Unlock a Lifetime of Passive Income with These 2 Ultra-High-Yield Dividend Stocks
As the stock market continues to reach new heights, finding high-yield dividend payers has become increasingly challenging. The S&P 500’s average dividend yield has dwindled to an uninspiring 1.3%. However, savvy investors can still uncover underappreciated businesses offering ultra-high dividend yields.
Ares Capital: A Specialty Financier with a Proven Track Record
Ares Capital (NASDAQ: ARCC) is the world’s largest publicly traded business development company (BDC). With a diverse portfolio of 525 companies, Ares Capital offers an attractive 8.9% yield. Its quarterly dividend payment has increased by 26% over the past decade, providing confidence for income-seeking investors.
Ares Capital’s investment-grade credit rating allows it to access capital at favorable rates. Recently, it sold $850 million worth of five-year notes with a low 5.95% coupon. The company’s midsize business clients are willing to borrow at higher rates, resulting in an average yield of 12.2% from debt securities in its portfolio.
EPR Properties: A REIT with a Growing Portfolio
EPR Properties (NYSE: EPR) is a real estate investment trust (REIT) specializing in properties that bring people together in large groups. Despite recent pressure on the stock price, EPR Properties offers an enticing 9.3% dividend yield. The company’s portfolio is shifting toward non-theater tenants, including popular eat-and-play facilities like Top Golf.
EPR Properties has restarted its monthly dividend program and has raised its dividend by 14% since July 2021. With adjusted funds from operations (FFO) expected to range between $4.76 and $4.96 per share this year, the company is well-positioned to support and raise its payout.
Adding these Ultra-High-Yield Dividend Stocks to Your Portfolio
Both Ares Capital and EPR Properties offer attractive yields and growth potential. While the pandemic has taught investors to diversify, adding these beaten-down shares to a diverse portfolio could provide a great way to boost passive income over the long run. Consider investing in these ultra-high-yield dividend stocks for a lifetime of passive income.
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