3 Strong Buy Ultra-High-Yield Dividend Stocks You Probably Never Heard Of

By Lee Jackson Published May 26, 7:19AM EDT

Quick Read

The market could see a big summer rally if more tariff deals are announced.
Don’t look for a Federal Reserve interest rate cut until later this year.
Some great companies that few people know pay big and reliable dividends.

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3 Strong Buy Ultra-High-Yield Dividend Stocks You Probably Never Heard Of — © Bet_Noire / iStock via Getty Images

Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial 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. For example, if you buy a stock at $20 that pays a 3% dividend and it rises to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid. The higher the dividend a company pays, the greater the odds are for total return success.

There are over 12,000 publicly traded stocks in the United States; not even the most intelligent investors with the best tools can immediately find them. Many investors and traders typically maintain a small list of key stocks they follow when seeking capital gains or high-yield dividends. We decided to screen our 24/7 Wall St. high-yield database, looking for obscure yet solid companies that pay substantial dividends with strong dividend coverage you may have never heard of. Three well-run companies hit our screens, and all look like timely ideas now, and all have Buy ratings at top Wall Street firms.

Why do we cover high-yield dividend stocks?

High-yield dividend stocks offer investors a reliable source of passive income. The ability to generate revenue without requiring the earner’s continuous active effort characterizes passive income. That makes it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Ituran Location and Control

Located in Israel, this virtually unknown company could be a total return home run. Ituran Location and Control Ltd. (NASDAQ: ITRN) is a provider of location-based services, comprising stolen vehicle recovery (SVR), fleet management services, and other tracking services. The Company also provides wireless communication products used in connection with its location-based services and various other applications.

Its operations consist of two segments:

Location-based services
Wireless communications products

The location-based services segment comprises SVR and tracking services, fleet management, and value-added services, including personal locator services and concierge services.

Its wireless communications products segment comprises short- and medium-range two-way machine-to-machine wireless communications products used for various applications, including automatic vehicle location (AVL) and automatic vehicle identification. It primarily provides its services and sells and leases its products in Israel, Brazil, Argentina, and the United States.

Barclays has a Buy rating with a $50 target price.

Northern Oil and Gas

With a rich dividend and the energy sector getting punished over the last month, this stock is a steal at current levels. Northern Oil and Gas Inc. (NYSE: NOG | NOG Price Prediction) is a real asset company that focuses on acquiring and investing in non-operated minority working and mineral interests in the hydrocarbon-producing basins.

The company is engaged as a non-operator in the acquisition, exploration, development, and production of oil and natural gas properties in the United States, primarily in the Williston Basin, the Permian Basin, the Appalachian Basin, and the Uinta Basin.

Its portfolio comprises 300,000 acres of low-breakeven land with over 10,000 wells. Diversified by basin and across commodity type, its wells are operated by over 100 public and private operators.

Northern Oil and Gas engages in oil and natural gas exploration and production by participating on a proportionate basis alongside third-party interests in wells drilled and completed in spacing units that include its acreage. Additionally, it acquires wellbore-only working interests in wells where it does not hold the underlying leasehold interests from third parties.

Bank of America has a Buy rating with a $41 price objective.

USA Compression Partners

USA Compression Partners L.P. (NYSE: USAC) provides natural gas compression services under term customer contracts. While perhaps less known than their peers, this top company pays shareholders one of the largest dividends in the industry.

The company offers compression services to:

Oil companies and independent producers
Processors
Gatherers
Transporters of natural gas and crude oil, as well as operating stations

USA Compression Partners primarily provides natural gas compression services to infrastructure applications, including centralized natural gas gathering systems, processing facilities, and gas lift applications for crude oil wells.

Raymond James also has an Outperform rating on this stock, along with a $30 target price.

Four Strong Buy Bargain Energy Stocks With Ultra-High-Yield Dividend

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.