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Investors love dividend stocks, especially the ultra-high-yield variety, because they offer a significant income stream and massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the most significant public companies, especially the technology giants, trade at prices up to $1000 per share, while many are in the low to mid-hundreds. It's hard to get decent share count leverage at those steep prices.
Many investors, especially more aggressive traders, look at lower-priced stocks to make good money and get a higher share count. That can help the decision-making process, especially when you are on to a winner, as you can always sell and keep half.
For low-price stock skeptics, many of the biggest companies in the world, including Apple, Amazon, Netflix, and Nvidia, all traded in the single digits at one time.
We screened our 24/7 Wall St. research database, looking for companies trading under $10 that pay double-digit ultra-high-yield dividends that could offer patient investors enormous returns for the rest of 2024 and beyond. Five companies that hit our screens, making the total return potential even more intriguing. Dividend investors should snap up this new report .
AGNC Investment
AGNC Investment provides private capital to the housing market in the United States.
This company has paid solid monthly dividends since 2008, and its current yield is a whopping 14.43%. 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.
AGNC Investment 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
Barings BDC primarily makes debt investments in middle-market companies.
This business development company is an industry leader and pays a massive 11.05% 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
- Senior secured private debt investments in private middle-market companies operating across various industries
The company 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
Barings BDC invests in manufacturing and distribution, business services and technology, transportation and logistics, and consumer products and services. It invests in the United States and in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed investments.
BrightSpire Capital
BrightSpire Capital is focused on originating, acquiring, financing, and managing a diversified commercial real estate debt portfolio and net lease real estate investments.
With a massive 11.94% dividend and trading under $6, this company could be a total return home run. BrightSpire Capital Inc. ( NYSE: BRSP ) operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe.
The company operates through:
- Senior and Mezzanine Loans and Preferred Equity
- Net Leased and Other Real Estate
- Corporate and Other segments
It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments, including first mortgage loans, senior loans, debt securities, mezzanine loans, preferred equity investments, and net leased properties.
The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
Orion Office REIT
Trading under $4 with a massive 10.55% dividend, this company could double in price from its current trading levels. Orion Office REIT Inc. (NYSE: ONL) specializes in owning, acquiring, and managing a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S.
The portfolio is leased primarily to creditworthy tenants on a single-tenant net lease basis. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework, which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.
The company was founded on July 1, 2021, spun off from Realty Income Corp. ( NYSE: O ) on November 12, 2021, and began trading on the New York Stock Exchange on November 15, 2021. The company's headquarters are in Phoenix, Arizona, and it has an office in New York.
Prospect Capital
Prospect Capital is a leading flexible private debt and equity capital provider.
Hedge funds love this top BDC, and the gigantic 13.77% 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, marketplace 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. It invests in 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 sectors.
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