In this article, we discuss 15 highest-yielding dividend stocks you can buy. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5Highest Yielding Dividend Stocks You Can Buy.
After delivering a record-breaking performance in 2022, dividend stocks are grabbing the spotlight this year as well. Investors often seek dividend stocks with high yields as they help them to generate stable and passive income. According to a report by Franklin Templeton Investments, high-yield dividend stocks remained stable during periods of market decline, whereas earnings tend to drop during a recession. The report further mentioned that the ICE BofA US High Yield Index outperformed the broader market by 9 percentage points during and after the early 1990s and by 13 percentage points in the early 2000s.
Columbia Business School also conducted research that highlighted the performance of high-yield dividend stocks. The report mentioned that the High Dividend Index delivered an annual average return of 6.16% from January 2000 to May 2010, versus a 4.75% decline in the S&P 500 during the same period. Dividend companies that have raised their payouts for consecutive years are popular among investors, as these companies significantly boost their income. The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG) have raised their payouts for decades, becoming top choices for investors.
Though high yields are crucial to regular income generation, they sometimes carry certain risks with them. Companies that pay out a large portion of their earnings in dividends may have less cash to reinvest in the business, which could limit their ability to grow and adapt to changing market conditions. Moreover, declining sales also result in a drop in share prices, which ultimately leads to high dividend yields. For picking high-dividend stocks, investors must evaluate the respective company’s financial health and basic fundamentals.
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Our Methodology:
For this list, we selected dividend stocks with yields ranging from 11% to 19%, as of February 20. The majority of these stocks belong to the REIT sector, as these companies are required to pay approximately 90% of their income to shareholders as a distribution. The hedge fund sentiment was also measured using data from 920 hedge funds tracked by Insider Monkey in Q3 2022. The stocks are ranked in ascending order of their dividend yields.
15. Global Net Lease, Inc. (NYSE:GNL)
Dividend Yield as of February 20: 11.08%
Global Net Lease, Inc. (NYSE:GNL) is a New York-based real estate investment trust company that owns properties in the US and Western Europe. In November, B. Riley maintained a Buy rating on the stock with a $17 price target, highlighting the company's acquisition rate in the current inflationary environment.
On January 3, Global Net Lease, Inc. (NYSE:GNL) declared a quarterly dividend of $0.40 per share, which fell in line with its previous dividend. The stock has a dividend yield of 11.08%, as of February 20. The company is among the best highest-yielding dividend stocks on our list and can be added to dividend portfolios alongside The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
In the third quarter of 2022, Global Net Lease, Inc. (NYSE:GNL) reported revenue of $92.6 million and its net operating income came in at $84.8 million. During the quarter, the company paid $41.7 million to shareholders in dividends.
As per Insider Monkey's Q3 2022 database, 10 hedge funds owned stakes in Global Net Lease, Inc. (NYSE:GNL), compared with 11 in the previous quarter. The collective value of these stakes is roughly $14 million. Among these hedge funds, AQR Capital Management was the company's leading stakeholder in Q3.
14. Dynex Capital, Inc. (NYSE:DX)
Dividend Yield as of February 20: 11.31%
Dynex Capital, Inc. (NYSE:DX) is a Virginia-based real estate investment trust company that invests in mortgage loans and securities on a leveraged basis. As of December 31, the company's book value per common share came in at $14.73. It ended the year with $600 million in cash and liquid assets.
Dynex Capital, Inc. (NYSE:DX), one of the best highest-yielding dividend stocks, currently pays a monthly dividend of $0.13 per share. The company expects to deliver solid cash dividends in 2023 as well. The stock has a dividend yield of 11.31%, as of February 20.
In January, Credit Suisse upgraded Dynex Capital, Inc. (NYSE:DX) to Outperform with a $15.50 price target. The firm called the company 'the most attractive among the agency-focused mREITs.
At the end of Q3 2022, 9 hedge funds tracked by Insider Monkey reported owning stakes in Dynex Capital, Inc. (NYSE:DX), holding a total value of over $27.8 million.
