High-yielding dividend stocks offering returns of up to 14% with monthly payouts - an essential pick for income-focused investors?
For income-oriented investors seeking high dividend yields and monthly payments, three companies stand out: EPR Properties, Ellington Financial, and AGNC Investment. However, each comes with its own set of risks and performance histories.
EPR Properties: Stability with a Twist
EPR Properties, a U.S.-based specialty REIT, specializes in experiential properties such as movie theaters, waterparks, and other leisure destinations. It currently pays a monthly dividend of about $0.295 per share, yielding a forward yield around 6.6-6.7%. The company has a history of dividend growth, with four increases in the last five years, and has outperformed the S&P 500 over the past five years, indicating a strong post-pandemic recovery.
However, EPR Properties' payout ratio is notably high. One source reports about 72% of earnings paid out, while another shows an unusually high ratio of 158%. This might suggest reliance on external income or asset sales to maintain dividends, which could be a risk factor for sustainability.
Ellington Financial: High Yields and Diversified Portfolio
Ellington Financial focuses on mortgage-backed securities and related credit assets, offering a very high dividend of 12.4% with a 5-year expected total return of about 11.5%. It manages a diverse portfolio including prime jumbo and government-guaranteed RMBS, and it reported strong gross interest income growth recently.
Ellington Financial's income is more variable and linked to market interest rates and credit risk. As a mortgage REIT, it faces risks from interest rate fluctuations and credit defaults, but currently appears well-positioned with stable yields and strategic investments.
AGNC Investment: High Yields with Volatility
AGNC Investment Corp., another mortgage REIT, provides monthly dividends, similarly affected by interest rate trends and credit market dynamics. While less detailed data was found, AGNC is typically known for high-yield dividends but with more volatile income streams and exposure to residential mortgage-backed securities risks.
Comparing the Three
| Company | Dividend Yield | Dividend Frequency | Key Risks | Performance Highlights | |--------------------|----------------|--------------------|-------------------------------------------|------------------------------------------------------| | EPR Properties | ~6.6-6.7% | Monthly | High payout ratio; REIT sector risk | Dividend growth; post-pandemic recovery; stable income | | Ellington Financial | 12.4% | Monthly | Interest rate and credit risk; mortgage-backed securities | Strong income growth; diversified portfolio | | AGNC Investment | High (12% range typical) | Monthly | Interest rate sensitivity; mortgage credit risk | Known stable dividend payer; income variation risk |
In conclusion, these three are reliable in terms of high monthly dividends, but their risks differ:
- EPR Properties offers more stability and has shown consistent dividend growth but watch its payout ratio.
- Ellington Financial and AGNC provide higher yields linked to mortgage credit markets, which can be volatile with interest rate changes.
For income-oriented investors prioritizing high dividend yields and monthly payments, all three highlight strong income potential but require risk tolerance to sector-specific and interest rate risks. Investors should conduct further due diligence on each, especially regarding their balance sheets, payout sustainability, and current market conditions affecting REITs and mortgage securities.
It's worth noting that EPR Properties has lost 75% of its value during the coronavirus crisis and has not yet fully recovered. On the other hand, AGNC Investment is currently around 50% behind on the stock price since its IPO. Despite the decline in AGNC Investment's stock price, investors are still significantly in the black based on total returns (including the dividend). High interest rates have weighed on EPR Properties since the pandemic.
Neither Ellington Financial nor AGNC Investment is specified in terms of the industry or type of business they operate, but both achieve high payouts through leveraged investments in secured mortgage loans.
[1]: Source for EPR Properties data: Yahoo Finance, Bloomberg, and EPR Properties' official website. [2]: Source for Ellington Financial and AGNC Investment data: Yahoo Finance, Bloomberg, and the companies' official websites. [3]: Additional data and insights from Morningstar, The Wall Street Journal, and Forbes.
- In the realm of personal-finance and investing, EPR Properties, Ellington Financial, and AGNC Investment are three companies that offer high dividend yields and monthly payments for income-oriented investors.
- While EPR Properties offers stability with a relatively high payout ratio, Ellington Financial and AGNC Investment provide higher yields, with the former focusing on mortgage-backed securities and the latter on residential mortgage-backed securities, both linked to interest rate and credit risks.
