Dividend Investor Earning $16,300 Monthly Reveals His 7 Best High-Yield Stocks – 'Ignore Those Who Say Dividend Investing Won't Cover Your Expenses'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 18 2025
0mins
Source: Benzinga
Investor Interest in Dividend Stocks: Amid concerns over AI stock valuations, investors are increasingly turning to dividend stocks for portfolio protection, with one Redditor sharing a portfolio that generated $16,378 in October, yielding about 14%.
High-Yield Dividend Stocks: Notable high-yield dividend stocks include Ares Capital Corporation (9.5% yield), Abrdn Global Infrastructure Income Fund (11% yield), and Dynex Capital (15% yield), among others, appealing to a diverse range of investors.
Diverse Investment Strategies: The YieldMax Universe Fund employs options strategies for income generation, while the NEOS Bitcoin High Income ETF offers exposure to Bitcoin with a distribution rate of about 28%.
Broad Appeal of Dividend Investing: Dividend stocks are highlighted as suitable for all investors, not just retirees, emphasizing their potential for income generation and portfolio diversification.
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Analyst Views on ARCC
Wall Street analysts forecast ARCC stock price to rise
4 Analyst Rating
4 Buy
0 Hold
0 Sell
Strong Buy
Current: 18.740
Low
20.00
Averages
21.75
High
23.00
Current: 18.740
Low
20.00
Averages
21.75
High
23.00
About ARCC
Ares Capital Corporation is a specialty finance company focused on providing direct loans and other investments in private middle market companies in the United States. The Company invests primarily in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position), and second lien senior secured loans. In addition to senior secured loans, it also invests in subordinated debt, which in some cases includes an equity component, and preferred equity. It also may invest up to 30% of its portfolio in non-qualifying assets. Its investment activities are focused on industries, such as software and services, health care services, commercial and professional services, financial services, commercial and professional services, insurance services, energy, food and beverage and others. The Company is externally managed by Ares Capital Management LLC (investment adviser).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Diverse Risk Premiums Assigned to U.S. Private Credit Firms
- Risk Premium Disparity: A Reuters analysis reveals that U.S. private credit firms are facing diverse risk premiums, with smaller lenders priced at greater risk, indicating a growing selectivity in a market under borrower stress.
- Spread Data: BCP Investment Corp recorded the highest weighted average option-adjusted spread (OAS) at 680 basis points, followed by Prospect Capital Corp at 449 bps, highlighting market concerns over varying credit quality among firms.
- Market Selectivity: The widening of spreads this year reflects investors' increasing differentiation of BDCs exposed to AI disruptions in SaaS companies, signaling a heightened focus on credit quality and funding risks.
- Rising Default Rates: Fitch Ratings reports that the default rate among U.S. private credit borrowers reached 6% over the past 12 months, the highest since August 2024, indicating a weakening backdrop for the private credit market.
See More
Risks and Opportunities in the Private Credit Market
- Market Growth Context: Over the past decade, the private credit market has gained prominence due to economic expansion and a funding gap created by traditional banks retreating due to regulatory pressures, attracting participation from global alternative investment firms and business development companies, highlighting potential growth opportunities in this sector.
- Performance Analysis: Blackstone has achieved an average net return of 9.4% annually in its non-investment-grade private credit strategies over nearly twenty years, nearly double the returns of the leveraged loan market, indicating the company's strong performance across various economic cycles.
- Risk Management Strategies: Despite potential risks from AI disruption, Brookfield and Blackstone primarily lend against secured real assets such as infrastructure and real estate, ensuring the safety of their investment portfolios and reducing default risks.
- Industry Focus Shift: As concerns grow over unsecured loans to software companies, investors should pay closer attention to risks in these areas, particularly the market changes that AI may bring, ensuring robust investment decision-making.
See More
The Risks and Opportunities in the Private Credit Market
- Rise of Private Credit: Over the past decade, the private credit market has surged due to economic expansion and the retreat of traditional banks, with alternative capital providers like global investment firms and business development companies filling the funding gap, which is expected to drive long-term fixed-income returns.
- Investment Performance: Blackstone has generated a 9.4% net return annually in its non-investment-grade private credit strategies since inception nearly twenty years ago, roughly double the leveraged loan market, demonstrating stability across various market cycles and bolstering investor confidence.
