When 30-year mortgage rates elevate to current levels, which are over 7.1%, conventional wisdom would predict that home prices would start to come down, due to less buyers being able to afford them. However, the median price for homes in March was reportedly $384,500, up from $350,000 from a year ago. 

This anomaly is being explained by the number of fixed mortgages that locked in at 3% when rates were artificially low, thanks to Federal Reserve rate cuts from decades before. Those people are standing pat, since refinancing at present rates is out of the question, and finding a new home with a new mortgage at currently overinflated rates is economically unfeasible for the vast majority of people.

24/7 Wall Street has published numerous articles about dividend paying stocks as an excellent source of passive income, which can make a crucial difference for many families whose household budgets are already stretched to the limit. The 24/7 database contains a wide list of dividend paying stocks from around the world, and the right assortment can be combined to generate double digit yields for savvy investors. The following stocks below can generate a cumulative annual passive dividend income sum of over $15,000 with a $20,000 investment in each one, based on prices at the time of this writing.

Trinity Capital, Inc.

• Stock #1 : Trinity Capital, Inc. (NASDAQ:TRIN)
• Yield: 13.88%
• Shares for $20,000: 1,343
• Annual Passive Income: ~$2,776

Phoenix, AZ based Trinity Capital is a Business Development Company (BDC) that has exponentially grown its AUM to over $1 billion (as of December 2023) in the last 16 years. Founded by Steve Brown on an initial $8 million capitalization, it specializes in the risky niche Venture Debt sector, Trinity Capital originates equipment financings, secured loans, and other kinds of investment banking based financial services for early-stage and growth-stage companies in a variety of industries.

Trinity Capital is not averse to collaborative efforts. In April, 2024, a press release stated that Trinity Capital and Silicon Valley Bank had jointly closed a $125 million warehouse financing facility to fintech start-up Parafin. Trinity is also doing well enough business-wise to have several public $100 million debt note issues on its books: a 6.0% maturing in 2025, and a new 7.875% issue due in 2029.

Morningstar recently gave the company an investment grade BBB rating with a “stable” outlook. Considering the relatively high risk of default or bankruptcy from their clients, as well as its own debt loads, this is a very strong validation of the Trinity Capital business model and its future prospects.  

Fidus Investment Corporation

• Stock #2 : Fidus Investment Corporation (NASDAQ: FDUS)
• Yield: 12.92%
• Shares for $20,000: 982
• Annual Passive Income: ~$2,584

Asset management and Business Development Company Fidus Investment Corporation has built an impressive track record of savvy growth finance deals. Preferring specific industries, such as aerospace and defense, consumer retail, information technology, healthcare, transportation and logistics, and business services, Fidus has a sweet spot for target companies with revenues between $10 million and $150 million with EBITDA between $3 million and $20 million. Headquartered in Evanston, IL, the average Fidus financing deal size is between $5 million and $15 million. Financing can take a variety of configurations, including, but not limited to leveraged buyouts, mezzanine debt, subordinated loans, senior debt, preferred stock, or other types of secured loan finance structures. 

While Fidus will support use of proceeds for LBOs, acquisitions, change of ownership, recapitalization, and growth oriented expansions, it will not support turnaround or distressed situations.

Abrdn World Healthcare Fund

 

• Stock  #3: Abrdn World Healthcare Fund (NYSE: THW)
• Yield: 12.88%
• Shares for $20,000: 1,586
• Annual Passive Income: ~$2,576

Formerly known as the Tekla World Healthcare Fund until it was acquired by Abrdn Inc. in 2023, Abrdn World Healthcare Fund is a Boston, MA based closed-end fund that invests in both equity and fixed-income securities issued by global public healthcare companies.  

With over $530 million AUM, the fund’s top three largest sub-sectors as of March 2024 are: Pharmaceuticals at 39.1%, Biotech at 15.5%, and Healthcare Equipment closely following at 15.4%. The fund’s three largest positions are: Eli Lilly and Co. (NYSE: LLY), UnitedHealth Group Inc.  (NYSE: UHC), and Johnson and Johnson (NYSE: JNJ).

Geographically, Abrdn World Healthcare Fund has roughly 56% exposure in US domestic companies, with 20.4% from US companies with sizable foreign revenues. Switzerland (5.3%), UK (5.2%), and Denmark (4.1%) are the top 3 foreign nations. Dividends are paid monthly.

Mainstay CBRE Global Infrastructure Megatrends Term Fund

 

• Stock  #4: Mainstay CBRE Global Infrastructure Megatrends Term Fund (NYSE: MEGI)
• Yield: 12.44%
• Shares for $20,000: 1669
• Annual Passive Income: ~$2,488

Not unlike the replicant Roy Batty from the film and novel Blade Runner, the Mainstay CBRE Global Infrastructure Megatrends Term Fund has specific themes to define its purpose and limited lifespan within which it should maximize its performance. In Blade Runner, Roy Batty was created to be a futuristic soldier with a maximum 4-year lifespan. In the case of MEGI, its theme imperatives are:

• Decarbonization (53.9% of portfolio as of April 2024)
• Asset Modernization (31.2% of portfolio as of April 2024)
• Digital Transformation (14.9% of portfolio as of April 2024)

As for lifespan, MEGI was structured to have a 12-year term, and is scheduled for liquidation on or about December 15, 2033. With its $988 million AUM managed by NY Life Investments, MEGI is a closed-end mutual fund that invests in global common and preferred stocks that engage in business activities that are simpatico with the fund’s themes. As of April, 2024, 87.8% of portfolio assets are in common stocks with 12.2% in preferreds, options, cash or equivalents.  Dividends are paid monthly.