13. KKR Real Estate Finance Trust Inc. (NYSE:KREF)
Dividend Yield as of February 20: 11.32%
KKR Real Estate Finance Trust Inc. (NYSE:KREF) is an American company that provides customized and structured loans collateralized by commercial real estate. The company currently pays a quarterly dividend of $0.43 per share, and has a dividend yield of 11.32%, as of February 20. It is among the highest-yielding dividend stocks on our list.
In the fourth quarter of 2022, KKR Real Estate Finance Trust Inc. (NYSE:KREF) posted revenue of $56.7 million, which showed a 13.8% growth from the same period last year. At the end of December, the company had nearly $240 million in cash and cash equivalents.
As of the close of Q3 2022, 7 hedge funds tracked by Insider Monkey reported owning stakes in KKR Real Estate Finance Trust Inc. (NYSE:KREF), compared with 10 a quarter earlier. The consolidated value of these stakes is over $16 million. Two Sigma Advisors was one of the company's leading stakeholders in Q3.
12. Redwood Trust, Inc. (NYSE:RWT)
Dividend Yield as of February 20: 11.54%
Redwood Trust, Inc. (NYSE:RWT) is a California-based specialty finance company that specializes in credit-sensitive investments in mortgage-related assets. In the fourth quarter of 2022, the company reported revenue of $27 million, which fell by 46% from the same period last year. It also deployed $74 million of capital into new and third-party investments.
Redwood Trust, Inc. (NYSE:RWT) is one of the highest-yielding dividend stocks with a dividend yield of 11.54%, as of February 20. The company offers a quarterly dividend of $0.23 per share.
At the end of Q3 2022, 15 hedge funds in Insider Monkey's database owned stakes in Redwood Trust, Inc. (NYSE:RWT), up from 14 in the previous quarter. These stakes have a total value of over $35.8 million.
ClearBridge Investments mentioned Redwood Trust, Inc. (NYSE:RWT) in its Q4 2022 investor letter. Here is what the firm has to say:
“We took advantage of the selloff in the financials sector to add a new position in Redwood Trust, Inc. (NYSE:RWT). The company operates as a specialty finance company within the residential mortgage banking and business purpose mortgage banking industries and capitalized as large investment banks shed their mortgage securitization businesses after the 2008 Great Financial Crisis (GFC). Redwood has since expanded to become the industry leader in distribution of loans through whole loan sales.
Additionally, its investment portfolio has been very strong historically, even in the GFC, and its expansion into banking has made it better. We believe that the company’s long-term value creation is substantially underrepresented in its current market price and look forward to it being a high-quality long-term compounder within the portfolio.”
11. Ellington Residential Mortgage REIT (NYSE:EARN)
Dividend Yield as of February 20: 12.05%
Ellington Residential Mortgage REIT (NYSE:EARN) is an American real estate credit company that invests in a wide range of financial assets. In December, JonesTrading initiated its coverage on the stock with a Neutral rating without a price target. The firm presented a positive stance on agency mortgage real estate investment trusts.
Ellington Residential Mortgage REIT (NYSE:EARN) is among the highest-yielding dividend stocks as it pays monthly dividends to shareholders. It currently offers a per-share dividend of $0.08 every month and has a dividend yield of 12.05%, as of February 20.
Ellington Financial Inc. (NYSE:EFC) was a part of 5 hedge fund portfolios in Q3 2022, compared with 4 in the previous quarter. The stakes owned by these hedge funds have a total value of $11.7 million. Among these hedge funds, Renaissance Technologies owned the largest stake in the company.
10. MFA Financial, Inc. (NYSE:MFA)
Dividend Yield as of February 20: 12.73%
MFA Financial, Inc. (NYSE:MFA) is an American real estate investment trust company, based in New York. The company invests in residential mortgage assets. The company offers a quarterly dividend of $0.35 per share and has a dividend yield of 12.73%, as of February 20.
