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Investors love dividend stocks because they provide dependable passive income streams and a great 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.
Most dividend investors aim to secure a reliable passive income stream from quality dividend stocks. Passive income is a consistent unearned income that doesn't require active traditional work. It is a financial goal that can be achieved through various means, including investments, real estate, or side hustles.
We decided to screen our passive income research database, looking for quality stocks that yield at least 8% and offer investors solid growth potential, and are passive income champions. Six companies are perfect ideas for those seeking to bolster their income and set the stage for some potential capital gains. All are rated Buy at major Wall Street firms. Don't forget to grab this new report right now.
Ares Capital
The company specializes in financing solutions for the middle market.
This high-yielding business development company (BDC) pays a massive 9.26% dividend. Ares Capital Corp. ( NASDAQ: ARCC ) specializes in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of 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, health care products and services, and information technology service sectors.
The fund will also consider investments in industries such as:
- Restaurants
- Retail
- Oil and gas
- Technology
The fund typically invests between $20 million and $200 million and a maximum of $400 million in companies with an EBITDA between $10 million and $250 million. 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 finds the purchase of stressed and discounted debt positions.
British American Tobacco
This is the largest tobacco company in the world based on net sales.
This European giant continues to print money, has a vast product line, and pays a massive 8.26% dividend. British American Tobacco PLC ( NYSE: BTI ) offers:
- Vapor
- Tobacco heating
- Modern oral nicotine products
- Combustible cigarettes
- Traditional oral products, such as snus and moist snuff
The company offers its products under these popular brands:
- Vuse
- Glo
- Velo
- Grizzly
- Kodiak
- Dunhill
- Kent
- Lucky Strike
- Pall Mall
- Rothmans
- Camel
- Natural American Spirit
- Newport
- Vogue
- Viceroy
- Kool
- Peter Stuyvesant
- Craven A
- State Express 555
- Shuang Xi brands
Energy Transfer
Energy Transfer is one of North America's largest and most diversified midstream energy companies.
This top master limited partnership is a safe way for investors looking for energy exposure and income, as the company pays a massive 8.01% distribution. Energy Transfer L.P. ( NYSE: ET ) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation
- Various acquisition and marketing assets.
After purchasing Enable Partners in December 2021, Energy Transfer owns and operates more than 114,000 miles of pipelines and related assets in 41 states, covering all of the major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. ( NYSE: SUN ), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. ( NYSE: USAC ).
MPLX
MPLX is a diversified, large-cap master limited partnership formed by Marathon Petroleum.
This company is one of the top holdings in the Alerian MLP energy exchange-traded fund and pays a healthy 8.01% dividend. MPLX L.P. ( NYSE: MPLX ) is primarily engaged in transporting crude oil and refined products and terminating in the US Midwest and Gulf Coast regions and natural gas gathering and processing in the northeast from its prior acquisition of MarkWest Energy in 2015. Independent US refiner Marathon Petroleum Corp. ( NYSE: MPC ) formed MPLX.
The company’s assets include:
- Network of crude oil and refined product pipelines
- Inland marine business
- Light-product terminals
- Storage caverns
- Refinery tanks
- Docks
- Loading racks and associated piping
- Crude and light-product marine terminals
MPLX also owns:
- Crude oil and natural gas gathering systems
- Pipelines, natural gas, and NGL processing and fractionation facilities in key U.S. supply basins.
Starwood Property Trust
Starwood Property Trust, Inc. engages in originating, acquiring, financing, and managing commercial mortgage loans and other commercial real estate debt.
This high-yielding company, run by real estate legend Barry Sternlicht, offers big-time total return potential and a 9.72% dividend. Starwood Property Trust Inc. ( NYSE: STWD ) operates as a real estate investment trust (REIT) in the United States, Europe, and Australia.
It operates through four segments:
- Commercial and Residential Lending
- Infrastructure Lending
- Property
- Investing and Servicing segments
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.
The Property segment primarily develops and manages equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.
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.
Five High-Yield Dividend Stocks Under $20 Are Perfect Passive Income Ideas
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