What are the highest dividend-paying stocks in 2023? In today’s fast-paced financial world, investors constantly seek opportunities to grow their wealth and secure their financial future. While the stock market offers many investment options, one strategy that has long stood the test of time is investing in dividend stocks.
Dividend stocks provide the potential for capital appreciation and offer a consistent stream of passive income.
However, not all dividend stocks are a wise investment as they do not always grow over time. Below, we will look at the top dividend-paying stocks in the US and the S&P 500.
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Highest Dividend Paying Stocks in the US
Most companies on the highest dividend-paying stocks list are on very few people’s radars. Their market cap is under $1B in most cases, and their trading volume isn’t very high.
However, they can still be very profitable since their dividend yields are above the average. Many of these companies work in the same sector: finance. Here are the highest dividend-paying stocks in the US.
1. Oxford Lane Capital Corp (NASDAQ: OXLC)
We begin our highest dividend-paying stocks list with Oxford Lane Capital Corp, a closed-end management investment company known as a business development company (BDC). It primarily focuses on investing in collateralized loan obligation (CLO) securities, a structured financial product.
CLOs comprise a diverse pool of corporate loans typically issued by special-purpose vehicles. Oxford Lane Capital Corp. is designed to expose investors to income-generating investments, particularly in interest and dividend income.
BDCs are subject to regulations under the Investment Company Act 1940 and have certain tax advantages. To maintain their favorable tax status, BDCs must distribute at least 90% of their taxable income to shareholders as dividends. Oxford Lane Capital’s dividend yield has been steady but has decreased with time, similar to its stock price.
Market cap: $998M
Dividend yield: 19.28% ($0.08 monthly)
2. Diana Shipping Inc (NYSE: DSX)
Diana Shipping Inc. is a global shipping company specializing in transporting dry bulk cargo. The company primarily operates a fleet of dry bulk vessels.
They are designed to carry a variety of commodities, including iron ore, coal, grain, bauxite, and other bulk materials. Diana Shipping provides shipping services to customers, including major trading companies, charterers, and industrial end-users.
DSX’s stock price has decreased since inception but has been relatively constant in the last decade. Why is $DSX a part of the highest dividend-paying stocks list? Its dividend yield used to be higher but has decreased with time.
Market cap: $340M
Dividend yield: 18.75% ($0.15 quarterly)
3. Eagle Point Credit Co. (NYSE: ECC)
Eagle Point Credit Company operates a very similar business to Oxford Lane Capital Corp. Both provide income to their shareholders typically generated from the interest and principal payments on the securities held in their portfolios and from capital gains realized from trading and investments.
The company’s stock has seen a lot of ups and downs, but its dividend distribution has always been very generous. We’d be remiss not to include it as one of the highest dividend-paying stocks.
Market cap: $609M
Dividend yield: 18.97% ($0.14 + $0.02 monthly with occasional additional dividends)
4. TriplePoint Venture Growth (NYSE: TPVG)
TriplePoint Venture Growth BDC Corp is a BDC that specializes in providing financing and growth capital to venture-stage small to mid-size firms and emerging growth companies.
BDCs like TriplePoint Venture Growth focus on supporting small and medium-sized businesses by offering various debt and equity investments to help these companies grow and expand. The company generates income by investing in these companies, earning interest on loans, or taking equity stakes.
It’s one of the most consistent companies regarding stock price and dividend distributions, which have continuously increased with time. Hence, they’re on our highest dividend-paying stocks list.
Market cap: $342M
Dividend yield: 16.58% ($0.40 quarterly)
5. MFA Financial Inc. (NYSE: MFA)
MFA Financial Inc. is a real estate investment trust (REIT) primarily investing in residential and commercial mortgage-backed securities (MBS). The company’s primary objective is to generate income through investments in a diversified portfolio of mortgage-related assets.
As with many REITs and MBS, their performance is influenced by various factors, including interest rates, credit quality of the underlying mortgages, and economic conditions. These factors can impact MFA’s profitability and its ability to pay dividends.
These economic conditions have greatly affected MFA’s stock price, causing many volatile periods during economic uncertainty. However, they’re still one of the highest dividend-paying stocks.
Market cap: $163M
Dividend yield: 15.05% ($0.35 quarterly but was often in the $0.20-$0.30 range)
6. Portman Ridge Finance Corp. (NASDAQ: PTMN)
Portman Ridge Finance is also a BDC that focuses on providing debt and equity capital to middle-market companies in the US. The company is designed to support small and medium-sized businesses by offering financing solutions that help them grow and expand.
It’s one of the least valuable companies on the highest dividend-paying stocks list, and its stock hasn’t performed well. However, since 2021, its dividend has been much more than respectable.
