When it comes to dividend investing, selecting the right stock often means choosing the largest, most consistent, most secure, and most popular companies in their respective fields. I’m talking about the Coca-Colas and the Abbotts of the world – time-tested names that have the balance sheets, brand strength, and operational base to weather economic storms while still paying (and increasing) their dividends.
However, more adventurous income investors might want to explore riskier stocks that are often overlooked. Smaller-cap companies, while not household names or industry leaders, may still offer consistent yields at more attractive levels. Such stocks, however, can be a hit or miss – unless you look for the best ones that meet the right criteria.
So, today, let’s explore the lesser-known, Wall-Street-approved dividend stocks in the market to find which ones offer consistent payouts and the best yields.
With Barchart’s Stock Screener tool, I added the following filters:
-
Number of Analysts: 8 to 12. I’ll limit the final list to stocks that Wall Street covers, but not excessively. The 8-12 range is best suited for that situation.
-
Current Analyst Rating: 4.5 to 5 (Strong Buy). I want only the best of the best on this list to improve the chances of success.
-
Dividend Payout Ratio: 25% to 60%. The dividend payout ratio is the portion of the company’s earnings that is used to pay dividends. A range of 25% to 60% represents a reasonable balance between relatively high yields and sufficient funds to support business growth and improvement – something that long-term investors would appreciate.
-
Market Cap: $3 billion to $10 billion. This filter limits my search to mid-cap companies, which are often ignored in top dividend stock lists.
-
Annual Dividend Yield: 0.01% and above.
With the filters in place, I ran the screen and got the following results:
The screen yielded 13 companies. From there, I arranged the results in order from highest to lowest TTM dividend yield, then checked the top ones for dividend consistency. Thankfully, the top three had regular dividend payments, so I chose all of them to discuss today.
I’ve featured Rithm Capital before in a “highest-yielding dividend stock” analysis, and I’m happy to say that it retains that title. The REIT provides mortgage servicing, asset management, and originations in the US. Its subsidiaries include NewRez, Genesis Capital, Guardian Asset Management, GreenBard, and Sculptor, which round out its expansive investment platform across various businesses. Rithm Capital offers a stable quarterly dividend of 25 cents per share since 2021, which translates to a $1.00 annual rate and an 8.9% yield. Based on its 43.01% dividend payout ratio, the company has sufficient funds to continue paying dividends.