Many dividend investors seek solid passive income streams from quality ultra-high-yield dividend stocks. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Shared ideas for earning passive income include investments like dividend stocks, bonds, mutual funds, real estate, and additional income-producing side hustles.
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate.
In a world where prices are consistently rising, a monthly check makes sense for many who have bills and expenses due on a 30-day basis. Items like mortgage payments or rent, utility bills, trash collection, and even grocery bills are always due each month, and a steady stream of passive monthly income can be a huge helping hand to meet those obligations.
We screened our 24/7 Wall St. ultra-high-yield monthly dividend stock database, looking for the companies that currently pay the highest monthly dividends. We then looked for those with at least $1 billion in market capitalization and pay-out ratios well below 100%. That is important for investors because these companies pay out less in dividends to shareholders than in earnings on a per-share basis. It is important to remember that these companies are only suitable for investors with a higher risk tolerance. Three top stocks made the cut and are solid ideas now.
Why do we cover dividend stocks?
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.
AGNC Investment
AGNC Investment provides private capital to the housing market in the United States.
This company has paid solid monthly dividends for years; its current yield is 14.85%. AGNC Investment Corp. (NASDAQ: AGNC | AGNC Price Prediction) is a real estate investment trust (REIT) in the United States.
The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which a United States government-sponsored enterprise or agency guarantees the principal and interest payments.
AGNC Investment funds its investments primarily through collateralized borrowings structured as repurchase agreements. It has elected to be taxed as a REIT under the Internal Revenue Code 1986. However, it would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
ARMOUR Residential REIT
ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States.
With a massive 15.40% dividend yield and years of solid performance, this company is a perfect monthly dividend idea. ARMOUR Residential REIT Inc. (NYSE: ARR) invests in residential mortgage-backed securities (MBS) in the United States.
Its securities portfolio primarily consists of securities issued or guaranteed by a U.S. government-sponsored entity (GSE) and the Government National Mortgage Administration backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans, unsecured notes and bonds issued by the GSE and the United States treasuries, and money market instruments.
The company reported a solid third-quarter net income of $65.9 million after reporting a loss in the same period a year earlier. The Vero Beach, Florida-based company reported a profit of $1.21 per share. Earnings, adjusted for non-recurring gains, came to $1 per share.
The real estate investment trust’s revenue was $127.1 million in the period, and its adjusted revenue was $1.8 million.
Ellington Financial
Ellington has been at the forefront of data-driven investing since its founding in 1994.
This quality mortgage REIT company is a favorite across Wall Street and pays a massive 12.58% dividend. Ellington Financial Inc. (NYSE: EFC), through its subsidiary, Ellington Financial Operating Partnership, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States.
The company develops and manages residential mortgage-backed securities (RMBS) backed by:
- Prime jumbo
- Alt-A, manufactured housing, and subprime residential mortgage loans
- RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity
- Residential mortgage loans
- Commercial mortgage-backed securities
- Commercial mortgage loans and other commercial real estate debt
Ellington Financial also provides collateralized loan obligations, mortgage-related and non-mortgage-related derivatives, corporate debt and equity securities, corporate loans, and other strategic investments. The company offers consumer loans and asset-backed securities backed by consumer and commercial assets.
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