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Dividend investing has taken a back seat since the AI craze caused everyone to pile into tech growth stocks. However, long-term investors looking for a steady, reliable income stream always look for strong dividend payers that can survive market volatility. A few days ago, a Redditor posted a detailed income report on r/Dividends, a community with over 580,000 members, saying he makes $110,000 a year in dividends on an investment of around $1.2 million.
Check it out:
The Redditor said that part of his portfolio is allocated to money market funds and fixed income.
“About half of that is in money market/fixed income and yields 5%. All together it yields $110k per year. I’m just sharing it for feedback and comments. The plan is to convert the fixed income into dividend stocks when rates come down so that the income stays the same or increases,” he said.
When asked how he saved up $1.2 million to invest, the Redditor replied that he worked for 20 years and his wife worked for 15 years.
“We both have a 401k retirement fund, in addition to this after-tax account, which we plan to leave alone for now,” he added.
The investor generously shared his detailed portfolio. Let’s take a look at some of the key stocks and funds within it.
Schwab Value Advantage Money Fund (SWVXX)
The largest investment in the Redditor’s portfolio, which brings in around $110,000 per year, is the money market fund Schwab Value Advantage Money Fund (SWVXX). The fund is suitable for those looking for a stable, safe place to park their money. It has total assets of around $204 billion and a yield of around 5.13%.
Blackrock Multi-Sector Income Confidence
Blackrock Multi-Sector Income Trust (NYSE:BIT) yields approximately 9.8% and invests in loans and debt instruments. The fund aims to generate income and capital growth. Some of its key holdings include FEDERAL NATIONAL MORTGAGE ASSOCIATION, UNIFORM MBS, TRANSDIGM INC., CLOUD SOFTWARE GROUP INC. and HUB INTERNATIONAL LTD.
AGNC Investment Company
AGNC Investment Corp (NASDAQ:AGNC) is a mortgage REIT with a dividend yield of approximately 13%. The company pays monthly dividends. AGNC invests in safe agency mortgage-backed securities, as Fannie Mae or Freddie Mac guarantees the MBS principal in the event of default.
Icahn Enterprises LP
Billionaire Carl Icahn’s conglomerate, Icahn Enterprises LP (NASDAQ:IEP), is one of the stocks in the Redditor’s portfolio. IEP has a yield of 30%, but its sustainability and safety have been questioned for some time.
In August, Icahn settled charges with the SEC related to personal margin lending. Last year, IEP cut its dividend by 50% and now pays about $1 per share.
Horizon Technology Finance Horizon Technology Finance Corp (NASDAQ:HRZN) is a business development company that lends money to technology, life sciences, healthcare, and information services companies. HRZN pays monthly dividends and yields approximately 12%.
Stellus Capital Investments Corp.
Stellus Capital Investment Corp (NYSE:SCM) is another business development company on the list. It pays monthly dividends and has a yield of about 12%. Stellus generates income through its portfolio of debt investments in middle market companies. The stock is up about 6.5% this year.
Real estate income
Realty Income Corp (NYSE:O) has become a no-brainer dividend stock in Redditors’ portfolios, generating a decent monthly income. The company pays a monthly dividend and has increased its payouts for 29 years. The last monthly dividend increase came earlier this month when Realty Income raised its dividend by 0.2%.
Cornerstone Strategic Value Fund
Cornerstone Strategic Value Fund Inc. (NYSEAMERICAN: CLM) is a closed-end fund that generates income by investing in publicly traded companies. The fund yields approximately 17% and pays a monthly dividend.
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Global X Nasdaq 100 Covered Call ETF
Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) generates income by selling covered call options on the Nasdaq-100 Index. The fund was launched in 2013 and has been paying monthly income to investors since then. The fund yields approximately 11.5%. Some of the ETF’s largest holdings include Apple, Nvidia, Microsoft, Amazon and Broadcom.
Energy transfer
With a dividend yield of around 8%, Energy Transfer LP (NYSE:ET) is a popular dividend stock on Reddit. The company is relatively insulated from the volatile commodities market, as the majority of its revenue comes from fee-based contracts. Last month, Energy Transfer LP (NYSE:ET) raised its full-year earnings outlook after posting strong second-quarter volumes.
MPLX
Midstream energy infrastructure company MPLX LP (NYSE:MPLX) is one of the high-yielding dividend stocks in the Redditor’s portfolio. The company has a dividend yield of around 8% and is owned by Marathon Petroleum. During the second quarter, MPLX’s revenue rose around 13% year-over-year, beating Wall Street estimates.
Ares Capital
Ares Capital Corporation (NASDAQ:ARCC) is one of the notable business development companies in the Redditor’s portfolio, earning $110,000 in dividends. The stock has a dividend yield of around 9.4%. During the second quarter earnings call, Ares Capital management said that the company had converted its $850 million of issued debt to a floating rate. Analysts believe that the move would help position the company well for the coming rate cut cycle, as its interest expense will decrease with the expected accommodativeness of monetary policy.
Interest rates are falling, but these yields aren’t going anywhere
Lower interest rates mean that some investments will no longer yield what they did in previous months, but you don’t have to give up those gains. Certain private market real estate investments offer retail investors the opportunity to take advantage of these high-yield opportunities, and Benzinga has identified some of the most compelling options for you to consider.
Arrived Homes, the Jeff Bezos-backed investment platform, offers a Private credit fund. This fund provides access to a pool of short-term loans backed by residential real estate with a target of 7% to 9% net annual yield paid monthly to investors. The best part? Unlike other private credit funds, this fund has a minimum investment of just $100.
Don’t miss this opportunity to profit from high yield investing while rates are high. Check out Benzinga’s favorite high yield offerings.
This article Dividend Investor Makes $110,000 From Stocks in His Portfolio: Top 12 Stocks and ETFs You Might Be Missing originally appeared on Benzinga.com
