Investors love ultra-high-yield dividend stocks because they provide dependable passive income streams and an excellent opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation. At 24/7 Wall St., we have focused on dividend stocks for over 15 years because, despite the stock market’s ups and downs, many people need reliable passive income streams to supplement their income from employment or other sources such as Social Security and pensions. Investors with a higher risk tolerance look to ultra-high-yield dividend stocks to supercharge passive income streams.
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. The more passive income can help cover rising costs, such as mortgages, insurance, taxes, and other expenses, the easier it is for investors to set aside money for future needs as they prepare for retirement. Dependable recurring dividends are a recipe for success.
We screened our ultra-high-yield 24/7 stock database, looking for the best ideas for the rest of 2026, and four winners have emerged, all of which have a Buy rating on Wall Street.
Why do we cover ultra-high-yield dividend stocks?
While these investments are not suitable for everyone, investors with a higher risk tolerance can earn substantial passive income from these top companies. Paired with more conservative blue-chip dividend giants, investors can use a barbell approach to generate substantial passive income.
Ares Capital
This company specializes in providing financing solutions for the middle market and appears poised to reach new highs, garnering a Buy rating from 12 analysts and yielding a 10.20% dividend. Ares Capital (NASDAQ: ARCC | ARCC Price Prediction) is a high-yielding business development company that specializes in acquisitions, recapitalizations, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions for middle-market companies.
It also makes growth capital and general refinancing. It prefers to invest in companies engaged in basic and growth manufacturing, business services, consumer products, healthcare products and services, and information technology sectors.
The fund will also consider investments in industries such as:
- Restaurants
- Retail
- Oil and gas
- Technology
It focuses on investments in the Northeast, Mid-Atlantic, Southeast, and Southwest regions from its New York office; the Midwest region from its Chicago office; and the Western region from its Los Angeles office.
The fund typically invests between $20 million and $200 million, with a maximum investment of $400 million, in companies with an EBITDA between $10 million and $250 million per year. It makes debt investments between $10 million and $100 million
The fund invests through:
- Revolvers
- First-lien loans
- Warrants
- Unitranche structures
- Second-lien loans
- Mezzanine debt
- Private high yield
- Junior Capital
- Subordinated debt
- Non-control preferred and common equity
The fund also selectively considers third-party-led senior and subordinated debt financings and opportunistically acquires stressed and discounted debt positions. Ares Capital prefers to be an agent and lead the transactions in which it invests. The fund also seeks board representation in its portfolio companies.
J.P. Morgan has an Overweight rating and a $22 target price.
Capital Southwest
Based in Dallas, this company has historically been praised by Wall Street for disciplined credit management and pays a rich 10.50% monthly dividend. Capital Southwest (NASDAQ: CSWC) is an internally managed BDC.
The company is a market lending firm focused on supporting the acquisition and growth of middle-market businesses through investments across the capital structure, including first-lien, second-lien, and non-control equity co-investments.
It specializes in providing customized debt and equity financing to lower-middle-market (LMM) companies across a broad range of investment segments, primarily in the United States. Its investment objective is to produce attractive risk-adjusted returns by generating current income from its debt investments and capital appreciation from its equity and equity-related investments.
Capital Southwest invests primarily in first-lien debt securities, secured by security interests in portfolio company assets. It also invests in equity interests in its portfolio companies alongside its debt securities. It also offers managerial assistance to its portfolio companies.
Loop Capital has a Buy rating with a $23 target price.
Perrigo
Off the radar of most investors, this healthcare company is a solid bet for those who are income-hungry, yielding a whopping 10.80%. Perrigo (NYSE: PRGO) is a provider of over-the-counter (OTC) health and wellness solutions that are designed to enhance individual well-being. Its segments include Consumer Self-Care Americas (CSCA) and Consumer Self-Care International (CSCI).
The CSCA segment comprises its consumer self-care business in the United States and Canada. It primarily provides its customers with self-care products sold under its own and/or exclusive brands.
The CSCI segment comprises its consumer self-care business outside of the United States and Canada, primarily in Europe and Australia. These products are developed, manufactured, marketed, and distributed by the Company.
Perrigo’s product categories include Upper Respiratory, Pain and Sleep-Aids, Skincare and Personal Hygiene, Digestive Health, and Nutrition. The company’s primary branded products are sold under these brand names and others:
- Compeed
- Dr. Fresh
- Firefly
- Good Sense
- Mederma
- Nasonex
- Solpadeine
- Coldrex
- Physiomer
Canaccord has a Buy rating with a $17 target price.
Starwood Property Trust
Starwood Capital is a well-established global investor with international investments spanning over 30 countries and is an affiliate of this high-yielding company, which boasts a 10.70% dividend yield and is led by real estate legend Barry Sternlicht. Starwood Property Trust (NYSE: STWD) operates as a real estate investment trust (REIT) in the United States, Europe, and Australia through four segments:
- Commercial and Residential Lending
- Infrastructure Lending
- Property
- Investing and Servicing
The Commercial and Residential Lending segment originates, acquires, finances, and manages:
- Commercial first mortgages
- Non-agency residential mortgages
- Subordinated mortgages
- Mezzanine loans
- Preferred Equity
- Commercial mortgage-backed securities (CMBS)
- Residential mortgage-backed securities
The Infrastructure Lending segment originates, acquires, finances, and manages infrastructure debt investments, while the Property segment primarily develops and manages equity interests in stabilized commercial real estate properties, including multifamily and net-leased commercial properties, held for investment purposes.
The Investing and Servicing segment:
- Manages and works out problem assets
- Acquires and contains unrated, investment-grade, and non-investment-grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions
- Originates conduit loans to sell these loans into securitization transactions and acquire commercial real estate assets, including properties from CMBS trusts
Wells Fargo has an Outperform rating and a $21 price target.
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