Highest Paying Dividend Stocks to Buy Now
Dividend stocks are often touted as a great way for investors to earn some consistent income, and they certainly can be. However, some dividend stocks pay a dividend of 1% or even less which makes it difficult to earn a significant return from dividends alone. That said, some industries can often pay a healthy dividend to their investors, which is why this article will take a look at a few of the highest paying dividend stocks.
Oftentimes, the companies that pay a low dividend are startups that may be generating a lot of buzz, but these newer companies are heavily investing in their business, leaving little room to pay dividends. On the other hand, more static industries that earn a regular income, such as real estate, utilities and energy, can often pay a sizable dividend to their investors.
In that context, it should be noted that dividends can be too high. Double-digit dividends can be a warning sign and may indicate that a business is struggling to stay afloat. Hence, they might be desperately trying to attract investors. This is why mainstays like real estate are often a good choice (though not the only one).
Hence, we’ll take a look at four real estate stocks and one mobile operator to bring in some consistent dividends. Here are the highest paying dividend stocks right now:
- Annaly Capital Management (NYSE: NLY)
- Chimera Investment Corp. (NYSE: CIM)
- AGNC Investment Corp. (Nasdaq: AGNC)
- New York Mortgage Trust (Nasdaq: NYMT)
- Mobile TeleSystems (NYSE: MBT)
Top Paying Dividend Stocks to Buy
Each of these stocks pays a high dividend on a consistent basis. Let’s see how they do it.
No. 5 Annaly Capital Management
Dividend yield: 11.14%
Annaly Capital Management is a mortgage real estate investment trust (REIT) based in New York. It borrows money via short-term repurchase agreements to invest in asset-backed securities. In total, it has $94 billion in assets under management. Its business model is aimed at delivering the highest returns to investors, regardless of economic cycles. Hence, this stock can be a strong investment even during periods of high inflation or a recession.
NLY isn’t some stock that only recently started paying strong dividends or just wants to attract investors. In fact, it has paid more than $20 billion in dividends since its IPO, making it one of the highest paying dividend stocks. And it has an 11.3% indicative dividend yield. The company recently tallied its lowest profit margin of the past four quarters with a profit of 29.35%. The previous quarter, its profit margin was 126.66%.
No. 4 Chimera Investment Corp.
Dividend yield: 9.1%
Chimera Investment Corp. is another REIT, focusing on residential mortgage loans, asset securitization and mortgage-related securities. Chimera is based in New York and has $3.8 billion in total capital. It has issued both common and preferred stock and between the two types, it has issued a total of $5.5 billion in dividends to shareholders.
Real estate stocks tend to be the highest paying dividend stocks, and CIM is no exception. Its strategy of investing in a combination of loans, agency residential mortgage-backed securities (RMBS) and agency commercial mortgage-backed securities (CMBS) allows it to pay a healthy dividend of over 9%.
No. 3 AGNC Investment Corp.
Dividend yield: 9.81%
You may have sensed a real estate theme by now. And AGNC is no exception. Indeed, this company is another REIT investing in agency RMBS on a leveraged basis. AGNC was founded in 2008 and is headquartered in Bethesda, Maryland. Also like many such companies, it finances holdings through collateralized borrowings structured as repurchase agreements.
Like all other REITs, AGNC is required to distribute 90% of its taxable income as dividends. This allows it to be exempt from corporate taxes, so it can pay consistent dividends. The company made a huge profit in Q4 2021, posting a positive 385.71% in that column despite revenue of negative $7 million.
Keep reading for more information on the highest paying dividend stocks.
No. 2 New York Mortgage Trust
Dividend yield: 10.72%
New York Mortgage Trust is, of course, another mortgage REIT based in New York. It was founded in 2003 and aims to deliver stable distributions over diverse economic conditions. As we will see, it has indeed done that, issuing dividends that are only periodically adjusted according to its share price. It has $3.3 billion in assets with a 0.1x portfolio leverage ratio.
NYMT has consistently paid a strong dividend to investors, most recently issuing a dividend of 10 cents per share. For perspective, its current share price is a little under $4 and it issues quarterly dividends. Like most real estate companies, it has fared quite well as of late, posting profits well above 50%. It has also consistently bought in strong revenue. In Q3, its revenue was just under $82 million.
Highest Paying Dividend Stocks No. 1 Mobile TeleSystems
Dividend yield: 13.05%
Mobile TeleSystems is the odd man out as the only non-real estate company on this list of the highest paying dividend stocks. In fact, the telecom company is a Moscow, Russia-based mobile operator, and happens to be Russia’s largest. Despite being a very different business in a very different environment, this is also the highest-paying dividend stock on this list. In addition to mobile connectivity, it provides broadband services, TV, digital services, and even financial services.
Unlike the REITs on this list, dividends for MBT shares are more irregular. It typically pays dividends two to three times per year, and the amount of the dividend is different each time. Nevertheless, shares of MBT sell for less than $10 at the moment, and each of its dividend payouts is usually in the range of 20 to 75 cents per share. The company consistently posts a profit; each of the last four quarters, it had profits in the low double digits.
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.