The top holdings of MEGI are: Enel SpA (OTC: ENLAY) – 8.6%; National Grid (NYSE: NGG) – 5.7%; and Enbridge, Inc. (NYSE: ENB) – 5.1%. Geographically, MEGI has exposure in the US (49.1%), Europe (34.9%), and Asia (16%). 

Western Asset Emerging Debt Fund

• Stock #5  : Western Asset Emerging Debt Fund (NYSE: EMD)
• Yield: 11.23%
• Shares for $20,000: 2,195
• Annual Passive Income: ~$2,246

Jointly managed out of New York by Western Asset and Legg Mason under the auspices of parent company Franklin Templeton, the Western Asset Emerging Debt Fund is a closed-end mutual fund with $872 million AUM that invests in international bonds issued from emerging market countries. 

Sector wise, EMD holds 48.45% sovereign bonds, 29.4% corporates, and 12.19% Quasi-Sovereign bonds. The average maturities are roughly 14 years, although their duration in the portfolio is 7.6 years. As one might expect from an emerging market focused portfolio, 31.63% of the bonds are rated BB, 31.01% are BBB, and 18.65% are B. 

The top four largest holdings are: 1) Mexican Bonos 5.0% cpn, 3/25 (Sovereign), 2) Republic of Indonesia 5.25% cpn, 1/42 (Sovereign), 3) Petroleos 5.35% cpn, 2/28 (PEMEX – Quasi-Sovereign), and 4) Qatar Government int’l 4.817% cpn, 3/49 (Sovereign). 

Oaktree Specialty Lending Corporation

• Stock #6  : Oaktree Specialty Lending Corporation (NASDAQ: OCSL)
• Yield: 11.22%
• Shares for $20,000: 1,017
• Annual Passive Income: ~$2,244

A BDC headquartered in Los Angeles, CA, Oaktree Specialty Lending Corporation provides finance services for early development stage and middle stage US companies with an enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. 

Preferring transactions between $5 million and $75 million in the form of one-stop, first lien and second lien debt investments, Oaktree may also include an equity component in the mix. In certain instances, Oaktree can go as high as underwriting $100 million for a deal, if warranted. 

Other types of transactions can take the form of bridge loans, mezzanine financing, or even unsecured loans, with use of proceeds ranging from expansions, acquisitions, and management buyouts.

British American Tobacco PLC

• Stock #7  : British American Tobacco PLC (NYSE: BTI)
• Yield: 10.11%
• Shares for $20,000: 676
• Annual Passive Income: ~$2,022

Ahead in total revenue, but slightly behind in tobacco volume and market cap, with US rivals Philip Morris and Altria for global bragging rights as the biggest listed tobacco company on Earth, British American Tobacco plc is based in London, England. Its international tobacco brands are well known throughout the US, UK, China and Europe under brand names like: Camel, Lucky Strike, Dunhill, Kent, Pall Mall, Newport, Shuang Xi, and others. 

Additionally, BTI owns 29% of India’s ITC Ltd. and also provides other tobacco products, such as snuff and snus, as well as e-cig vapes under the Vuse brand. 

Dorian LPG Ltd.

 

• Stock #8  : Dorian LPG Ltd. (NYSE: LPG)
• Yield: 9.78%
• Shares for $20,000: 479
• Annual Passive Income: ~$1,956

Within the maritime shipping sector, different types of cargo requirements will often demand specially equipped vessels, which can create their own sector categories. Dorian LPG Ltd. is a shipping company that has developed its entire business model around the transportation of Liquified Petroleum Gas (LPG). 

Founded in 2002 and headquartered in Stamford, CT, Dorian LPG Ltd. is one of the leading LPG shipping companies in the industry. Armed with a 25 vessel fleet of very large gas carrier (VLGC) ships, Dorian’s carriers can transport an aggregate total of approximately 2.1 million cubic meters of LPG. The company also has offices in Athens, Greece and Copenhagen, Denmark.

Name:	Yield:	Annual Dividend:
Trinity Capital, Inc. (NASDAQ:TRIN)	13.88%	$2,776
Fidus Investment Corporation (NASDAQ: FDUS)	12.92%	$2,584
Abrdn World Healthcare Fund (NYSE: THW)	12.88%	$2,576
Mainstay CBRE Global Infrastructure Megatrends Term Fund (NYSE: MEGI)	12.44%	$2,488
Western Asset Emerging Debt Fund (NYSE: EMD)	11.23%	$2,246
Oaktree Specialty Lending Corporation (NASDAQ: OCSL)	11.22%	$2,244
British American Tobacco PLC (NYSE: BTI)	10.11%	$2,022
Dorian LPG Ltd. (NYSE: LPG)	9.78%	$1,956
TOTAL:		$16,116

 

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