Sashkinw Market fear can be a trying time for some investors, but for enterprising investors, it can represent terrific buying opportunities. This is especially the case for dividend stocks that yield higher than the market average. For example, a 10% drop in price on a stock that’s already yielding results in an 8.8% yield, whereas the same percentage drop on the S&P 500 (SPY) would result in just a 13 basis point jump in yield, due to the current low 1.25% dividend yield of SPY. This brings me to the ...

aluxum While I have written a lot about high-yield investing covering many value plays, I have not elaborated so much on the portfolio construction, my investing objectives, and strategy. So, the goal of this article is to elaborate on 3 specific aspects that characterize my overall investment allocation process, where, hopefully, some of this will seem interesting and beneficial in the context of your investment approach: What are the objectives? What asset classes fulfill these objectives? What is the ke ...

Berkshire Hathaway's Ultra-High-Yield Dividend Stocks - Berkshire Hathaway's portfolio includes stocks with long histories of paying attractive dividends, with all top 12 holdings paying dividends [1] - Warren Buffett owns two ultra-high-yield dividend stocks through Berkshire's subsidiary, New England Asset Management (NEAM), which manages a separate portfolio [2] - NEAM's portfolio includes Ares Capital and Verizon Communications, both of which are ultra-high-yield dividend stocks [3] Ares Capital and Verizon as Income Investments - Ares Capital has a forward dividend yield of 8.9%, while Verizon's forward dividend yield is over 6.4% [4] - Ares Capital has maintained steady-to-growing dividends for 15 years, with the highest regular dividend per share growth among large BDCs over the last 10 years [4] - Verizon has increased its dividend payout for 17 consecutive years, the longest streak in the U.S. telecommunications industry [4] Business Strengths of Ares Capital and Verizon - Ares Capital is the largest player in the U.S. direct lending market, with a highly selective deal closing rate of around 5% [4] - Verizon is a leader in providing wireless and broadband services for businesses and consumers [4] Valuation of Ares Capital and Verizon - Ares Capital's forward price-to-earnings ratio is below 9.2, compared to 15.5 for the S&P 500 financial sector [5] - Verizon's shares trade at a little over 9 times forward earnings, compared to over 19.2 for the S&P 500 communication services sector [5] Risks for Ares Capital and Verizon - Ares Capital faces the risk of loan defaults, which could increase during a major U.S. economic downturn [6] - Verizon operates in a highly competitive telecom market and must invest heavily in new technologies like 5G networks [7]

These cash-generators can boost your passive income.Seeing steadily growing streams of cash deposited into an investment account year after year can make any investor smile. Read on to learn more about two top-tier stocks that can help you earn more dividend income from your portfolio.Brookfield RenewableThe trend toward sustainable power sources is set to provide lucrative opportunities for income-focused investors. Brookfield Renewable (BEPC -3.35%) (BEP -4.24%) is particularly well suited to deliver gain ...

Core Viewpoint - Ares Capital (ARCC) has been gaining attention as a highly searched stock, with its recent performance showing a +2.1% return over the past month, compared to the S&P 500's +3.5% and the Zacks Financial - SBIC & Commercial Industry's +0.5% [1] Earnings Estimates - Ares Capital is expected to report earnings of $0.58 per share for the current quarter, unchanged from the previous year, with a consensus estimate change of +0.2% over the last 30 days [3] - For the current fiscal year, the consensus earnings estimate is $2.34, reflecting a -1.3% change from the prior year, with a +0.1% change in the last 30 days [3] - The next fiscal year's consensus estimate is $2.23, indicating a -4.9% change from the previous year, with a +0.5% change over the past month [3] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $714.27 million, representing a year-over-year increase of +12.7% [5] - For the current fiscal year, the revenue estimate is $2.87 billion, indicating a +10% change, while the next fiscal year's estimate of $2.92 billion shows a +1.7% change [5] Last Reported Results and Surprise History - Ares Capital reported revenues of $701 million in the last quarter, a +13.4% year-over-year increase, with EPS of $0.59 compared to $0.56 a year ago [6] - The reported revenues were slightly below the Zacks Consensus Estimate of $701.4 million, resulting in a surprise of -0.06%, while the EPS surprise was 0% [6] - Over the last four quarters, Ares Capital surpassed consensus EPS estimates three times and revenue estimates two times [6] Valuation - Ares Capital's valuation is assessed through multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), which help determine if the stock is fairly valued, overvalued, or undervalued [7] - The Zacks Value Style Score indicates that Ares Capital is graded D, suggesting it is trading at a premium compared to its peers [9]

