Investors love dividend stocks, especially those with ultra-high yields, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Let’s examine the concept of total return. If you purchase a stock at $20 that pays a 3% dividend ($0.60 per share) and the price rises to $22 in a year, your total return is ($22 + $0.60 – $20) / $20 = 13%. This combines the price appreciation and the dividend received.
24/7 Wall St. Key Points:
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Rates are likely to stay the same until the fall.
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Ultra-high-yield stocks have been hit as Treasury yields surged higher.
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Some of our favorite names are trading near 52-week lows.
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There are over 12,000 publicly traded stocks in the United States; not even the most intelligent investors with the best tools can find them all immediately. Many investors and traders typically maintain a small list of key stocks they follow when seeking capital gains or high-yield dividends.
We decided to screen our 24/7 Wall St. high-yield database, looking for solid companies with ultra-high-yield stocks with solid dividend coverage that were trading at or close to 52-week lows. Three of our favorite well-run companies are now on our screens, and all look like very timely buys. All three trade under $15 and can be an outstanding buy for investors with $5,000.
Why do we cover ultra-high-yield stocks?
While not suited for everybody, those trying to build strong passive income streams can do exceptionally well with some of these top companies in their portfolios. Paired with more conservative blue-chip dividend giants, investors can employ a barbell approach to generate substantial passive income streams.
Arbor Realty Trust
Arbor Realty Trust (NYSE: ABR) offers nationwide solutions for multifamily finance. This company trades at a ridiculous 7.6 times estimated 2026 earnings and pays a massive dividend. Arbor Realty Trust invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.
The company operates in two segments:
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Structured Business
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Agency Business
Arbor Realty Trust primarily invests in:
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Bridge and mezzanine loans, including junior participating interests in first mortgages
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Preferred and direct equity and real estate-related joint ventures
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Real estate-related notes
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Various mortgage-related securities
The company offers:
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Bridge financing products to borrowers who seek short-term capital to be used in the acquisition of property
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Financing by making preferred equity investments in entities that directly or indirectly own real property
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Mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction
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Junior participation financing in the form of a junior participating interest in the senior debt
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Financing products to borrowers seeking conventional, workforce, and affordable single-family housing.
Furthermore, it underwrites, originates, sells, and services multifamily mortgage loans through conduit and commercial mortgage-backed securities programs.
JMP Securities has a Buy rating with a $16 target price.
Mach Natural Resources
Mach Natural Resources L.P. (NYSE: MNR) is an independent upstream oil and gas company that acquires, develops, and produces oil, natural gas, and NGL.
The company is focused on the acquisition, development, and production of oil, natural gas, and NGL reserves in the Anadarko Basin region, which spans Western Oklahoma, Southern Kansas, and the panhandle of Texas.
Mach Natural Resources assets are located throughout Western Oklahoma, Southern Kansas, and the panhandle of Texas and consist of approximately 5,000 gross operated proved developed producing (PDP) wells.
Additionally, it owns a portfolio of midstream assets that support its leases, including ownership in four processing plants with a combined processing capacity of 353 million cubic feet per day (MMcf/d), as well as 1,480 miles of gas-gathering pipelines. It also owns water infrastructure consisting of 880 miles of gathering pipeline and 88 disposal wells.
Despite missing Wall Street estimates, the company announced a massive $0.79 distribution for the quarter and reaffirmed its earnings outlook for the year. Investors should note that recent dividend distribution is way above recent quarters, and could be lower over the rest of the year and beyond
Stifel has assigned a Buy rating with a target price of $23.
Townsquare Media
This off-the-radar stock boasts huge total return potential, complemented by its substantial dividend. Townsquare Media Inc. (NYSE: TSQ) is a community-focused digital and broadcast media and digital marketing solutions company.
The company’s segments include:
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Subscription Digital Marketing Solutions
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Digital Advertising
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Broadcast Advertising
The Digital Advertising segment, marketed as Townsquare Ignite, encompasses digital advertising on its programmatic advertising platform, as well as its owned and operated digital properties.
The Subscription Digital Marketing Solutions segment includes its subscription digital marketing solutions business, Townsquare Interactive.
The Broadcast Advertising segment includes local, regional, and national advertising products and solutions delivered via terrestrial radio broadcast. Townsquare Interactive partners with small and medium-sized businesses (SMBs) to help manage their digital presence by providing a SAAS business management platform, Website design, creation, and hosting, search engine optimization, and other digital services.
Barrington Research has assigned an Outperform rating, accompanied by a substantial $13 target price.
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The post If You Have $5000, Grab These 3 Ultra-High-Yield Stocks Near 52-Week Lows appeared first on 24/7 Wall St..
