3 Under-the-Radar Dividend Stocks With Monster Yields of Up to 10.7%

Core Viewpoint - The article highlights three under-the-radar dividend stocks that offer attractive yields, significantly higher than the S&P 500's current yield of approximately 1.1% [1]. Group 1: Ares Capital - Ares Capital (ARCC) has a dividend yield of 9.5% and operates as a business development company (BDC), required to pay out at least 90% of its taxable income as dividends [2]. - The company has maintained stable-to-increasing dividends for 16 years, despite challenges faced by many BDCs [2]. - Ares Capital focuses on providing capital to middle-market companies with annual revenues between $100 million and $1 billion, generating income through direct loans and equity investments [3]. Group 2: Starwood Property Trust - Starwood Property Trust (STWD) leads with a dividend yield of 10.7% and has never cut its dividend since its IPO in 2009 [6]. - The REIT has maintained its dividend payout rate for over a decade, despite challenges faced by other REITs [6]. - Starwood has diversified its investments from commercial mortgages to high-quality real estate assets and infrastructure lending, which has reduced risk and provided new growth opportunities [9]. - The recent $2.2 billion acquisition of Fundamental Income Properties added 467 properties with long-term leases, enhancing its rental income stability [10]. Group 3: Western Midstream Partners - Western Midstream Partners (WES) offers a distribution yield of 9% and operates as a master limited partnership (MLP) [11]. - The MLP reset its distribution level in 2020 due to the pandemic but has since rebuilt its payout to above pre-pandemic levels [11]. - The company owns energy midstream assets that generate stable cash flow, which is used for distributions and growth investments [13]. - Western Midstream aims to increase its high-yielding payout at a low-to-mid single-digit annual rate and has recently closed a $2 billion acquisition of Aris Water Solutions [14].