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Investors are gearing up for a potential rate cut in September and assessing the opportunities available available in the market to funnel their capital. Dividend stocks are set to be back in motion as history suggests they’ve an inclination to perform well when the Fed starts a rate-cut cycle. In response to a report from Raymond James earlier this yr, stocks often face “tough” times when rate of interest cuts begin because the Fed only starts cutting rates when the economy is under pressure. Nonetheless, the firm said dividend stocks have historically provided “downside risk mitigation” on this environment.
Tons of of dividend investors often share their suggestions and secrets on earning a stable income in dividend-related communities on Reddit. About five months ago, someone ran a poll on r/Dividends asking people to share their monthly dividend income.
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While many high-profile portfolios earn 1000’s of dollars a month, for this text, we picked a portfolio that makes a modest $550 a month since we’re specializing in dividend investing strategies for beginner investors. The Redditor sharing this portfolio said he’s making this income on a $60,000 investment.
A lot of the stocks throughout the portfolio are high-yield, dangerous REITs and business development firms.
The ETFs and stocks mentioned throughout the article are purely for informational purposes and are based on an income report/comment shared by an investor on Reddit. These are often not recommendations or investing advice.
Energy Transfer LP
Energy Transfer LP Unit (NYSE:ET) is an energy dividend stock with an almost 8% yield. The company is less exposed to volatile commodity prices than its rivals since most of its revenue comes from fee-based contracts. Earlier this month, Energy Transfer LP Unit (NYSE:ET) increased its full-year profit outlook after posting strong volumes for the second quarter.
Icahn Enterprises LP
Billionaire Carl Icahn’s Icahn Enterprises LP Common Stock (NASDAQ:IEP) yields over 23%, nevertheless it’s not the safest dividend stock in the marketplace. The company recently posted second-quarter results, in response to which the conglomerate’s loss came in higher than Wall Street estimates, and revenue also missed expectations. The stock is down about 12% up to now this yr.
Altria Group
Altria Group (NYSE:MO) has a 7.6% dividend yield and about 54 years of consistent dividend growth history. It’s a number of the popular high-yield dividend stocks amongst income investors on Reddit. While the tobacco industry’s troubles amid declining use of traditional tobacco products have made Altria Group (NYSE:MO) investors uneasy, they’re hopeful in regards to the company’s transition toward e-vapors and nicotine pouches.
Annaly Capital Management
Latest York-based mortgage REIT Annaly Capital Management, Inc. (NYSE:NLY) is one other high-yield dividend stock throughout the Redditor portfolio. The stock yields about 12% and pays $550 per 30 days in dividend income.
Blackstone Mortgage Trust
Blackstone Mortgage Trust Inc. (NYSE:BXMT) has a dividend yield of about 9% even after a 24% dividend cut announced last month, mainly on account of office loan performance problems. Nonetheless, the company also announced plans to buy back as much as $150 million of its class An ordinary stock.
FS KKR Capital
FS KKR Capital Corp (NYSE:FSK) is a business development company with a dividend yield of about 13%. The company’s second-quarter results showed signs of improving asset quality. It has an investment portfolio of $1.4 billion, mainly focused on senior secured debt.
Easterly Government Properties
Easterly Government Properties Inc. (NYSE:DEA) is a Washington-based REIT that lends properties to the U.S. government. Over 90% of the company’s rental income comes from government leases, which makes its business model protected since government-backed leases are considered trustworthy and long-term. The stock has a dividend yield of about 7.8%.
Rithm Capital
Rithm Capital Corp (NYSE:RITM) is an actual estate credit services company. The company manages a portfolio of mortgage-related investments, specializing in mortgage servicing rights (MSRs). As of the highest of the June quarter, MSRs were the most important asset on Rithm Capital’s balance sheet, valued at $9.7 billion.
JPMorgan Nasdaq Equity Premium Income ETF
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is a high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq firms and generates extra income by selling call options. Its dividend yield is about 9%.
Hercules Capital
Hercules Capital Inc. (NYSE:HTGC) is one other high-yield BDC dividend stock throughout the portfolio generating $550 per 30 days. Jefferies recently increased the stock’s price goal to $25 from $23, reiterating its Buy rating following second-quarter results. Hercules Capital Inc. (NYSE:HTGC) has greater than a decade of consistent dividend growth. Since 2019, the company has paid 16 special dividends.
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Arbor Realty Trust
Arbor Realty Trust Inc. (NYSE:ABR) is a mortgage REIT with a 13% dividend yield. Earlier this month Arbor Realty posted second-quarter results. Distributable EPS throughout the quarter totaled $0.45, beating Wall Street estimates of $0.42. Net interest income was $88 million, missing the market’s estimate of $97 million.
Blue Owl Capital
Blue Owl Capital Corp. (NYSE:OBDC) is a business development company. It recently announced strong Q2 results and revealed plans to merge with Blue Owl Capital Corp. III (NYSE:OBDE). Analysts imagine that after the merger, OBDC will grow to be the second-largest publicly traded business development company after Ares Capital. Since Blue Owl Capital Corp. (NYSE:OBDC) lends at floating rates and borrows at fixed rates, the upcoming rate cut may thoroughly be a headwind. Nonetheless, the company’s merger with OBDE could increase deal volumes, potentially offsetting rate-related troubles.
Ares Capital Corporation
One other business development company throughout the dividend portfolio generating $550 a month, Ares Capital Corporation (NASDAQ:ARCC), has a yield of about 9%. The stock has seen about 10% gain in value over the past 12 months. Through the second quarter, each the core EPS and net investment income rose yr over yr while the company funded a net $1.77 billion in recent investments.
This text Redditor Who Earns $550 a Month in Dividends Shares His Top 13 Stocks and ETFs originally appeared on Benzinga.com