Nobody is happier than senior citizens that bank rates have shot up and they can safely get as much as 4.5% and higher on insured bank money markets. Add in that some banks and other financial institutions are offering certificates of deposit that yield well over 5%, and the older crowd is partying like it’s 1999. However, for more aggressive investors looking for a big dividend yield, bank money markets and CDs are likely not where they want to be.
We decided to look at the quality master limited partnerships (MLPs), mortgage and regular real estate investment trusts (REITs), business development companies (BDCs) and shipping leaders for growth ideas with a big passive income dividend. In a rising rate environment, these can be tricky to buy and own, but with the federal funds rate likely close to the top end of the range, and the possibility that rates could be lowered next year, it makes sense for aggressive growth and income investors to consider these ideas.
We screened our 24/7 Wall St. high income and growth universe looking for top companies that pay big and dependable dividends and distributions. We found six that make sense now, and all pay massive dividends. While all are rated Buy at top firms across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Alliance Resource Partners
This is a leader in the thermal coal business and also offers solid diversity. Alliance Resource Partners L.P. (NASDAQ: ARLP), a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company produces a range of thermal and metallurgical coal with sulfur and heat contents.
It operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania and West Virginia. In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. It buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas producing regions primarily in the Permian, Anadarko and Williston Basins.
Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems and data and analytics software.
Investors receive a 15.03% distribution. Benchmark has a $28 target price on Alliance Resource Partners stock, but the consensus target is higher at $29.33. The closing share price on Tuesday was $18.62.
Annaly Capital Management
This mortgage REIT has been around for years and is a top income idea. Annaly Capital Management Inc. (NYSE: NLY), a diversified capital manager, engages in mortgage finance and corporate middle-market lending.
The company invests in agency mortgage-backed securities, mortgage-servicing rights, agency commercial mortgage-backed securities, non-agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts and other commercial real estate investments. It has elected to be taxed as a REIT.
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