Despite what some across Wall Street say, if the July consumer price index numbers come in red-hot like they did for June, you can bet on the Federal Reserve raising interest rates another 75 basis points in September. In addition, if other data points that the Fed uses to gauge inflation also move higher, there is an outside chance for the dreaded full percentage point increase to become a reality.
Despite those increases, on a historical basis, rates across the Treasury curve are still reasonably low. The 30-year benchmark Treasury bond yields a paltry 3.06%. With inflation well above that number, and factoring in any taxes, that is likely a negative return for investors.
Income investors with a degree of risk tolerance are not buying long-dated Treasury debt, but they do look for stocks of companies that pay massive dividends. Three sectors provide that opportunity: shipping, business development companies (BDCs) and mortgage real estate investment trusts (REITs). We screened our 24/7 Wall St. research database and found seven stocks that are Buy rated across Wall Street that come with 11% and higher dividends.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
AFC Gamma
This off-theadar idea offers outstanding total return potential. AFC Gamma Inc. (NASDAQ: AFCG) originates, structures, underwrites and invests in senior secured loans and other types of loans and debt securities for established companies operating in the cannabis industry in states that have legalized medicinal or recreational adult-use cannabis.
The company primarily originates loans structured as senior loans secured by real estate, equipment and licenses or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties. AFC Gamma has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986.
The company’s stellar first-quarter results and topped both top and bottom line expectations. Revenues of $18.64 million for the quarter ended March 2022 surpassed the consensus estimate by more than 8%. The company has beaten consensus revenue estimates three times over the past four quarters. Second-quarter results are due Tuesday.
Investors receive a 12.71% distribution. JMP Securities has a $25 price target, while the consensus target is $23.15. The shares closed Friday trading at $18.05 a share.
AGNC Investment
This company has paid solid dividends for years. AGNC Investment Corp. (NASDAQ: AGNC) operates as a REIT in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by U.S. government-sponsored enterprises or agencies.
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