate consistent passive income can be daunting because many top dividend stocks trade anywhere from $25 to over $100 per share. Realizing any significant return on investment can be challenging with a small investing capital base of $200.
We screened our 24/7 Wall St. dividend income database, looking for solid, lower-priced stocks that pay ultra-high dividends. We found three that investors can purchase with as little as $200 and start generating positive total returns and all trade at less than $10 per share.
AGNC Investment
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This company has paid solid monthly dividends for years; its current yield is 15.43%. AGNC Investment Corp. (NASDAQ: AGNC) is a real estate investment trust (REIT) in the United States.
The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency.
The company funds its investments primarily through collateralized borrowings structured as repurchase agreements. It has elected to be taxed as a REIT under the Internal Revenue Code 1986. However, it would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
Barings BDC
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This business development company is an industry leader and pays a massive 11.34% dividend. Barings BDC Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company elected to be treated as a business development company under the Investment Company Act 1940.
It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments, and senior secured private debt investments in private middle-market companies operating across various industries.
The firm specializes in:
- Mezzanine
- Leveraged buyouts
- Management buyouts
- ESOPs
- Change of control transactions
- Acquisition financings
- Growth financing
- Recapitalizations in lower-middle market, mature, and later-stage companies
It invests in manufacturing and distribution, business services and technology, transportation and logistics, and consumer products and services. The company invests in the United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.
Three Stocks That Have Seen Higher Share Gains Than Super Micro Computer
Prospect Capital
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Hedge funds love this top Business development company, and the gigantic 13.74% dividend makes it a potential total return home run. Prospect Capital Corp. (NASDAQ: PSEC) specializes in the middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending, and bridge transactions.
It also invests in the multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second-lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses.
Prospect Capital focuses on both primary origination and secondary loans/portfolios and invests in situations such as debt financing for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, and real estate financings/investments.
The company invests in the following sectors and business silos:
- Aerospace and defense
- Chemicals
- Conglomerate and consumer services
- Ecological
- Electronics
- Financial services
- Machinery and manufacturing
- Media
- Pharmaceuticals
- Retail
- Software
- Specialty minerals
- Textiles and leather
- Transportation
- Oil gas and coal production
In addition to favoring materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, health care, food and beverage, education, business services, and other select sect
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