Let’s face it, the stock market's a casino right now. One minute it's soaring on the hope of Fed rate cuts, the next it's tanking on whispers of stubborn inflation. It’s enough to give even the most seasoned investor whiplash. While the talking heads on CNBC are obsessing over the “Magnificent Seven” tech stocks, smart investors like you and me know the real money's made elsewhere. Especially in a volatile market like this one.
That’s why we're diving deep into the world of monthly dividend payers – those unsung heroes of income investing that provide a steady stream of cash, no matter what the market's doing. And let me tell you, we've uncovered some absolute gems, hidden away from the mainstream hype. These three “under-the-radar” stocks are handing out yields north of 10%, and they have the fundamentals to back them up.
#1 AGNC Investment Corp. (AGNC) – A High-Yield Powerhouse Built for Volatility
AGNC Investment Corp. is a mortgage real estate investment trust (REIT) that invests primarily in agency mortgage-backed securities (MBS). This means they're buying up bundles of mortgages backed by the government. Think of it as an income stream secured by Uncle Sam himself, a pretty sweet deal in uncertain times like these.
Now, I know what you’re thinking: “Mortgages? Didn't those blow up the economy back in ‘08?”. Sure, but this time it's different. AGNC focuses on agency MBS, meaning those mortgages have government backing, significantly reducing the risk. They've also been weathering the storm remarkably well.
AGNC Investment Corp. (AGNC) announced its financial results for the second quarter of 2024 on July 22, 2024. The company reported a comprehensive loss of $(0.13) per common share, which included a net loss of $(0.11) per common share and an additional $(0.02) per common share in other comprehensive loss (OCI) on investments marked-to market through OCI.
Sure, on paper, a loss is a loss! But remember, AGNC makes money by collecting interest on those mortgage bundles. As interest rates fall, the value of their existing holdings could increase, setting them up for a big rebound. Right now AGNC offers a forward yield over 14% – that's pure cash flow hitting your account every single month. I don't know about you, but I'm not finding those kinds of returns in the tech sector.
#2 Oxford Square Capital (OXSQ) – Tapping into the Power of Under-the-Radar Loans
If you don't know about Business Development Companies (BDCs) yet, it's time to get acquainted. They're like mini-banks, only they lend to smaller, high-growth businesses, often at very attractive rates. And Oxford Square Capital (OXSQ) is one of the best in the game, with a savvy management team and diversified portfolio that's generating some serious income.
OXSQ's secret weapon? They specialize in financing early and middle-stage businesses. These aren't your household names, but that's where the exciting growth potential lies. And thanks to their focus on first and second-lien loans, they're getting paid handsomely for the risk they're taking.
Further, the weighted average yield of the company’s debt investments was 13.7% at current cost, down from 13.9% in the previous quarter.
That 13.7% yield on its debt investments translates into a monster monthly dividend for shareholders. OXQS is currently paying out a forward yield of over 14%. While most investors are chasing the crowded tech trade, OXSQ is quietly building a portfolio of high-yielding loans with the potential to outperform in the years ahead.
#3 Horizon Technology Finance (HRZN) – Riding the Tech Wave – With a 12% Yield.
Now, before you think I’ve completely abandoned the tech sector, hear me out. Horizon Technology Finance (HRZN) is a BDC that focuses on lending to – you guessed it – technology companies! Think early-stage software, biotech, and healthcare companies, the kind that could be the “next big thing,” but haven’t quite made it yet.
HZRN carefully selects companies with high-growth potential, offering them the capital they need to scale their operations. They make money by charging interest on those loans – and trust me, they're charging a premium for the risk they’re taking.
More specifically, the company’s dollar-weighted annualized yield on average debt investments in Q2 of 2024 and Q2 of 2023 was 15.9% and 16.3%, respectively.
That lending strategy translates to an incredible 11.9% forward dividend yield, paid out to shareholders like clockwork, every single month. See, you can play the tech game and collect a fat income stream at the same time!
Time to ditch the “conventional wisdom” and embrace the power of monthly dividends.
The mainstream financial media wants you to believe that the only way to make money is by chasing the latest tech fads. But the reality is, the real opportunities often lie in the overlooked, the undervalued, and the misunderstood. These three monthly dividend stocks are proof positive that you don't need to sacrifice yield for growth or chase risky trends to build wealth. Do yourself a favor and download my free report detailing everything you need to know about monthly dividend payers.
Tomorrow, we're diving into the world of REITs. Why are so many major analysts suddenly bullish on them? And how can you jump on the bandwagon before everyone else? Stay tuned!
