After years of a low-interest rate environment, which has reversed significantly over the last 22 months but is again trending higher, many investors continue to turn to equities for growth potential and solid and dependable dividends that help provide an income stream. What this equates to is total return, which is one of the most potent investment strategies.

We always like to remind our readers about the impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Again, total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

We screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay significant 14% and higher dividends, and found three companies that passive income investors should grab now. While not suitable for all, those with a higher risk tolerance can buy with confidence.

AGNC Investment

This company has paid solid monthly dividends for years, and the current yield is a stunning 14.77%. AGNC Investment Corp. (NASDAQ: AGNC) operates as a real estate investment trust (REIT) in the United States.

The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency.

AGNC Investment funds its investments primarily through collateralized borrowings structured as repurchase agreements.

The company has elected to be taxed as a REIT under the Internal Revenue Code 1986. It would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.

Armour Residential REIT

This company slashed its dividend by 40% to $0.24 from $0.40 but is still paying investors a massive 14.84%. Armour Residential REIT Inc. (NYSE: ARR) invests in residential mortgage-backed securities (MBS) in the United States.

The company’s securities portfolio primarily consists of the United States Government-sponsored entities (GSE) and the Government National Mortgage Administration’s issued or guaranteed securities backed by:

• Fixed rate
• Hybrid adjustable rate
• Adjustable-rate home loans
• Unsecured notes and bonds issued by the GSE and the United States treasuries
• Money market instruments.

It also invests in other securities backed by residential mortgages for which a GSE or government agency does not guarantee principal and interest payment. The company has elected to be taxed as a real estate investment trust under the Internal Revenue Code.

As a result, it would not be subject to corporate income tax on that portion of its lowered net income that is distributed to shareholders.

Mach Natural Resources

This 2023 IPO is trading below the initial price and is expected to pay a gigantic 16% dividend, which will be announced in February. Mach Natural Resources (NYSE: MNR) is an independent upstream oil and gas company focused on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas.

The analysts at Raymond James noted that the company is led by Tom Ward, Co-Founder of Chesapeake Energy; Mach is another entrant into the E&P MLP space. MNR is a pure-play operator in the Anadarko Basin, leveraging its strong position (1 million net acres) to become the primary consolidator in the region.

Mach’s midstream position and lower base decline (~20%) allow the company to target a lower reinvestment rate (~30%) relative to the overall industry.

Mach says it intends to pay a dividend – a cash distribution. According to the prospectus, Mach estimates that a dividend of $3.52 annualized per unit for the four quarters will end on June 30, 2024. That would translate to a 20% yield, but many feel the distribution could come in below estimates made last year.

 

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