24/7 Wall Street Insights

• A United Way study found that minimum-wage earners need to work from 80-111 hours per week to afford a small one-bedroom apartment.
• Dividend stocks offer a wide variety of features to suit the criteria of a vast investor majority.
• For investors seeking dividends, click here for a free report on two high dividend stocks.

Dividend stocks possess a combination of traits, which, combined, are hard to find in any other asset class, especially for the individual investor:

• Low admission cost – Limited partnerships, real estate, franchise businesses, and other passive income vehicles all cost tens of thousands of dollars, at a minimum, to participate. Stock investments can be made for as little as $100,, if desired.
• Liquidity – If emergency cash is needed due to unexpected expenses,, selling stocks now make liquid funds available at T+1 settlement, i,e., the next business day after the sale. 
• Diversification – A single entity investment, like a real estate property, can carry isolated risks: a frivolous lawsuit, vandalism, fire, flooding, etc. A portfolio of varied dividend stocks that come from various industrial sectors will mitigate those types of risks, as each sector is unique from the next. 
• Risk Tolerance – Some investors enjoy the casino-like action. Others may suffer sleepless  nights if they see their stock move over a point down in a single trading day. Luckily, there are thousands of dividend-paying stocks available to suit investors of all risk profiles.

24/7 Wall Street has been publishing a voluminous number of articles on dividend stocks over the years. We have an extensive library of stocks and assemble various combinations to highlight for prospective portfolio consideration. The ones in this collection all can be considered high-yielding, with a collective average double digit APY, based on market price at the time of this writing. 

(To receive a complimentary copy of our brand-new report,.“The Next NVIDIA”, click here. It  includes 3 Top Stock Picks poised to take off from the next breakthroughs in AI. One company is a ‘10X Moonshot’ that could become the dominant software play in AI.)

Euronav NV

Stock #1 : Euronav NV (NYSE: EURN)

Yield: 43.6%

Shares for $10,000: 607.15

Annual Passive Income: ~$4,360

Euronav NV is ranked as the third largest oil tanker shipping company in the world, by revenues. Headquartered in Antwerp, Belgium, In addition to its fleet of 155 maritime vessels, Euronav engages in floating, storage and offloading (FSO) crude oil related services. 

Separate from crude oil transport, the company’s ship management services include,  fleet management, technical services, defense management, environmental protection,  commercial and operational management.

Acquired by CMB.TECH earlier this year, Euronav’s ticker in Brussels has changed in July to CMBT, but no changes reported yet for the NYSE at the time of this writing. Frontline’s (NYSE: FRO) purchase of 24  VLCC (Very Large Crude Carrier) ships from Euronav for $2.35 billion and to sell back the 26% of shares it had accumulated to Euronav’s parent, CMB. This sale, along with  a boost in business which saw Euronav revenues increase by $850 million between 2022-2023, the company’s dividend has proportionately been hiked and authorized for shareholders to receive it on July 18th. 

While a 43.6% yield may not be sustainable beyond this year, the failure of the green energy agenda to prove efficient enough to replace oil and gas is already leading a resurgence in the latter. Saudi Arabia’s decision to scrap the Petrodollar has now freed scores of other countries to be able to purchase oil in non-dollar currencies, boosting production and, subsequently,  transport charters. 

Ready Capital Corporation

Stock #2 : Ready Capital Corporation (NYSE: RC)

Yield: 13.43%

Number of shares for $10,000: 1,068.4

Annual Dividend Amount: ~$1,343

A number of publicly traded dividend companies elect to register with the SEC as Real Estate Investment Trusts (REIT), Business Development Companies (BDC) or Energy Master Limited Partnerships (MLP). In exchange for access to the US capital markets for public investment, they must remit 90% of profits back to shareholders.

Founded in 2007, New York based Ready Capital Corporation is a registered REIT that also has a de facto BDC component to its business model. With its $2.8 billion capital base, Ready Capital underwrites and originates both commercial and residential real estate collateralized  loans and mortgages for construction, acquisition, refinance, and other activities. Ready Capital also has a Federal Small Business Association loan preferred lender status due to its small business loan track record. Reachy Capital is ranked #4 in the US for offering SBA 7a (up to $7 million) and USDA Business and Industry financings under $25 million. 