- Risk Management Strategies: Despite facing lower base rates and higher default expectations, Blackstone has designed its funds with low leverage, high current income, and substantial reserves for potential future losses, ensuring resilience during economic fluctuations.
- Focus on Software Sector Risks: While the overall private credit sector performs well, unsecured loans to software companies pose potential risks, particularly due to AI disruptions, prompting investors to closely monitor funds with exposure to this market for higher default risks.
See More
Ares Capital: High Dividend Appeal Amid Challenges
- Dividend Yield Advantage: Ares Capital boasts a dividend yield exceeding 10%, nearly ten times that of the S&P 500, highlighting its appeal in high-yield investments despite market volatility and uncertainty.
- Core Earnings Decline: Core earnings fell to $0.47 per share in Q1, below the $0.48 dividend level; however, the company announced its next dividend payment at the end of June, reflecting its commitment to a stable dividend policy.
- Portfolio Quality Maintained: Despite market challenges, Ares Capital's portfolio quality remains healthy with low levels of non-accruing loans and problem assets, indicating effective risk management practices.
- Optimistic Future Outlook: Although the stock price has dropped about 12% over the past year, Ares Capital expects to continue paying stable, growing dividends, and the current share price below net asset value presents an attractive opportunity for passive income seekers.
See More
Ares Capital's 10% Yield Attracts Investors Amid Risks
- High Dividend Appeal: Ares Capital's yield of 10% significantly surpasses the S&P 500's 1.1%, drawing investor interest, although caution is advised regarding the inherent risks in its business model.
- Loan Rate Advantage: In Q1 2026, Ares Capital's average loan interest rate was 10.3%, enabling it to sustain high dividends while demonstrating its capacity to support small businesses with limited access to capital.
- Net Asset Value Volatility: Despite generating $0.55 per share in investment income in Q1, covering the $0.48 dividend, Ares Capital's net asset value per share fell by $0.35, indicating volatility in loan values and market risks.
- Rising Non-Accrual Loans: By year-end 2026, non-accrual loans increased from 1.8% to 2.1%, reflecting a modest rise in credit risk, which investors should monitor as it may impact future dividend stability.
See More
Ares Management Discloses New Investment Stakes
- Portfolio Expansion: Ares Management disclosed new investments in its quarterly 13-F filing, including a $53.3 million stake in medical device manufacturer Integer Holdings, indicating a strategic move into the healthcare sector.
- First-Time Investments: The firm also made initial investments in business development companies like BlackRock TCP Capital and Carlyle Secured Lending, further diversifying its portfolio and strengthening its influence in the small and mid-sized lending market.
- Increased Holdings: Ares boosted its stakes in 17 other holdings, including Golub Capital BDC and Blue Owl Technology Finance, demonstrating ongoing confidence in the BDC sector despite pressures on lending standards.
- Asset Liquidation: The only sale recorded by Ares was the liquidation of its stake in New Mountain Finance, which sold a $477 million asset portfolio in February, reflecting Ares's strategy to adjust its investment portfolio in response to market changes.
See More
Diverse Risk Premiums Assigned to U.S. Private Credit Firms
- Risk Premium Disparity: A Reuters analysis reveals that U.S. private credit firms are facing diverse risk premiums, with smaller lenders priced at greater risk, indicating a growing selectivity in a market under borrower stress.
- Spread Data: BCP Investment Corp recorded the highest weighted average option-adjusted spread (OAS) at 680 basis points, followed by Prospect Capital Corp at 449 bps, highlighting market concerns over varying credit quality among firms.
- Market Selectivity: The widening of spreads this year reflects investors' increasing differentiation of BDCs exposed to AI disruptions in SaaS companies, signaling a heightened focus on credit quality and funding risks.
- Rising Default Rates: Fitch Ratings reports that the default rate among U.S. private credit borrowers reached 6% over the past 12 months, the highest since August 2024, indicating a weakening backdrop for the private credit market.
See More
Risks and Opportunities in the Private Credit Market
- Market Growth Context: Over the past decade, the private credit market has gained prominence due to economic expansion and a funding gap created by traditional banks retreating due to regulatory pressures, attracting participation from global alternative investment firms and business development companies, highlighting potential growth opportunities in this sector.
