Investors seeking passive income often turn to high-yield dividend stocks. These stocks not only offer a substantial income stream but also have the potential for significant total returns over time. Many investors, particularly those looking for aggressive returns, focus on lower-priced stocks to maximize their share count. Historically, even some of the largest public companies traded in single digits, demonstrating the potential of such investments.
Numerous reports have highlighted the attractiveness of high-yield dividend stocks, especially when interest rates decline. This trend tends to push dividend stocks back into favor among investors. Additionally, companies like Apple (NASDAQ:AAPL), Amazon, and Netflix (NASDAQ:NFLX), which once traded at low prices, have shown the long-term benefits of such investments. These comparisons emphasize the merit of considering lower-priced dividend stocks for substantial future gains.
AGNC Investment
AGNC Investment Corp. is a real estate investment trust (REIT) based in the United States. Specializing in residential mortgage pass-through securities and collateralized mortgage obligations, AGNC has maintained solid monthly dividends since 2008. The company funds its investments primarily through collateralized borrowings structured as repurchase agreements and yields a significant 14.43% dividend.
Barings BDC
Barings BDC Inc. is a publicly traded investment company focusing on middle-market debt investments. Specializing in senior secured loans, first lien debt, and other investment types, Barings BDC offers an 11.05% dividend. The company operates in multiple industries, including manufacturing, business services, and consumer products, and targets private equity sponsor-backed investments.
BrightSpire Capital Inc. operates as a commercial real estate credit REIT in the U.S. and Europe. The company focuses on a diversified portfolio of commercial real estate debt investments and net-leased properties. It provides an 11.94% dividend, positioning it as a potentially lucrative investment. The company’s strategy includes originating, acquiring, financing, and managing a range of CRE debt investments.
Orion Office REIT
Orion Office REIT Inc. specializes in managing office buildings in high-quality suburban markets across the U.S. The portfolio mainly includes single-tenant net lease properties leased to creditworthy tenants. Having been spun off from Realty Income Corp. in 2021, Orion pays a 10.55% dividend and trades under $4, making it a potentially attractive investment.
Prospect Capital Corp. is a leading provider of private debt and equity capital, focusing on middle-market investments. It offers a 13.77% dividend and covers various sectors, including aerospace, chemicals, and pharmaceuticals. Prospect Capital specializes in mezzanine finance, leveraged buyouts, and growth capital, among other investment types.
High-yield dividend stocks, particularly those trading under $10, present a unique opportunity for investors seeking substantial income and potential capital appreciation. These investments can be particularly attractive in a declining interest rate environment. Companies like AGNC Investment, Barings BDC, and BrightSpire Capital demonstrate the potential benefits of such investment strategies. As history has shown with large public companies, initial low prices can translate into significant future gains, making these stocks worth considering for patient, strategic investors.
