Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

A recent study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2022). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

To increase that statistic, companies with dividends of 10% and more boost that return rate, so we screened out 24/7 Wall St. ultra-yield dividend database looking for stocks that pay double-digit dividends, and five look ripe for the picking.

Arbor Realty Trust

This company trades at a ridiculous 7.4 times trailing earnings and pays a massive 13.50% dividend. Arbor Realty Trust (NYSE: ABR) invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.

The company operates in two segments:

• Structured Business
• Agency Business.

Arbor Realty Trust primarily invests in:

• Bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity
• Real estate-related joint ventures, real estate-related notes, and various mortgage-related securities

The company offers:

• Bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property
• Financing by making preferred equity investments in entities that directly or indirectly own real property
• Mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction
• Junior participation financing in the form of a junior participating interest in the senior debt
• Financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing.

Barings BDC

This business development company is an industry leader and pays a huge 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 of 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, and
• 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.

Barings BDC invests in the United Statesin companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.

Brandywine Realty Trust

This company has a big upside, and investors also are paid a huge 15.23% dividend. Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the:

• Philadelphia
• Austin
• Washington, D.C.

Organized as a real estate investment trust (REIT), we own, develop, lease, and manage an urban, town center, and transit-oriented portfolio comprising 160 properties and 22.6 million square feet as of September 30,2023, which excludes assets held for sale.

PennantPark Investment

This could be an outstanding total return play, and investors would receive a massive 12.73% dividend. PennantPark Investment Corporation (NASDAQ: PNNT) is a business development company. It seeks to make secondary direct, debt, equity, and loan investments.

The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and, to a limited extent, non-U.S. companies.

The fund typically invests between $2 million and $20 million.

The fund also invests in:

• Equity securities
• Preferred stock
• Common stock
• Warrants or options received in connection with debt investments
• Through direct investments.

It primarily invests between $10 million and $50 million in senior secured loans and mezzanine debt.

The fund invests 30% in non-qualifying assets like investments in:

• Public companies whose securities are not thinly traded or do not have a market capitalization of less than $250 million
• Securities of middle-market companies located outside of the United States
• High-yield bonds
• Distressed debt
• Private equity
• Securities of public companies that are not thinly traded
• Investment companies as defined in the 1940 Act

Under normal conditions, the fund expects at least 80 percent of its net assets plus any borrowings for investment purposes to be invested in floating-rate loans and investments with similar economic characteristics, including cash equivalents invested in money market funds.

It expects to represent 65% of its portfolio through senior secured loans. In the case of floating rate loans, it holds investments for three to ten years.

Trinity Capital

Based in Phoenix, this business development company pays a massive 14.29% dividend. Trinity Capital, Inc. (NASDAQ: TRIN) is a venture capital firm specializing in venture debt to growth-stage companies looking for loans and equipment financing.

The company is an internally managed business development company leading provider of diversified financial solutions to growth-stage companies with institutional equity investors.

Trinity Capital’s investment objective is to generate current income and, to a lesser extent, capital appreciation through investments, including term loans, equipment financings, and equity-related investments.

The firm believes it is one of only a select group of specialty lenders with a depth of knowledge, experience, and track record in lending to growth-stage companies.

 

 

 

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