Investors love dividend stocks, especially the ultra-yield variety because they provide a significant income stream and also may offer massive total returns. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
At 247 Wall St., we always remind our readers about the impact total return has on portfolios because it is one of the best ways to improve the chances of overall investing success. Again, total return is the combined increase in a stock’s value plus dividends.
For example, 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 decided to screen our 24/7 Wall St. Ultra-High Yield dividend research database, looking for the top companies aggressive income investors should buy in April. Five companies look like outstanding ideas, and all are buy-rated at top Wall Street firms.
Annaly Capital Management
Annaly Capital Management, Inc. is one of the largest mortgage real estate investment trusts.
This mortgage REIT has been around for years and is a top-income idea paying a vast 13.52% dividend. Annaly Capital Management, Inc. (NYSE: NLY | NLY Price Prediction) is a diversified capital manager 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
FS KKR
FS KKR is a publicly traded BDC that provides customized credit solutions to private middle-market U.S. companies.
This is a well-known name on Wall Street, offers a solid entry point at current levels, and pays a massive 14.78% 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
- Mezzanine loans
The firm also receives equity interests in connection with debt investments, such as warrants or options for 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.
FS KKR seeks to invest in firms with annual revenue between $10 million and $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
Hercules Capital
Hercules Capital is the lender for innovative entrepreneurs and their VC partners.
This highly regarded company across Wall Street pays a giant 10.57% dividend. Hercules Capital, Inc. (NYSE: HTGC) is the largest non-bank lender to venture capital-backed companies at all stages of development in a broadly diversified variety of technology, life sciences, and sustainable and renewable technology industries.
With two decades of experience in venture debt, Hercules is uniquely positioned to quickly create innovative financing solutions that perfectly fit within a company’s existing capital structure and map to its business objectives.
Recognized as the industry leader, Hercules understands the flexibility these companies need and has the experience to work closely with them, even during challenging times, to help them reach critical milestones.
Since its inception in December 2003, Hercules has committed more than $18 billion to over 640 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing.
Horizon Technology Finance
Horizon is a venture lending platform that provides structured debt products to life science and technology.
Paying a stout 11.74% dividend, this stock has tremendous upside potential. Horizon Technology Finance Corporation (NASDAQ: HRZN) is a business development company specializing in lending and investing in development-stage investments.
It focuses on making secured debt and venture lending investments to venture capital-backed companies in these industries.
- Technology
- Life science
- Healthcare information and services
- Cleantech
- Sustainability
Horizon is a leading venture lending platform that offers structured debt products to life science and technology companies. Its experienced investment and operations team has provided debt capital to some of the most exciting companies for decades.
The members of the Horizon team have, collectively, originated and invested more than $5 billion in venture loans to thousands of companies. Since 2004, Horizon has directly originated and invested more than $3 billion in venture loans to more than 315 growing companies.
Trinity Capital
Trinity Capital provides venture debt financing for high-growth venture capital-backed startups.
Based in Phoenix, this business development company pays a massive 13.97% dividend. Trinity Capital, Inc. (NASDAQ: TRIN) is a venture capital firm that specializes in venture debt for growth-stage companies seeking loans and equipment financing.
The company is an internally managed business development company that is a 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 select specialty lenders with a deep knowledge, experience, and track record of lending to growth-stage companies.
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