24/7 Wall St. Insights
- Ultra-high-yield stocks offer big streams of passive income.
- If interest rates trend lower big dividend stocks could be in big demand.
- Grab this free report now: Access 2 legendary, high-yield dividend stocks Wall Street loves.
Investors love dividend stocks, especially the ultra-high-yield variety, because they offer a significant income stream and massive total return potential. 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.
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.
We screened our 24/7 Wall St. ultra-high-yield dividend stock database, looking for the best stocks that pay at least a 10% dividend. We specifically screened for companies that can trade higher and pay double-digit dividends. The two combined could offer investors the total return home run package and we found five companies that check all the boxes. Check out these incredible dividend legends.
Franklin BSP Realty Trust
Trading under $15 with a 10.80% dividend this stock offers incredible potential over the next year. Franklin BSP Realty Trust Inc. (NYSE: FBRT) is a real estate finance company, originates, acquires, and manages a portfolio of commercial real estate debt investments secured by properties located in the United States.
The company originates conduit loans and invests in commercial real estate securities.
It also owns real estate acquired through foreclosure and deed in lieu of foreclosure and purchased for investment. It also invests in commercial real estate debt investments, which include:
- First mortgage loans
- Mezzanine loans
- Bridge loans
- Other loans related to commercial real estate
International Seaways
Yielding 10.12% and offering solid upside potential this company makes sense for growth and income investors now. International Seaways Inc. (NYSE: INSW) owns and operates a fleet of oceangoing vessels for transporting crude oil and petroleum products in the international flag trade.
It operates in two segments:
- Crude Tankers
- Product Carriers
As of December 31, 2023, the company owned a fleet of 73 vessels. It serves independent and state-owned oil companies, oil traders, refinery operators, and international government entities.
Despite the shares being up over 33% this year, the increase in shipping prices and the continued demand for crude oil, especially in China, bode well for the stock. With earnings expected in the first week of August, investors still have time to position themselves in the company, and any pullback would be an opportune time to jump in.
FS KKR
This is a well-known name on Wall Street, offers a solid entry point at current levels, and pays a staggering 14.43 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 to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
Horizon Technology Finance
Paying a stout 10.52% dividend, this stock has tremendous upside potential. Horizon Technology Finance Corp. (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.
Saratoga Investment
While off the radar, this stock pays a whopping 12.73% dividend and shares can be acquired just above a 52-week trading low. Saratoga Investment Corp. (NYSE: SAR) is a business development company specializing in:
- Leveraged and management buyouts
- Acquisition financings
- Growth financings
- Recapitalization
- Debt refinancing
- Transitional financing transactions at the lower end of middle-market companies
It structures its investments as debt and equity by investing through first—and second-lien loans, mezzanine debt, co-investments, select high-yield bonds, senior secured bonds, unsecured bonds, and preferred and common equity.
The firm prefers to invest in:
- Aerospace
- Automotive aftermarket, and services
- Business products and services
- Consumer products and services
- Education
- Environmental services
- Industrial services
- Financial services
- Food and beverage
- Healthcare products and services
- Logistics
- Distribution
- Manufacturing
- Restaurant services
- Food services,
- Software services
- Technology services
- Specialty chemicals
- Media
- Telecommunications
It seeks to invest in the United States and primarily invests $5 million to $75 million in companies with EBITDA of $2 million or greater and revenues of $5 million to $250 million. The firm prefers to take a majority stake.
It invests through direct lending and participation in loan syndicates.
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