3 Under-$10 Stocks With Sky-High Dividend Returns

Core Insights - The article highlights three under-$10 stocks with dividends that present solid investment opportunities, each with unique strategies and strengths in their respective industries Group 1: PennantPark (PNNT) - PennantPark's portfolio reached $1.2 billion, marking a 16% sequential increase, with $231 million deployed across 12 new and 32 existing portfolio companies in Q1 fiscal 2024 [2][3] - The company achieved an internal rate of return (IRR) of 26% and a multiple on invested capital of 2.1 times, while maintaining a weighted average yield of 11.9% on investments in Q1 [3][4] - PennantPark focuses on lending to growing middle-market companies in sectors with recession resilience, such as business services, healthcare, and technology, which enhances its credit risk management [4] Group 2: Nordic American Tankers (NAT) - Nordic American Tankers reported an average time charter equivalent (TCE) of $41.6K per day per ship for spot vessels in Q4 2023, indicating strong revenue generation capabilities [5][6] - The company benefits from operating in the Suezmax tanker segment, which allows it to secure premium charter rates due to high demand [6] - Daily operating costs per ship are approximately $9K, showcasing the company's operational efficiency and cost-effectiveness [7] Group 3: Barings (BBDC) - Barings' net asset value (NAV) per share increased from $11.05 in 2022 to $11.28 in 2023, reflecting a year-over-year growth of 2.1% [8][9] - The company has reduced its exposure to non-Barings-originated assets from 24% to 11% since early 2022, enhancing portfolio quality and minimizing potential losses [9][10] - Barings maintains a stable dividend policy, with a Q4 dividend of 26 cents per share, yielding 9.2% on NAV, supported by a defensible funding mix with over $1 billion in unsecured debt liabilities [10]