- Performance Analysis: Blackstone has achieved an average net return of 9.4% annually in its non-investment-grade private credit strategies over nearly twenty years, nearly double the returns of the leveraged loan market, indicating the company's strong performance across various economic cycles.
- Risk Management Strategies: Despite potential risks from AI disruption, Brookfield and Blackstone primarily lend against secured real assets such as infrastructure and real estate, ensuring the safety of their investment portfolios and reducing default risks.
- Industry Focus Shift: As concerns grow over unsecured loans to software companies, investors should pay closer attention to risks in these areas, particularly the market changes that AI may bring, ensuring robust investment decision-making.
See More
The Risks and Opportunities in the Private Credit Market
- Rise of Private Credit: Over the past decade, the private credit market has surged due to economic expansion and the retreat of traditional banks, with alternative capital providers like global investment firms and business development companies filling the funding gap, which is expected to drive long-term fixed-income returns.
- Investment Performance: Blackstone has generated a 9.4% net return annually in its non-investment-grade private credit strategies since inception nearly twenty years ago, roughly double the leveraged loan market, demonstrating stability across various market cycles and bolstering investor confidence.
- Risk Management Strategies: Despite facing lower base rates and higher default expectations, Blackstone has designed its funds with low leverage, high current income, and substantial reserves for potential future losses, ensuring resilience during economic fluctuations.
- Focus on Software Sector Risks: While the overall private credit sector performs well, unsecured loans to software companies pose potential risks, particularly due to AI disruptions, prompting investors to closely monitor funds with exposure to this market for higher default risks.
See More
Ares Capital: High Dividend Appeal Amid Challenges
- Dividend Yield Advantage: Ares Capital boasts a dividend yield exceeding 10%, nearly ten times that of the S&P 500, highlighting its appeal in high-yield investments despite market volatility and uncertainty.
- Core Earnings Decline: Core earnings fell to $0.47 per share in Q1, below the $0.48 dividend level; however, the company announced its next dividend payment at the end of June, reflecting its commitment to a stable dividend policy.
- Portfolio Quality Maintained: Despite market challenges, Ares Capital's portfolio quality remains healthy with low levels of non-accruing loans and problem assets, indicating effective risk management practices.
- Optimistic Future Outlook: Although the stock price has dropped about 12% over the past year, Ares Capital expects to continue paying stable, growing dividends, and the current share price below net asset value presents an attractive opportunity for passive income seekers.
See More
Ares Capital's 10% Yield Attracts Investors Amid Risks
- High Dividend Appeal: Ares Capital's yield of 10% significantly surpasses the S&P 500's 1.1%, drawing investor interest, although caution is advised regarding the inherent risks in its business model.
- Loan Rate Advantage: In Q1 2026, Ares Capital's average loan interest rate was 10.3%, enabling it to sustain high dividends while demonstrating its capacity to support small businesses with limited access to capital.
- Net Asset Value Volatility: Despite generating $0.55 per share in investment income in Q1, covering the $0.48 dividend, Ares Capital's net asset value per share fell by $0.35, indicating volatility in loan values and market risks.
- Rising Non-Accrual Loans: By year-end 2026, non-accrual loans increased from 1.8% to 2.1%, reflecting a modest rise in credit risk, which investors should monitor as it may impact future dividend stability.
See More
Ares Management Discloses New Investment Stakes
- Portfolio Expansion: Ares Management disclosed new investments in its quarterly 13-F filing, including a $53.3 million stake in medical device manufacturer Integer Holdings, indicating a strategic move into the healthcare sector.
- First-Time Investments: The firm also made initial investments in business development companies like BlackRock TCP Capital and Carlyle Secured Lending, further diversifying its portfolio and strengthening its influence in the small and mid-sized lending market.
- Increased Holdings: Ares boosted its stakes in 17 other holdings, including Golub Capital BDC and Blue Owl Technology Finance, demonstrating ongoing confidence in the BDC sector despite pressures on lending standards.
- Asset Liquidation: The only sale recorded by Ares was the liquidation of its stake in New Mountain Finance, which sold a $477 million asset portfolio in February, reflecting Ares's strategy to adjust its investment portfolio in response to market changes.
See More
