Buying These 2 Ultra-High-Yield Dividend Stocks On the Dip Is a No-Brainer
When stock prices drop, dividend yields rise, and that means gobbling up shares of dented dividend-paying stocks can be an incredibly lucrative step to take for your portfolio. In fact, if you can score a few shares of companies with ultra-high yields above 11%, there's a chance you'll be able to lock in potentially perpetual yearly gains that are above the market's long-term average annual growth of around 10%.
To accomplish that, you'd need to pick the right stock, as many businesses with high dividend yields have serious problems or similarly compelling reasons for why they probably won't be able to keep paying their dividends out consistently over time. Real estate investment trusts (REITs) tend to be the most favorable, as their cash flows typically stem from collecting debt payments from rents or mortgages, which are toward the top of their customers' list of priorities to keep paying no matter what. Let's examine a pair of recently bruised REITs with ultra-high-yielding dividends so that you'll have a couple of ideas about what might be worth buying on the dip.
AFC Gamma (NASDAQ: AFCG) is a REIT that loans money to both public and private cannabis businesses in exchange for holding their property as collateral. That's a sweet deal, as it means any borrowers in default will cede their real estate to the company, which it can then sell to break even on the outstanding balance. And with $483.2 million committed to loans and a weighted average yield to maturity of around 18% for its portfolio, the company pays a dividend that has a monster forward yield of over 12.3%. Of course, that's partially due to its shares declining 14.6% this year so far due to a combination of market turmoil and potentially wide-ranging cannabis banking reform legislation working its way through Congress.
Source Fool.com
