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24/7 Insights
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.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.
We screened our 24/7 Wall St. Ultra-high yield dividend research database, looking for companies that investors can buy and hold forever. We avoided the Mortgage REITs and others in the sector susceptible to dividend rate cuts. Five top stocks look like perfect holdings for investors looking to generate reasonably secure passive income streams. Check out these dividend legends as well. https://247wallst.com/dividend-legends/?tpid=1407652&tv=link&tc=in_content
Why are we covering this?
Despite the rise in interest rates over the last two years, we still see persistent "sticky" inflation on many everyday items we must purchase. Those looking to enhance their earnings with passive income can benefit from stocks that pay ultra-high-yield dividends.
Alliance Resource Partners
Alliance Resource Partners, L.P. is engaged in production and marketing of coal to domestic utilities, industrial users and international customers.
This company is a leader in the thermal coal business, offers solid diversity, and a massive 11.20% yield. Alliance Resource Partners L.P. ( NASDAQ: ARLP ) is a diversified natural resource company that produces and markets coal primarily to utilities and industrial users in the United States.
The company operates through four segments:
- Illinois Basin Coal Operations
- Appalachia Coal Operations
- Oil & Gas Royalties
- Coal Royalties
It produces a range of thermal and metallurgical coal with sulfur and heat contents.
The company operates seven underground mining complexes in:
- Illinois
- Indiana
- Kentucky
- Maryland
- Pennsylvania
- West Virginia
In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana, buys and resells coal, and owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas-producing regions, primarily in the Permian, Anadarko, and Williston Basins.
Further, the company offers various mining technology products and services, including:
- Data networks
- Communication and tracking systems
- Mining proximity detection systems
- Industrial collision avoidance systems
- Data and analytics software
British American Tobacco
British American Tobacco p.l.c. is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products including electronic cigarettes.
This European giant continues to print money, has a vast product line, and pays a massive 9.11% 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 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
Frontline
Frontline PLC is the world's fourth largest oil tanker shipping company.
While off the radar of most investors, this shipping company could explode higher and pays a massive 10.54% dividend. Frontline plc ( NYSE: FRO ) engages in the seaborne transportation of crude oil and oil products worldwide.
It owns and operates oil and product tankers.
In a press release announcing stellar first-quarter earnings, the company revealed that it entered into agreements to sell its five oldest VLCCs (very large crude carriers), built in 2009 and 2010, and two of its oldest Suezmax tankers, built in 2010, for an aggregate net sales price of $382.0 million. After the repayment of existing debt on the vessels, the transactions are expected to generate approximately $275.0 million in net cash proceeds.
In addition , Frontline refinanced eight LR2 tankers, generating net cash proceeds of approximately $139.0 million.
FS KKR
FS KKR Capital Corp. is a business development company specializing in investments in debt securities.
This is a well-known name on Wall Street, offers a solid entry point at current levels, and pays a staggering 14.43 dividend. FS KKR Capital Corp. ( NASDAQ: FSK) is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments.
The company also seeks to invest in:
- First-lien senior secured loans
- Second-lien secured loans
- Subordinated loans
- Mezzanine loans
The firm also receives equity interests in connection with debt investments, such as warrants or options for additional consideration. It also seeks to purchase minority interests in common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.
The fund may invest in corporate bonds and similar debt securities opportunistically.
The fund does not seek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States.
FS KKR seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
Petróleo Brasileiro S.A.
This top energy company in Brazil pays a gigantic 14.47% dividend. Petróleo Brasileiro S.A. (NYSE: PBR) explores, produces, and sells oil and gas in Brazil and internationally.
The company operates through:
- Exploration and Production
- Refining
- Transportation and Marketing
- Gas and Power
It also prospected, drilled, refined, processed, traded, and transported crude oil from producing onshore and offshore oil fields, shale or other rocks, oil products, natural gas, and other liquid hydrocarbons.
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