Investors love dividend stocks. They not only provide dependable income, but they also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over a given period. In other words, the total return on an investment or a portfolio includes both income and stock appreciation.
Most companies pay dividends on a quarterly basis, and for many investors that reinvest dividends, that is fine. But many investors rely on dividends as part of an income stream, and it is more beneficial to them to get a monthly payout. Typically, real estate investment trusts (REITs), business development companies and closed-end funds are among the investment vehicles that pay distributions monthly.
We screened our 24/7 Wall St. research database looking for companies that were rated Buy at major Wall Street firms and also paid dividends on a monthly basis. We found seven that look like great ideas for passive-income-oriented investors looking for some upside appreciation as well.
It is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
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.
The company funds its investments primarily through collateralized borrowings structured as repurchase agreements. The company has elected to be taxed as a REIT under the Internal Revenue Code of 1986 and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
AGNC Investment stock investors receive a 12.17% dividend. Keefe Bruyette has a $13.25 price target. That compares with the $18.25 consensus target and last Friday’s closing price of $11.77.
Broadmark Realty
Similar to a mortgage REIT, this top company is an investor in what is known as deed of trust loans. Broadmark Realty Capital Inc. (NYSE: BRMK) engages in the underwriting, funding, servicing and managing a portfolio of short-term and first deed of trust loans to fund the construction, development and investment in residential or commercial properties in the United States.
The company also provides short-term and first deed of trust loans secured by real estate to fund the construction and development and investment in residential or commercial properties. The company has elected to be taxed as a REIT. As a result, it is not subject to corporate income tax on that portion of its net income that is distributed to shareholders.
Investors receive a 13.27% distribution. The Raymond James target price is $11, and the consensus target is just $8.17. Friday’s final trade was reported at $6.23.
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