After Treasury yields soared to over 5% last year for the 10-year note and the 30-year-long bond, many on Wall Street urged investors to grab the once-in-20-year debt. While those that did are happy, those yields are currently much lower and could stay there as rate hikes are close to being over, if not complete.
With the Magnificent 7 leading the charge last year, that move has started to dry up as shareholders have been selling the shares of the mega-tech leaders as many continue to announce significant employee layoffs.
Now is the time to grab Ultra-High dividend stocks with the shift moving back to lower rates. Investors will look to dividend-paying stocks as they may be the best place to look for passive income and total return gains in 2024 and beyond.
We screened our 24/7 Wall St. Ultra-High dividend research database, looking for companies that offer dependable big dividends and can provide outstanding total return potential.
AFC Gamma
This company is an off-the-radar idea that offers outstanding total return potential and pays a huge 16,05% dividend. AFC Gamma, Inc. (NASDAQ: AFCG) originates, structures, underwrites, and invests in senior secured loans, and other types of loans and debt securities for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult use cannabis.
The company primarily originates loans structured as senior loans secured by:
- Real estate
- Equipment
- Licenses and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties.
AFC Gamma, Inc. has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986.
Apollo Commercial Real Estate
Paying a significant 11.75% dividend and close to a breakout in the share price, this is an excellent idea for investors with higher risk tolerance. Apollo Commercial Real Estate Finance Inc. (NYSE: ARI) operates as a real estate investment trust (REIT) that:
- Originates
- Acquires
- Invests in and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States
- It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes if the company distributes at least 90% of its REIT taxable income to its stockholders.
Barings BDC
This business development company is an industry leader and pays a massive 11.44% dividend. Barings BDC, Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company elected to be treated as a business development company under the Investment Company Act 1940.
It seeks to invest primarily in:
- Senior secured loans
- First lien debt
- Unitranche
- Second lien debt
- Subordinated debt
- Equity co-investments
- Senior secured private debt investments in private middle-market companies operating across various industries.
It specializes in:
- Mezzanine
- Leveraged buyouts
- Management buyouts
- ESOPs
- Change of control transactions
- Acquisition financings
- Growth financing
- Recapitalizations in lower-middle market, mature, and later-stage companies
It invests in manufacturing and distribution, business services and technology, transportation and logistics, and consumer products and services. It invests in the United States in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.
Dynex Capital
Paying a hefty 12.15% dividend is a passive income champion for more aggressive investors. Dynex Capital, Inc. (NYSE: DX) is a mortgage real estate investment trust that invests in mortgage-backed securities (MBS) on a leveraged basis in the United States.
It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities.
Agency MBS has a guarantee of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac.
Non-Agency MBS have no such guarantee of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It is generally not subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends.
Frontline
While off the radar of most investors, this shipping company could explode higher and pays a massive 12.89% dividend. Frontline plc (NYSE: FRO) engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers.
In a press release earlier this month, the company announced it would sell its five oldest VLCCs (giant crude carriers), built-in 2009 and 2010, for an aggregate net sale price of $290 million.
The vessels are expected to be delivered to the new owner during the first quarter of 2024. After repaying existing debt on the ship, the transaction is expected to generate approximately $207 million in net cash proceeds.
The Company expects to record a gain in the first quarter of 2024 in the range of roughly $68 million to $76 million, depending on the delivery date of each vessel to the new owner. The sale is subject to certain closing conditions, per industry standards.
Following the transaction and the completion of the delivery of all 24 VLCCs acquired from Euronav NV, Frontline’s fleet will consist of:
- 84 vessels comprised of 41 VLCCs, 2
- 5 Suezmax tankers
- 18 LR2/Aframax tankers
FS KKR
This is a well-known name on Wall Street, offering a solid entry point at current levels and paying a massive 13.55 dividend. FS KKR Capital Corp. (NASDAQ: FSK) is a business development company 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-lien senior secured loans
- Second-lien secured loans
- Subordinated loans 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 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.
The fund may invest in corporate bonds and similar debt securities opportunistically. The fund does not seek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States.
The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
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