24/7 Insights

• Dividend stocks offer investors the opportunity to increase investment total return.
• Lower-priced dividend shares allow investors to build a larger position.
• Check out this free report: Access 2 legendary, high-yield dividend stocks Wall Street loves.

Dividend stocks are trusted among investors. They offer a secure income stream and a promising path for total return. Total return, a comprehensive measure of investment performance, includes interest, capital gains, dividends, and distributions realized over time. 

Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend. 

As mentioned, lower-priced dividend stocks help investors acquire more shares, which in turn helps increase the passive income stream those stocks can produce.

We screened our 24/7 Wall St. dividend stock database for solid stock prices under $10 that offer solid and dependable dividends and have outstanding upside potential. Five companies are outstanding to add to portfolios now, and all are rated Buy at top firms on Wall Street.

Why do we cover dividend stocks?

Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Barings BDC

This business development company is an industry leader and pays a massive 10.54% 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, and senior secured private debt investments in private middle-market companies operating across various industries.

The firm 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. And it invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor-backed.

Cato

Paying shareholders a gigantic 12.49% dividend, this company, founded in 1946, could attract value buyers at current trading levels. The 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

It also provides credit card services and layaway plans for its customers.

Medical Properties Trust

Medical Properties Trust Inc. (NYSE: MPW) stands out in the health care industry and pays a rich 11.93% dividend. It acquires, develops, and invests in health care facilities, leasing them to healthcare operating companies and providers.

Medical Properties Trust’s unique position is further enhanced by its provision of mortgage loans, working capital, and other term loans to its tenants/borrowers. This, coupled with a massive 12.80% dividend offers investors incredible value at current price levels.

The company has a massive $18.3 billion portfolio of properties, most acute care facilities.

The stock has rallied recently on news of substantial asset sales and decent earnings, including selling five hospitals in New Jersey and California to Prime Healthcare for $350 million and five hospitals in Utah for $866 million.

Wall Street has applauded the asset sales, and with 206 million shares sold short, representing a stunning 48% of the float, a huge short squeeze could be in order.

Prospect Capital

Hedge Funds love this top Business development company, and the gigantic 13% dividend makes it a potential total return home run. Prospect Capital Corp. (NASDAQ: PSEC) specializes in the middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending, and bridge transactions.

It also invests in the multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second-lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses.

Prospect Capital focuses on both primary origination and secondary loans/portfolios and invests in situations such as debt financing for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, and real estate financings/investments.

The company invests in the following sectors and business silos:

• Aerospace and defense
• Chemicals
• Conglomerate and consumer services
• Ecological
• Electronics
• Financial services
• Machinery and manufacturing
• Media
• Pharmaceuticals
• Retail
• Software
• Specialty minerals
• Textiles and leather
• Transportation,
• Oil gas and coal production

In addition to favoring materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors.

Five All-American 4th of July Dividend Stocks to Buy for Solid Passive Income

Uniti Group

Way off the radar, this specialty company delivers a massive 10.68% dividend. Uniti Group Inc. (NASDAQ: UNIT) is an internally managed real estate investment trust engaged in the acquisition and construction of mission-critical communications infrastructure and is a leading provider of fiber and other wireless solutions for the communications industry.

As of December 31, 2023, Uniti owns approximately 140,000 fiber route miles, 8.5 million fiber strand miles, and other communications real estate throughout the United States.

Uniti is not resting on its laurels. The company recently announced a significant network expansion in Huntsville, Alabama, one of its existing 30 enterprise markets. This expansion, spanning approximately 70 route miles, is not just a move to increase its footprint. It’s a strategic decision to support one of its hyperscale customers, demonstrating Uniti’s forward-thinking approach and potential for future success.

Uniti provides multiple conduits and high-strand count fiber to its hyper-scale customer to connect key data center locations within the Huntsville metropolitan area and tie in diverse, long-haul routes connecting Huntsville to other regional and national data center markets.

Uniti Group announced in May a merger agreement with Windstream Holdings II, LLC for an estimated $13.4 billion. The merger will combine Uniti’s wholesale fiber network with Windstream’s Fiber-to-the-Home (FTTH) business to create a fiber provider that can compete in Tier II and III markets across the United States. The combined company will have more than 1 million customers and the potential to reach 5 million, with a strong presence in the Midwest and Southeast and is expected to close in the second half of 2025.

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