Unlocking the Power of Dividend-Paying Stocks
When it comes to investing in Wall Street, there’s one strategy that stands the test of time: putting your money into dividend-paying stocks. These companies have proven themselves to be profitable and committed to sharing their success with shareholders. By distributing a portion of their profits, they demonstrate a level of financial discipline that benefits investors in the long run.
A Proven Track Record
Historical data speaks volumes. Over the past 50 years, dividend-paying stocks in the S&P 500 index have outperformed their non-dividend-paying counterparts, delivering an average annual return of 9.17% compared to 4.27%. This significant difference is a testament to the reliability of dividend-paying stocks.
Three Standout Opportunities
At recent prices, Ares Capital (NASDAQ: ARCC), PennantPark Floating Rate Capital (NYSE: PFLT), and Rithm Capital (NYSE: RITM) offer dividend yields of 9.1% and better. What sets these companies apart is their strong financial footing, which belies their ultra-high yields.
Ares Capital: A Diversified Leader
As the world’s largest publicly traded business development company (BDC), Ares Capital fills a critical gap in the lending market. With a highly diversified portfolio of $25.9 billion spread across 535 borrowers, the company has built a reputation for stability. Its 9.1% yield and 26% dividend growth over the past decade make it an attractive option for income-seeking investors.
PennantPark Floating Rate Capital: A Lender with a Difference
This BDC specializes in mid-sized companies, offering variable-rate loans that mitigate interest rate risks. With an average yield of 12.1% on its debt investments, PennantPark Floating Rate Capital has consistently raised or maintained its dividend payout since 2015. Its 11% dividend yield and monthly payments make it an appealing choice for investors.
Rithm Capital: A Mortgage Mastermind
This real estate investment trust (REIT) has found success in mortgage origination and servicing, mortgage-backed securities, and single-family rentals. Rithm Capital’s diverse portfolio has enabled it to maintain a high dividend payout, with a current yield of 9.5%. Its strong earnings and book value make it an undervalued gem in the market.
Don’t Miss Out on These Opportunities
These three ultra-high-yield dividend stocks offer a chance to generate substantial income and potentially long-term growth. By investing in companies with a proven track record of profitability and dividend payments, you can build a stable and lucrative portfolio that will serve you well in the years to come.
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