Market volatility remains a significant concern for investors looking to protect their portfolios. One effective strategy involves investing in ultra-high-yield dividend stocks, which offer both stable income and potential for stock appreciation. Companies like Rithm Capital and others in the real estate investment trust (REIT) sector have emerged as prominent choices for such investments.
Recent discussions have highlighted Rithm Capital’s expected gains from potential Federal Reserve interest rate cuts. Such cuts could lower borrowing costs, thereby boosting the company’s earnings growth. Historically, REITs have benefitted from similar economic conditions, showing robust performance when interest rates drop. Past performances of these stocks can provide a valuable benchmark for current investment decisions.
Rithm Capital’s Potential
Rithm Capital, trading on the NYSE under the symbol RITM, stands to benefit from the anticipated Federal Reserve interest rate cuts. The company focuses on mortgage origination loans, which are likely to see a decrease in borrowing costs. This reduction could lead to stronger earnings growth. The stock currently trades at just 0.93 times its book value and offers a yield of about 8.64%.
“Once the central bank cuts interest rates, it’ll help lower the borrowing costs for RITM and potentially lead to a higher rate of strong earnings growth.”
Investors can take advantage of Rithm Capital’s consistent dividend payouts in addition to potential stock appreciation. This dual benefit makes it an attractive option for safeguarding portfolios against market volatility.
Other High-Yield Dividend Stocks
Innovative Industrial Properties (NYSE:IIPR) is another promising high-yield dividend stock. This REIT, with a yield of just over 6%, provides financing for the cannabis industry. Recent financial results have been positive, with the company reporting second-quarter funds from operations (FFO) of $2.06 and revenue of $79.8 million. The ongoing legalization efforts could further boost the company’s dividends.
Universal Health Realty Income Trust (NYSE:UHT) offers a 6.6% yield and benefits from owning various healthcare facilities. The REIT recently announced a dividend of 73 cents per share and posted net income growth in its latest quarter. The healthcare sector’s stability further enhances this stock’s appeal.
Kinder Morgan (NYSE:KMI), with a 5.5% yield, is the largest natural gas pipeline operator with a 40% market share. The company stands to benefit significantly from the increasing power demand from artificial intelligence data centers. This growth potential, coupled with its existing market position, makes it a high-yield stock worth considering.
Verizon (NYSE:VZ) raised its dividend to $0.6775, marking the 18th consecutive year of dividend increases. The company’s acquisition of Frontier Communications has expanded its subscriber base, making it even more capable of sustaining high yields.
Realty Income (NYSE:O) is known for its reliable monthly dividends, with a current yield of 5.01%. The REIT owns recession-proof properties like grocery and convenience stores, making it a stable investment option. The company has been paying dividends for over 31 years, reinforcing its reputation as a dependable choice for dividend investors.
Investors looking to safeguard their portfolios from market volatility should consider these high-yield dividend stocks. These stocks provide not only a steady income but also potential for capital appreciation, making them a prudent choice. Monitoring economic conditions and company performance can help in making informed investment decisions. Overall, diversifying with high-yield dividend stocks can offer a balanced approach to achieving financial stability and growth.