Ready Capital’s gross profit margin has shown a significant increase from 9.58% in late 2013 to 85.36% by mid-2024.This financial trend accompanied revenue expansion from $16.48 million at the end of 2013 to $310.50 million as of mid-2024, indicating a huge business scale-up.

Capital Southwest Corporation

Stock #3 : Capital Southwest Corporation (NASDAQ: CSWC)

Yield: 11.92%

Number of shares for $10,000: 384.46

Annual Dividend Amount: #1,192

For an example of a dedicated BDC, Capital Southwest Corporation is a Dallas, TX based private lending company that has been stealthily building a solid and successful business. Focusing on lower middle market companies, Capital Southwest Corporation prefers supporting clients in the following industries:

• Business services 
• Digital media and advertising 
• Healthcare products and services 
• Value-added distribution 
• Industrial manufacturing and services 
• Consumer products and services 
• Tech-enabled services

Capital Southwest’s sweet spot is between $5 million and $45 million per deal with a backstop up to $55 million. Qualifying US and Canadian clients should have $3 to $25 million EBITDA. Capital Southwest may also do non-control equity co-investments along with its debt financings, which can take the following forms:

• Unitranche debt (with network of first out senior lending relationships) 
• First lien debt 
• Second lien debt

In its 2024 fiscal year, Capital Southwest has grown its investment portfolio by 22% to $1.5 billion.  Pre-tax net investment income rose per share by 18%. Its regular dividend increased by 10% to $2.24 per share and paid an additional $0.23 per share in supplemental dividends. With a 121% regular dividend coverage ratio, investors should feel comfortable about the sustainability of Capital Southwest’s dividend.

Chicago Atlantic Real Estate Finance Inc.

Stock #4 : Chicago Atlantic Real Estate Finance Inc. (NASDAQ: REFI)

Yield: 11.74%

Shares for $10,000: 624.21

Annual Passive Income: ~$1,174

When cannabis became officially legal, a genuine, legal infrastructure for supply chain, from growing and processing to marketing and retail sales, was nonexistent. Whatever was already established was mostly covert or extralegal, to maintain concealment from law enforcement. Chicago Atlantic Real Estate Finance is a REIT that is active in filling the real estate portion of that burgeoning niche demand.

Incorporated only a few years ago in 2021, Chicago Atlantic Real Estate Finance originates, underwrites, and manages commercial real estate mortgages. Of particular note is that Chicago Atlantic Real Estate Finance Inc. has a significant portfolio weighting towards mortgages and real estate backed debt from state government licensed cannabis and CBD operators. The company’s website explains its market niche as follows:

“…the federal prohibition on cannabis use and commercialization hampers commercial and financial activities, creating a limited competition environment for Chicago Atlantic in a highly fragmented market.”

Although headquartered in Chicago, Chicago Atlantic’s market niche makes them one of a handful of experienced, preferred lenders for cannabis industry real estate finance, which gives it entry to potential deals across the country.

Kimbell Royalty Partners LP

Stock #5 : Kimbell Royalty Partners LP (NYSE: KRP)

Yield: 10.88%

Shares for $10,000: 595.94

Annual Income:$1,088

While oil and gas properties often gather premium attention for their energy reserves and extraction potential, lucrative mineral by-product rights and their corresponding royalty interests from those same lands can warrant standalone businesses on their own merits. Such an enterprise is Fort Worth, TX headquartered Kimbell Royalty Partners LP.

Kimbell’s income is derived from direct mineral rights ownership from 17 million gross acres of oil and gas land supporting 129,000 gross wells in 28 states. It presently holds mineral rights positions in proximity to 97% of all onshore rigs in the continental United States. Its largest concentrated activity area is in the Texas-New Mexico Permian Basin site. 

Kimbell incurs zero operating costs or capital expenditures, so profit margins are very fat. Since it is neither a traditional Master Limited Partnership, nor a Royalty Trust, Kimbell investors benefit from tax-advantaged distributions via 1099-DIV, as opposed to K-1.

As of the end of Q1 2024, Kimbell’s holdings account for 16% market share of all active land-based drilling rigs in the continental US. Reported 24,678 barrels of oil equivalent per day production generated $82.2 million beat analysts’ projections by $1.1 million, up 22%. 

