Nobody is happier than senior citizens that bank rates have shot up and they can safely get as much as 4.5% and higher on insured bank money markets. Add in that some banks and other financial institutions are offering certificates of deposit that yield well over 5%, and the older crowd is partying like it’s 1999. However, for more aggressive investors looking for a big dividend yield, bank money markets and CDs are likely not where they want to be.
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We decided to look at the quality master limited partnerships (MLPs), mortgage and regular real estate investment trusts (REITs), business development companies (BDCs) and shipping leaders for growth ideas with a big passive income dividend. In a rising rate environment, these can be tricky to buy and own, but with the federal funds rate likely close to the top end of the range, and the possibility that rates could be lowered next year, it makes sense for aggressive growth and income investors to consider these ideas.

We screened our 24/7 Wall St. high income and growth universe looking for top companies that pay big and dependable dividends and distributions. We found six that make sense now, and all pay massive dividends. While all are rated Buy at top firms across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Alliance Resource Partners

This is a leader in the thermal coal business and also offers solid diversity. Alliance Resource Partners L.P. (NASDAQ: ARLP), a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company produces a range of thermal and metallurgical coal with sulfur and heat contents.

It operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia. In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. It buys and resells coal, as well as 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 network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems and data and analytics software.

Investors receive a 15.03% distribution. Benchmark has a $28 target price on Alliance Resource Partners stock, but the consensus target is higher at $29.33. The closing share price on Tuesday was $18.62.

Annaly Capital Management

This mortgage REIT has been around for years and is a top income idea. Annaly Capital Management Inc. (NYSE: NLY), a diversified capital manager, engages in mortgage finance and corporate middle-market lending.

The company invests in agency mortgage-backed securities, mortgage-servicing rights, agency commercial mortgage-backed securities, non-agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts and other commercial real estate investments. It has elected to be taxed as a REIT.
Annaly Capital Management’s solid first-quarter earnings and revenue results exceeded analyst expectations. Trading at a tiny 6.2 times 2023 earnings, the stock is offering aggressive investors a huge opportunity.

Shareholders receive a 13.87% dividend. The Piper Sandler target price is $21.50, and Annaly Capital Management stock has a consensus target of $21.72. The shares closed on Tuesday at $18.65.
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Eagle Bulk Shipping

This industry leader broke out in a big way and has been consolidating in recent trading. Eagle Bulk Shipping Inc. (NASDAQ: EGLE) engages in the ocean transportation of dry bulk cargoes worldwide.

The company owns, charters and operates dry bulk vessels that transport a range of cargoes, including iron ore, coal, grains, fertilizers, steel products, petcoke, cement and forest products. It serves miners, producers, traders and end users. As of December 31, 2021, the company owned and operated a fleet of 53 vessels.

Eagle focuses exclusively on the versatile midsize dry bulk vessel segment and owns one of the largest fleets of Supramax/Ultramax vessels in the world. The company performs all management services in-house (including strategic, commercial, operational, technical and administrative) and employs an active management approach to fleet trading with the objective of optimizing revenue performance and maximizing earnings on a risk-managed basis.

Eagle Bulk Shipping stock comes with an 11.05% dividend. The $75 Alliance Global Partners price target is well above the $66.60 consensus target and Tuesday’s close at $42.36.

FS KKR Capital

This very well-known name on Wall Street is offering a solid entry point at current levels. FS KKR Capital Corp. (NASDAQ: FSK) is a BDC 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 and second lien secured loans and, to a lesser extent, subordinated or mezzanine loans. In connection with the debt investments, the firm also receives equity interests, such as warrants or options, as additional consideration. It also seeks to purchase minority interests in the form of 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.

On an opportunistic basis, the fund may invest in corporate bonds and similar debt securities. The fund does not seek to invest in start-up companies, turnaround situations or companies with speculative business plans. It seeks to invest in small and middle-market companies based in the United States. The fund seeks to invest in firms with annual revenue between $10 million and $2.5 billion. It seeks to exit from securities by selling them in a privately negotiated over-the-counter market.

FS KKR Capital posted stellar results for the most recent quarter and announced a continuation of a huge stock buyback.

The dividend yield here is 14.82%. Jefferies is the only Wall Street firm with a Buy rating, out of the 15 that follow the stock. Its $25 price target is higher than the $21.19 consensus target. FS KKR Capital stock closed on Tuesday at $18.78.

OneMain Holdings

This off-the-radar company has been around for over 100 years. OneMain Holdings Inc. (NYSE: OMF), a financial service holding company, engages in the consumer finance and insurance businesses. The company originates, underwrites and services personal loans secured by automobiles or other titled collateral, or unsecured.
OneMain also offers credit cards and insurance products, comprising life, disability and involuntary unemployment insurance; optional non-credit insurance; guaranteed asset protection coverage as a waiver product or insurance; and membership plans. It operates through a network of approximately 1,400 branch offices in 44 states, as well as through its website.
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Billionaire George Soros has a big position in the company, as he bought 275,000 shares in the fourth quarter of 2022. With very solid books and risk controls that keep net charge-offs low, the company offers big-time risk-reward for investors.

Shareholders receive an 11.26% dividend. Northland Securities has set its target price at $48, while the consensus target is $51.77. Tuesday’s closing print was $35.51.

Starwood Property Trust

Real estate legend Barry Sternlicht runs this high-yielding REIT with big-time total return potential. Starwood Property Trust Inc. (NYSE: STWD) operates in the United States, Europe and Australia through the following segments.

Its Commercial and Residential Lending segment originates, acquires, finances and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, including distressed or nonperforming loans.

The Infrastructure lending segment originates, acquires, finances and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.

The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade and non-investment grade rated CMBS comprising subordinated interests of securitization and resecuritization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts.

Investors receive an 11.93% distribution. Starwood Property Trust stock has an $18.50 price target at J.P. Morgan. The consensus target is $21.79, and shares closed at $16.09 on Tuesday.

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These six top companies pay large and, for the most part, very safe dividends, as all have been around for years. With the interest rate risk possibly swinging the other way next year, these could be total return home runs for patient investors. Patience can be a virtue when you are being paid these kinds of huge dividends quarterly.

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