3 High-Yield Dividend Stocks Offering Double-Digit Income
In a market where income has become harder to find, dividend investors are feeling the squeeze. The S&P 500 currently offers a yield of roughly 1.1%, hovering near historic lows as rising stock prices and shifting corporate priorities have reduced the emphasis on dividend payouts.
Yet, even in this low-yield landscape, certain companies stand out for delivering exceptionally high income. For investors willing to accept additional risk in exchange for stronger cash flow, the following three dividend stocks offer yields ranging from nearly 9% to as high as 12.5%.
AGNC Investment
AGNC Investment (NASDAQ: AGNC) tops the list with a dividend yield of approximately 12.5%. As a mortgage real estate investment trust (REIT), AGNC distributes its dividend monthly, which can be especially attractive for income-focused investors seeking regular cash flow. The company has held its current payout steady for more than five years, following a reduction during the early stages of the pandemic in 2020.
AGNC invests primarily in agency mortgage-backed securities (MBS) — residential mortgage pools guaranteed by government-sponsored entities such as Fannie Mae. The agency MBS market, valued at roughly $9.2 trillion, plays a critical role in the U.S. financial system. By using leverage to invest in these fixed-income securities, AGNC enhances its potential returns.
The sustainability of its dividend depends on earning returns that exceed its cost of capital, including operating expenses and shareholder distributions. With interest rates trending downward and economic conditions relatively stable, AGNC believes current market dynamics support continued solid returns, helping preserve its high monthly payout.
Ares Capital
Ares Capital (NASDAQ: ARCC) currently offers a dividend yield near 10%. As a business development company (BDC), it provides direct financing to middle-market businesses generating between $100 million and $1 billion in annual revenue. The interest earned on these loans funds its dividend distributions.
The company maintains strong profitability, with core earnings exceeding its dividend obligations. This coverage provides a buffer that could help sustain payouts even if earnings moderate. Notably, Ares Capital has maintained or increased its dividend for more than 16 consecutive years.
Its solid financial footing allows continued portfolio expansion. The firm originated a record volume of new investments last year and reports a robust pipeline heading into 2026. A growing loan portfolio should help underpin its sizeable dividend moving forward.
Western Midstream Partners
Western Midstream Partners (NYSE: WES) delivers a dividend yield of roughly 8.9%. Structured as a master limited partnership (MLP), the company issues investors a Schedule K-1 for tax purposes. It operates midstream energy infrastructure assets, including pipelines and processing facilities. Most of its revenue is supported by long-term, fixed-fee contracts, which provide relatively stable cash flow.
The partnership generates sufficient cash to fund both its distributions and capital expenditures while maintaining balance sheet strength. This financial flexibility supports acquisitions and internal expansion projects. For instance, Western Midstream acquired Aris Water Solutions for $2 billion last year.
The company is also investing in organic growth initiatives, including the North Loving II gas processing plant and the Pathfinder Pipeline, both expected to begin commercial operations next year. Management targets low- to mid-single-digit annual distribution growth, with additional upside potential from acquisitions and major project completions. Since cutting its payout by 50% during the pandemic to reinforce its balance sheet, Western Midstream has increased its distribution by 187%.
High Yields With Higher Risk
AGNC Investment, Ares Capital, and Western Midstream Partners all offer yields far above the broader market average. Each has demonstrated an ability to maintain or grow payouts over recent years. However, their elevated yields also reflect higher risk profiles, particularly in the event of significant financial market disruption.
For investors comfortable with added volatility in exchange for substantial income potential, these stocks may present compelling opportunities.
source: Yahoo