High yield dividend actions can be a powerful way to generate a stable income – and a few offer payments that crush the market average.
The Jefferies and BTIG investment companies have recently stressed two of these names that stand out. Both offer dividend yields approaching 10% – approximately seven times higher than the average S&P 500.
However, diving in high -performance actions requires additional diligence. Although they can offer attractive income, they can also include increased risks, such as potential dividend cuts or underlying commercial challenges.
This is why we turned to the Tipranks database to see if the rest of Wall Street supports these choices. Here is what we found.
Blue Owl Capital Corporation (OBDC)
We start with a BDC – Abbreviation of Business Development Company. These companies intervene where traditional banks will not often, offering capital and credit to growing businesses that feed the American economy. Blue OWL Capital Corporation (OBDC) is a key player here, providing financing and credit services to business types that have long served as an economic engine in the country.
OBDC is managed by Blue Owl Credit Advisors, a branch of Blue Owl Capital Inc., and it specializes in the financing of companies on the intermediate market. The company adopts a debt approach, with a selective eye to equity, creating a portfolio which now extends 236 companies with a fair value of $ 17.7 billion. The average investment size is $ 75 million.
By looking at the exercises, we see that the company’s portfolio is mainly made up of first -class guaranteed loans, at around 76% of the total. Common equity represents ~ 12% and secure loans for second superiors represent approximately 5%. On the total portfolio, 96.5% of assets are a floating rate and the others are fixed. OBDC is investing in a wide range of commercial sectors, and more than half of its investments are in the southern and western regions of the United States.
Financially, the company declared an adjusted net investment income of $ 0.39 per share in the first quarter of 2025. This was lower than the expectations of 4 cents forecasts.
The regular dividend was declared at 37 cents per share and was accompanied by an additional payment of 1 hundred per share. The regular dividend cancels at $ 1.48 per share and gives a term yield of 10.7%.
Jefferies analyst Matthew Hurwit covers this BDC, and he is impressed by the potential of the company to provide yields.
“We consider the OBDC as a convincing investment on income with a total basis of the basic case fired by a two -digit dividend yield and a modest growth in navigation / sharing navigation. The portfolio (83% guaranteed seniors’ loans) and low non-accurers should help to mitigate losses.
Hurwit obtains a purchase note on OBDC shares, and its price target of $ 16 implies an increase of one year of 15%. Adding the regular yield of dividends, and the total one -year yield of this stock can reach 25.7%.
Overall, the OBDC has a strong note of purchase consensus for street analysts, on the basis of 8 recent journals which include 6 purchases and 2 holds. Actions are at a price of $ 13.89 and their average price target of $ 15.72 implies an increase in 13%. (See Forecast of OBDC actions))
Apollo Commercial Real Estate (ARI)
The next step is a FPI or a real estate investment trust. These companies are well known as dividend fields; Dividend payments make a practical vehicle for compliance with tax regulations in order to return the profits directly to shareholders. Apollo Commercial Real Estate operates in the United States and Europe, where it comes both and invests in debt investments linked to commercial real estate, including mortgage loans and mezzanine loans. The company’s portfolio is guaranteed by properties and, from March 31, it cost a cuff of $ 7.7 billion.
Apollo Commercial Real Estate is managed outside by an indirect subsidiary of the Alternative Investment Manager, Apollo Global Management. The largest world asset manager has invested more than $ 105 billion in commercial real estate since 2009, and $ 26 billion in this total have been invested on behalf of Apollo Commercial Real Estate. Apollo Commercial Real Estate uses its relationship with the largest asset manager to carry out advantages in its activities, in supply, assessment, subscription and management of its investments in commercial real estate.
The Apollo Commercial Real Estate portfolio contains 48 loans, mainly floating and mortgage loans. The remaining average duration of weighted loans is 2.4 years. The portfolio is diversified, with 24% in offices, an additional 24% in residential properties and 21% in hotels. Moreover, 12% is in retail properties. Geographically, 32% of the portfolio is in the United Kingdom and 20% is in New York. The next geographic segments of the portfolio are Europe, 17%, and the American Southeast, at 11%.
On the financial side, Apollo Commercial Real Estate reported the results for the last time for 1T25. During this quarter, the company carried out a net income attributable to ordinary shareholders of 16 cents per share. The distributable profit of the company by diluted action came to 24 cents. On April 15, the company paid an ordinary action dividend of 25 cents; The annualized rate of $ 1 per ordinary share gives a term return of 10.4%.
This stock attracted the attention of BTIG analyst, Tom Catherwood, who notes that the company is agile and capable of moving its portfolio position to fulfill changing conditions.
“Although we have been positive on the Ari platform for some time, we fear that large-scale loans (namely Steinway Tower and a Hospitals of MA) can demand that the company retain additional capital, limiting its ability to manage regularly and increase its loan book. Mezz Loan on the property at 2T25.
Catherwood comments support its purchase note on ARI shares, while its price target of $ 11 suggests that ARI will earn 14.70% in the future. With dividend yield, the total yield of this action can reach 16%. (To watch the history of Catherwood, click here)
It’s a street side. The wider analyst consensus adopts a more prudent position, landing pending (that is to say neutral). Out of 6 recent notes, there are 2 purchases, 3 sockets and 1 sale. The shares negotiating at $ 9.59 and an average price target of $ 9.80, which indicates a more silent increase of 2% compared to next year. (See ARI stock forecasts))
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Warning: The opinions expressed in this article are only those of the featured analysts. Content is intended to be used for information only. It is very important to do your own analysis before investing.