Core Insights - Ares Capital (NASDAQ:ARCC) reported a strong quarterly performance with a total NAV return of 4.1%, outperforming the average BDC in coverage [1] - The company offers a 9% dividend yield and a core earnings yield of 10.3%, trading at a 9% premium to book value, consistent with the sector average [1] - The portfolio is primarily allocated in software and healthcare sectors, with a focus on larger companies compared to traditional middle-market BDC borrowers [1] Financial Performance - Core net investment income decreased to $0.59 from $0.64 in the previous quarter [3] - The NAV reached a record high of $19.52, marking the fifth consecutive quarterly increase [6] - The company declared a stable dividend of $0.48, with a coverage ratio of 123% and an estimated spillover of $1.05 per share [5] Investment Dynamics - Fee income saw a significant decline in Q1, typical for the sector, but not as severe as the previous year [4] - The conversion of a $400 million convertible bond to common equity led to a 3.5% increase in shares, impacting net income [5] - New commitments have primarily been in first-lien loans, slightly increasing the first-lien allocation [9] Portfolio Quality - Non-accruals rose slightly to 0.7%, remaining below the sector average, while overall portfolio quality improved [11] - The weighted-average loan-to-value ratio in the portfolio is 43%, indicating a conservative approach [12] - Portfolio companies demonstrated EBITDA growth exceeding that of the S&P 500, with stable interest coverage [12] Valuation and Market Position - Ares Capital continues to generate above-sector total NAV returns, with consistent outperformance [13] - Although the stock appears rich on an absolute basis, it is trading less than 2% above the sector average, indicating a modest relative valuation [15] - The company is highly diversified with 490 companies in its portfolio, significantly above the median of around 130 [16]

SashkinwIt pays to think like a business owner when it comes to investing in stocks. Some entrepreneurs will start a business with the end goal of selling it for a high price, much like investing in growth stocks like NVIDIA (NVDA) today. Most successful entrepreneurs tend to be keenly aware of cash flows and getting paid from the business in return for their efforts, much like investing in value stocks that throw off decent cash flow through dividends. Entrepreneurs/investors who focus on cashflows ten ...

While traders are naturally attracted to high-growth stocks that deliver impressive returns, savvy investors prefer dividend stocks. Growth stocks can be highly rewarding if picked correctly, but they also carry greater risk. Focusing solely on growth means a portfolio may have vulnerabilities if market conditions change unexpectedly. Therefore, buying dividend stocks as part of an overall trading strategy is prudent. It provides more stability and reliable returns on investment.Dividend stocks can perform ...

porcorex Before I begin this article, I would like to clarify that I'm writing it from the perspective of a total return-oriented value investor who focuses on the high-yield sector. As I detailed in a recent article, I believe that it is one of the easiest sectors to consistently win in by pursuing a highly concentrated, actively managed investing strategy. That said, for investors who purely care about generating passive income from quality stocks and do not like to trade much, especially for the sake of ...

Investors should never chase yield. Buying a dividend stock simply because it offers significantly higher-than-average yields will only set you up for problems. That’s because high-yield stocks often have problems. You can see why this is by looking at how yield is calculated.To find a dividend stock’s yield, you divide the amount of dividends per share a company pays by the stock’s price per share. So, if a stock’s price falls the yield rises. And of course, if a stock’s price is falling there could be som ...