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
Should l Buy ARCC?
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 over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARCC is 22.50 USD with a low forecast of 21.00 USD and a high forecast of 24.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
6 Buy
1 Hold
0 Sell
Strong Buy
Current: 19.910
Low
21.00
Averages
22.50
High
24.00
Current: 19.910
Low
21.00
Averages
22.50
High
24.00
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.
Ares Capital Faces Dividend Pressure Amid Interest Rate Declines
- Dividend Yield Pressure: Ares Capital's forward dividend yield stands at 9.9%, yet sustaining this high yield is increasingly challenging as interest rates decline, with projected EPS dropping to $1.86 in 2025, falling short of the $1.92 dividend payout level.
- Diversified Portfolio: Currently, Ares Capital invests in 603 companies across a $29.5 billion portfolio, allocating 60.5% to first-lien secured loans and 5% to second-lien secured loans to mitigate credit risk and ensure stability amid economic fluctuations.
- Increased Market Competition: While Ares stock appears cheap at 10 times forward earnings, other blue-chip stocks like Realty Income are more attractive, owning over 15,500 commercial properties and growing faster in a declining interest rate environment.
- REITs vs. BDCs: Both REITs and BDCs must distribute at least 90% of taxable income as dividends, but REITs typically grow faster when rates decline; Realty Income's forward yield is 5.1%, with expected AFFO growth of 1%-2% to $4.25-$4.27 in 2025, comfortably covering its $3.22 dividend payout.
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Ares Capital's Yield Hard to Sustain, Realty Income Offers More Stability
- Yield Challenges: Ares Capital's forward dividend yield stands at 9.9%, yet sustaining this high yield is increasingly difficult as interest rates decline, with projected EPS dropping from $2.68 in 2023 to $1.86 in 2025, falling short of the $1.92 dividend payout per share.
- Portfolio Risk Management: Ares currently invests in 603 companies across its $29.5 billion portfolio, allocating 60.5% to first-lien secured loans and 5% to second-lien secured loans to mitigate credit risk; however, the performance of floating-rate loans remains sensitive to the Fed's benchmark rate.
- Realty Income's Advantages: As one of the world's largest REITs, Realty Income owns over 15,500 commercial properties, and despite some tenants facing store closures, strong tenants like 7-Eleven and Dollar General help maintain an occupancy rate above 96%, with a forward yield of 5.1%.
- Profitability Outlook: Realty expects its adjusted funds from operations (AFFO) per share to rise by 1%-2% to $4.25-$4.27 in 2025, comfortably covering its $3.22 dividend payout per share, indicating a more attractive income opportunity compared to Ares in the current market environment.
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High-Yield Stocks Attract Investor Attention
- AGNC Investment Advantage: AGNC Investment Corp leads with a 12.5% dividend yield, appealing to passive income investors with its monthly payments, having maintained this rate for over five years post-pandemic, indicating strong profitability in the robust Agency MBS market.
- Ares Capital's Stability: Ares Capital currently offers a 10% dividend yield, with its business model of direct loans to middle-market companies generating core earnings that exceed dividend payments, maintaining or increasing dividends for 16 consecutive years, showcasing strong financial stability and growth potential.
- Western Midstream's Growth Potential: Western Midstream Partners yields 8.9%, with stable cash flows and a strong balance sheet allowing it to cover distributions and capital expenditures, while planning to enhance dividends through acquisitions and organic expansion.
- Attracting Risk-Tolerant Investors: With dividend yields significantly higher than the S&P 500, AGNC, Ares Capital, and Western Midstream appeal to income-seeking investors despite potential market volatility risks, making them attractive options for those willing to take on more risk.
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Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
Ares Capital Faces Dividend Pressure Amid Interest Rate Declines
- Dividend Yield Pressure: Ares Capital's forward dividend yield stands at 9.9%, yet sustaining this high yield is increasingly challenging as interest rates decline, with projected EPS dropping to $1.86 in 2025, falling short of the $1.92 dividend payout level.
- Diversified Portfolio: Currently, Ares Capital invests in 603 companies across a $29.5 billion portfolio, allocating 60.5% to first-lien secured loans and 5% to second-lien secured loans to mitigate credit risk and ensure stability amid economic fluctuations.
- Increased Market Competition: While Ares stock appears cheap at 10 times forward earnings, other blue-chip stocks like Realty Income are more attractive, owning over 15,500 commercial properties and growing faster in a declining interest rate environment.
- REITs vs. BDCs: Both REITs and BDCs must distribute at least 90% of taxable income as dividends, but REITs typically grow faster when rates decline; Realty Income's forward yield is 5.1%, with expected AFFO growth of 1%-2% to $4.25-$4.27 in 2025, comfortably covering its $3.22 dividend payout.
See More
Ares Capital's Yield Hard to Sustain, Realty Income Offers More Stability
- Yield Challenges: Ares Capital's forward dividend yield stands at 9.9%, yet sustaining this high yield is increasingly difficult as interest rates decline, with projected EPS dropping from $2.68 in 2023 to $1.86 in 2025, falling short of the $1.92 dividend payout per share.
- Portfolio Risk Management: Ares currently invests in 603 companies across its $29.5 billion portfolio, allocating 60.5% to first-lien secured loans and 5% to second-lien secured loans to mitigate credit risk; however, the performance of floating-rate loans remains sensitive to the Fed's benchmark rate.
- Realty Income's Advantages: As one of the world's largest REITs, Realty Income owns over 15,500 commercial properties, and despite some tenants facing store closures, strong tenants like 7-Eleven and Dollar General help maintain an occupancy rate above 96%, with a forward yield of 5.1%.
- Profitability Outlook: Realty expects its adjusted funds from operations (AFFO) per share to rise by 1%-2% to $4.25-$4.27 in 2025, comfortably covering its $3.22 dividend payout per share, indicating a more attractive income opportunity compared to Ares in the current market environment.
See More
High-Yield Stocks Attract Investor Attention
- AGNC Investment Advantage: AGNC Investment Corp leads with a 12.5% dividend yield, appealing to passive income investors with its monthly payments, having maintained this rate for over five years post-pandemic, indicating strong profitability in the robust Agency MBS market.
- Ares Capital's Stability: Ares Capital currently offers a 10% dividend yield, with its business model of direct loans to middle-market companies generating core earnings that exceed dividend payments, maintaining or increasing dividends for 16 consecutive years, showcasing strong financial stability and growth potential.
- Western Midstream's Growth Potential: Western Midstream Partners yields 8.9%, with stable cash flows and a strong balance sheet allowing it to cover distributions and capital expenditures, while planning to enhance dividends through acquisitions and organic expansion.
- Attracting Risk-Tolerant Investors: With dividend yields significantly higher than the S&P 500, AGNC, Ares Capital, and Western Midstream appeal to income-seeking investors despite potential market volatility risks, making them attractive options for those willing to take on more risk.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
The Impact of Software Concerns on BDC Stocks: Reasons Some May Be Good Investment Opportunities
- Private Credit Sector: The private credit sector is facing challenges, likened to "cockroaches" emerging from the software industry.
- Opportunities in Business Development Companies: This situation may present investment opportunities in business development companies that hold the debt of affected firms.
See More