Market cap: $947M
Dividend yield: 16.09% ($0.69 quarterly, up from $0.10-$0.30 before 2021)
7. OUTFRONT Media Inc. (NYSE: OUT)
OUTFRONT Media Inc stands out from the group. It is a leading outdoor media company specializing in advertising space on billboards, transit systems, and other out-of-home advertising displays. Why should it be one of the highest dividend paying stocks?
The company is involved in the marketing and leasing advertising space to a wide range of advertisers, helping them reach their target audiences in high-traffic locations. OUTFRONT has more than 17,000 partners and over 10,000 billboards displayed across the US.
Market cap: $1.62B
Dividend yield: 13.21% ($0.30 quarterly)
8. Dorian LPG Ltd. (NYSE: LPG)
Lastly, one of the highest dividend paying stocks that isn’t part of the S&P 500 but has huge potential. Dorian LPG is an international shipping company primarily transporting liquefied petroleum gas (LPG). The company owns and operates a fleet of very large gas carriers. They are specialized vessels that carry large quantities of LPG, propane, and butane.
Unlike the other companies on the list, Dorian’s stock is at its all-time high and has grown by almost 92% YTD and 330% in the last five years. There might be more room to grow, which is worth adding to your watchlist.
Market cap: $1.40B
Dividend yield: 20.87% ($1 quarterly since it began dividend payouts in 2021)
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Highest Dividend Paying Stocks in the S&P 500
The companies listed below are not only the highest dividend paying stocks compared to their peers, but some are also part of an elite dividend list.
Many companies below are either dividend aristocrats (annual dividends raised for 25 consecutive years) or dividend kings (same, but 50 years). They are well-established companies with strong financial stability and industry leaders. If you love dividends, add them to your watchlist right now.
1. Altria Group Inc (NYSE: MO)
Altria is a well-known American multinational corporation in the tobacco and related products sector. It is one of the world’s largest producers and marketers of tobacco products, and it has a significant presence in the United States. It is also involved in cannabis through Canada’s Cronos Group (TSE: CRON).
Altria has increased its dividend yearly since 2008 (\$0.29) and has performed very well on the stock market, making it one of the highest dividend paying stocks.
Market cap: $70.57B
Dividend yield: 9.82% ($0.94 quarterly, expect an increase in 2024)
2. Verizon Communications (NYSE: VZ)
Verizon is one of the largest telecommunications companies in the United States and a major player in the global industry. The company provides telecommunications and information services, including wireless and wireline voice and data, internet, and video services.
Verizon has ventured into the media and entertainment industry through acquisitions like AOL and Yahoo. Verizon Media, including Yahoo, HuffPost, and TechCrunch, was created. It is also at the forefront of the deployment of 5G technology in the United States.
Verizon has increased its dividend yearly since 1998 (\$0.385) and has performed very well on the stock market. As a result, it’s one of the highest dividend paying stocks.
Market cap: $149B
Dividend yield: 7.51% ($0.665 quarterly)
3. Walgreens Boots Alliance (NASDAQ: WBA)
Walgreens is a multinational retail pharmacy and healthcare company with a significant presence in the United States and six other countries (UK, Thailand, Ireland, Mexico, Chile, and Germany).
The company operates a broad network of retail pharmacies, providing various healthcare and retail products and services to consumers and businesses. Walgreens is involved in the administration of vaccines and immunizations.
In the last eight years, the company’s stock price has suffered greatly but hasn’t stopped it from increasing its dividend yearly since 2000 (\$0.0337), resulting in one of the highest dividend-paying stocks.
Market cap: $17.82B
Dividend yield: 9.31% ($0.48 quarterly)
4. KeyCorp (NYSE: KEY)
KeyCorp does not sell keys. It is a bank holding company and financial services organization. KeyCorp is a regional bank focusing on retail, commercial, and wealth management services. It has expanded its reach through mergers and acquisitions, acquiring other financial institutions to grow its operations and enhance its presence in various markets.
The stock suffered greatly after the 2008 financial crash, and its dividend went from $0.375 to $0.01. It has performed better since and has always increased its dividend.
Market cap: $9.50B
Dividend yield: 8.08% ($0.205 quarterly)
5. AT&T Inc (NYSE: T)
Last on the list is AT&T, one of Verizon’s biggest competitors in the US. It operates in virtually the same market. If you’ve seen their ads on TV, you know they are in the mix for the most trusted network in the US. Its dividend hasn’t always increased, but there were several additional distributions throughout the years.
Market cap: $111.40B
Dividend yield: 7.12% ($0.2775 quarterly)
Final Thoughts: Highest Dividend Paying Stocks
To conclude, today’s list contained two classes of dividend stocks. The first paid dividends are over 13% but haven’t had the best stock market performance or consistency in dividend distributions.
S&P500 companies make up the second list. Some are even part of the prestigious dividend aristocrats or dividend kings list. Both lists can be attractive for different types of investors, but neither is a must-purchase stock. It would be best to consider them depending on your trading style, goals, and risk tolerance.
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