In January, Credit Suisse upgraded MFA Financial, Inc. (NYSE:MFA) to Outperform with a $12.50 price target. The firm appreciated the company's current book value per share.
MFA Financial, Inc. (NYSE:MFA) was a popular buy among hedge funds in Q3 2022 as 19 funds in Insider Monkey’s database owned stakes in the company, compared with 15 in the previous quarter. These stakes are collectively valued at $98.2 million. Balyasny Asset Management was the company’s leading stakeholder in Q3.
9. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of February 20: 13.14%
Ellington Financial Inc. (NYSE:EFC) is a Connecticut-based real estate credit company that invests in a wide range of financial assets. It currently pays a monthly dividend of $0.15 per share and has a dividend yield of 13.14%, as recorded on February 20.
In the third quarter of 2022, Ellington Financial Inc. (NYSE:EFC) reported revenue of $78.6 million, which showed a 95.7% growth from the same period last year. The company's adjusted distributable earnings for the quarter amounted to $26.5 million. It is among the highest-yielding dividend stocks.
Ellington Financial Inc. (NYSE:EFC) was a part of 5 hedge fund portfolios in Q3 2022, compared with 4 in the previous quarter. The stakes owned by these hedge funds have a total value of $11.7 million. Among these hedge funds, Ellington was the company’s leading stakeholder in Q3.
8. Chimera Investment Corporation (NYSE:CIM)
Dividend Yield as of February 20: 13.22%
Chimera Investment Corporation (NYSE:CIM) is an internally-managed real estate investment trust company that specializes in residential mortgage loans. In the fourth quarter of 2022, the company reported revenue of $80.4 million. At the end of December, it had over $264.6 million available in cash and cash equivalents and its total assets amounted to over $13.4 billion.
Chimera Investment Corporation (NYSE:CIM), one of the highest-yielding dividend stocks, currently pays a quarterly dividend of $0.23 per share. The stock's dividend yield on February 20 came in at 13.22%.
At the end of September 2022, 14 hedge funds tracked by Insider Monkey reported owning stakes in Chimera Investment Corporation (NYSE:CIM), up from 12 in the previous quarter. The collective value of these stakes is over $16.7 million.
7. Spok Holdings, Inc. (NASDAQ:SPOK)
Dividend Yield as of February 20: 13.98%
Spok Holdings, Inc. (NASDAQ:SPOK) is a Virginia-based company that offers critical communications solutions to its consumers. The company mainly operates in the healthcare industry. The company currently pays a quarterly dividend of $0.3125 per share and has a dividend yield of 13.98%, as of February 20.
In December, Lake Street initiated its coverage on Spok Holdings, Inc. (NASDAQ:SPOK) with a Buy rating and a $15 price target. The firm appreciated the company's dividend and its high yield.
At the end of Q3 2022, 10 hedge funds owned stakes in Spok Holdings, Inc. (NASDAQ:SPOK), worth over $20.4 million. With over 1.1 million shares, Renaissance Technologies was the company's leading stakeholder in Q3.
6. Cherry Hill Mortgage Investment Corporation (NYSE:CHMI)
Dividend Yield as of February 20: 15.98%
Cherry Hill Mortgage Investment Corporation (NYSE:CHMI) is an American real estate investment trust company, based in New Jersey. The company is among the highest-yielding dividend stocks on our list with a dividend yield of 15.98%, as of February 20. It offers a quarterly dividend of $0.27 per share.
Cherry Hill Mortgage Investment Corporation (NYSE:CHMI) be added to dividend portfolios alongside The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
As of the close of Q3 2022, 4 hedge funds in Insider Monkey’s database owned stakes in Cherry Hill Mortgage Investment Corporation (NYSE:CHMI), the same as in the previous quarter. These stakes have a total value of over $5.1 million.
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Disclosure. None. 15 Highest Yielding Dividend Stocks You Can Buy is originally published on Insider Monkey.
