3 Financial Stocks to Buy That Pay You 10% to 17% a Year in Dividends

详细摘要

Ares is expanding its scale by acquiring fellow BDC MidCap Financial in a $2.6 billion transaction. The purchase will boost its portfolio to $31 billion across over 800 portfolio…

The financial sector is offering some eye-popping yields these days due to the recent surge in interest rates. That has pushed down the value of many financial stocks, driving up their dividend yields. Ares Capital (NASDAQ:ARCC), AGNC Investment (NASDAQ:AGNC), and Ladder Capital (NYSE:LADR) currently offer yields between 10% and 17%. While they are certainly higher-risk, higher-yielding dividend stocks, they're intriguing options for investors seeking to supercharge their passive income.

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Ares Capital is a business development company (BDC). It makes direct loans and other investments in private middle-market companies (those with up to $1 billion in annual revenue). Ares is the largest BDC, with over $29 billion invested in more than 600 portfolio companies.

The company has an exceptional track record of underwriting loans. That's evident in its 17-year history of paying a stable-to-increasing dividend. Ares Capital's current portfolio is very healthy, with historically low levels of non-accruing loans and problem assets. That puts its high-yielding payout on a sustainable foundation. While its core earnings per share have fallen below its dividend level in recent quarters, Ares has generated significant additional income from investment gains, providing a sizable cushion.

Ares is expanding its scale by acquiring fellow BDC MidCap Financial in a $2.6 billion transaction. The purchase will boost its portfolio to $31 billion across over 800 portfolio companies. It should also increase its earnings per share, thereby enhancing its ability to pay dividends.

Ladder Capital is a real estate investment trust (REIT) focused on commercial mortgages. It currently yields 10.8%.

The company's portfolio generates interest and rental…

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