Analysts’ 1-year consensus $21 price target indicates a potential upside potential of 31%. Combined with current earnings and dividend payout trajectory, Kimbell Royalty Partners shareholders should have a good dividend protection comfort level along with capital appreciation over the forthcoming 12-months.

Templeton Emerging Markets Income Fund

Stock #6 : Templeton Emerging Markets Income Fund (NYSE: TEI)

Yield: 10.48%

Number of shares for $10,000: 1,855.28

Annual Dividend Amount: ~$1,048

Franklin Templeton is one of the largest and longest active mutual fund firms in US financial history. Its Templeton Emerging Markets Income Fund is a closed end fund that invests its $327 million AUM in international emerging markets bonds. Portfolio holdings are primarily, but not exclusively, sovereign debt. The higher yields are a result of lower investment grade to sub-investment grade Moody’s and S&P ratings due to assessed risk to principal and interest payments. The risk assessment may not always be purely due to low GDP or excess government spending. Geopolitical risk can involve potential exposure to war, natural disasters, terrorism, or other hazards.

A look at Templeton Emerging Markets Income Fund’s holdings show that BB (29.14%) rated  bonds are its largest position, with BBB (27,67%) and B (7.04%) as the next two.

The top 5 largest individual portfolio holdings are:

• Republic of Ecuador 3.5% maturity 7/2035 (5.73%)
• Sultanate of Oman 4.75% maturity 6/2026 (5.69%)
• Arab Republic of Egypt 0% maturity 3/2025 (5.65%)
• Dominican Republic 6.85% maturity 1/2045 (5.16%)
• Asian Development Bank 11.75 maturity 7/2024 (4.19%)

Dorian LPG Ltd.

Stock #7 : Dorian LPG Ltd. (NYSE: LPG)

Yield: 10.17%

Shares for $10,000: 254.58

Annual Passive Income: ~$1,017

Liquid petroleum gas (LPG) comes in many forms and types, but are globally ubiquitous. From propane used for gas stoves, butane used in cigarette lighters,ethylene used in manufacturing of plastic products, to the ingredients in aerosol sprays and refrigeration, LPG is a large and significant petroleum refined product.

Within the maritime shipping sector, different types of cargo requirements will often require 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). 

Headquartered in Stamford, CT, and founded in 2002, 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 Singapore, Athens, Greece, and Copenhagen, Denmark. 

Westlake Chemical Partners LP

Stock #8 : Westlake Chemical Partners LP (NYSE: WLKP)

Yield: 8.06%

Number of shares for $10,000: 428.63

Annual Dividend Amount: ~$806

With regard to ethylene, one of several LPG products shipped on Dorian LPG vessels, its use is essential for the manufacturing of polyvinyl chloride (PVC) and polyethylene (plastics). Houston, TX headquartered Westlake Chemical Partners LP owns three dedicated processing factories in Calvert City, KY and Lake Charles, LA with over 3.7 billion lbs. annual capacity and a 200 mile ethylene pipeline. 

Westlake Chemical Partners is a registered energy LP subsidiary of Westlake Corp.  (NYSE: WLK), a major player in the PVC and polyethylene arena. 

From a dividend investor’s standpoint, it will be a relief to see that Westlake Chemical Partners does not appear to have missed a dividend in over 10 years.

Dividend stocks can vary widely, and as such, any portfolio containing dividend stocks should be followed regularly and frequently. As the above examples show, market conditions and specific news events can also have an extremely positive or negative impact on dividend amounts and payouts. A prudent strategy might wish to include alternate stocks to also follow, just in case a swap out is needed.

Name:	Yield:	Total Dividend Amount:
Euronav NV (NYSE: EURN)	43.6%	~$4,360
Ready Capital Corporation (NYSE: RC)	13.43%	~$1,343
Capital Southwest Corporation (NASDAQ: CSWC)	11.92%	~$1,192
Chicago Atlantic Real Estate Finance Inc. (NASDAQ: REFI)	11.74%	~$1,174
Kimbell Royalty Partners LP (NYSE: KRP)	10.88%	~$1,088
Templeton Emerging Markets Income Fund (NYSE: TEI)	10.48%	~$1,048
Dorian LPG Ltd. (NYSE: LPG)	10.17%	~$1,017
Westlake Chemical Partners LP (NYSE: WLKP)	8.06%	~$806
Total:		$12,028 Annual Passive Dividend Amount

 

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