24/7 Insights
- Those with a higher risk appetite will love ultra-high dividend stocks.
- Passive income generated from stocks can be huge to investors.
- Access 2 legendary, high-yield dividend stocks Wall Street loves.
Investors are drawn to dividend stocks, particularly the ultra-high yield variety. These stocks offer a significant income stream and the potential for massive total returns. In the context of dividend stocks, total return includes the stock’s appreciation in value and the dividends it pays. This measure of return is a key factor in their appeal.
At 247 Wall St., we consistently emphasize the potential of total return to our readers, as it is one of the most effective ways to enhance the prospects of overall investing success. Once again, total return is the collective increase in a stock’s value plus dividends.
For younger investors or those on a tight budget, investing to generate consistent passive income can be daunting because many top dividend stocks trade anywhere from $25 to over $100 per share. Realizing any significant return on investment can be challenging with a small investing capital base of $500.
We screened our 24/7 Wall St. dividend income database for solid, lower-priced stocks that pay ultra-high dividends. We found three that investors can purchase with as little as $500 and start generating positive total returns and all trade at less than $15 per share.
Arbor Realty Trust
Source: jewhyte / iStock via Getty Images
This company trades at a ridiculous 8.8 times estimated 2024 earnings and pays a massive 12.18% 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
- Preferred and direct equity and real estate-related joint ventures
- Real estate-related notes
- 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 seeking conventional, workforce, and affordable single-family housing
Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs.
Cato Corporation
Source: Eva-Katalin / Getty Images
Paying shareholders a gigantic 11.18% dividend, this company, founded in 1946, could attract value buyers at current trading levels. Cato Corp. (NYSE: CATO) and its subsidiaries operate as a specialty fashion apparel and accessories retailer in the southeastern United States.
It operates through two segments:
- Retail
- Credit
The company’s stores and e-commerce websites offer a range of apparel and accessories, including:
- Dressy, career, and casual sportswear
- Dresses
- Coats
- Shoes
- Lingerie
- Costume jewelry
- Handbags
- Men’s wear
- Lines for kids and infants
It operates its stores and e-commerce websites under these names:
- Cato
- Cato Fashions
- Cato Plus
- It’s Fashion
- Fashion Metro
- Versona names
It also provides credit card services and layaway plans for its customers.
Three Stocks That Have Seen Higher Share Gains Than Super Micro Computer
Dynex Capital
Source: SARINYAPINNGAM / iStock via Getty Images
Paying a hefty 12.96% dividend, Dynex Capital Inc. (NYSE: DX) is a passive income champion for more aggressive investors. It 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 mortgage-backed securities (MBS), including residential, commercial, and 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 has no such payment guarantee. 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.
∴
ALERT: Take This Retirement Quiz Now (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
