With the Federal Reserve pushing and holding interest rates near zero, many investors are currently struggling to generate yield today.
Add in a 15% unemployment rate and a volatile market caused by COVID-19, and the task of finding reliable dividends in this environment becomes even more difficult.
Whether you’re in retirement or not, generating consistent income can help you navigate the toughest market cycles.
That’s why I want to bring you three reliable high-yielding dividend stocks to buy now…
Each company pays its shareholders over 10% annually and can help you weather the ups and downs of the unpredictable market we find ourselves in today…
Dividend Stock to Buy Now No. 3: Solar Capital Ltd. (NASDAQ: SLRC)
Dividend Yield: 10%
Solar Capital Ltd is an investment company that primarily finances senior secured loans of private mid-cap companies to generate current income. Since senior secured loans are the first to be paid out in case of bankruptcy, it’s safer than all other forms of debt.
Solar Cap’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The company generates revenue primarily in the form of interest; dividend income and others. And that income is then distributed straight into shareholders’ pockets quarterly.
The business hasn’t missed a dividend payment since it went public back in 2010… And I don’t foresee it missing one in the foreseeable future, no matter which way the market turns next.
Historically, the stock has paid an average dividend of about 8%. But since the recent market pullback in March, you can now lock in the stock for a 10% annual yield.
Currently trading for around $16 per share , I think investors could reasonably expect SLRC to get back to $20-$22 by the end of the year. That represents potential gains of 22%-34% over the next six months.
Dividend Stock to Buy Now No. 2: Cherry Hill Mortgage Investment Corp. (NYSE: CHMI)
Dividend Yield: 11.75%
Cherry Hill Mortgage Investment Corp manages real estate in the United States. The company invests in residential mortgage assets with the objective of generating high current yields and risk-adjusted total returns for its stockholders over the long-term.
And since it operates as a REIT, it’s required to pay a minimum of 90% of all taxable income in the form of dividends to shareholders each year.
Cherry Hill generates most of its revenue from residential mortgage-backed securities (RMBS), in the form of Interest income earned for servicing mortgage loans.
Since going public in 2013, CHMI has never missed a dividend payment. And right now, you can lock in shares for an 11.75% annual yield.
After already rising 232%, from its April low $2.76 to $9.17 today, this stock has a ton of positive momentum that I expect to continue over the next 6-18 months.
By the end of 2020, I anticipate shares getting to the $16-$18 range. That would be a 74%-96% gain from its current price.
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Dividend Stock to Buy Now No. 1: Starwood Property Trust, Inc. (NYSE: STWD)
Dividend Yield: 12.5%
Starwood Property Trust Inc also an American real estate investment trust (REIT) required to distribute at least 90% of its taxable income as dividends to shareholders. But instead of managing residential mortgages, Starwood originates, acquires, and manages commercial mortgage loans and commercial mortgage-backed securities in the United States and Europe.
The company operates a commercial lending segment, infrastructure lending segment, property segment, and investing and servicing segment. The former acquires and finances mortgages with primary lien positions.
The collateral for these mortgages is mainly office and hospitality properties in Western and Northeastern America. Starwood's investing and servicing unit primarily generates revenue from the acquisition and sale of commercial mortgage-backed securities.
And right now, the business is doing so well that STWD can afford to pay a massive 12.5% dividend for the foreseeable future. By my estimations, it could even rise in the next quarter or two.
Like the previous two stocks mentioned, Starwood has also never missed a dividend payment since going public in 2009. In fact, the company has increased its dividend 4,700% – from $0.01 in 2009 to $0.48 today.
Shares of STWD are currently trading for $15.40. And I think they’re significantly undervalued. My expectation is for shares to run to $30-$33 over the next 6-18 months. That means a potential return for investors of 95%-114%.
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