In a tougher market, some investors stick with familiar dividend names for safety. But outside the safety of the blue-chip group, there are lesser-known companies still offering high yields and enough quality to deserve a closer look. These under-the-radar names may not get much attention, but that is often where interesting income opportunities begin.
But, of course, high yields don’t automatically mean good investments. That’s why today, I’m looking for high-yield stocks that still pass Wall Street’s scrutiny.
Using Barchart’s Stock Screener, I selected the following filters to get my list:
Annual Dividend Yield % (FWD): Left blank so I can sort it later from highest to lowest.
Market Cap ($K): $300M – $10B. “Small” to “Mid-sized” companies that are usually overlooked.
Current Analyst Rating: 3.5-5. Stocks that analysts call a “Moderate” or “Strong Buy.”
Number of analysts: 12 or more. A higher number tells a stronger consensus confidence.
Dividend Investing Ideas: Best Dividend Stocks. This Barchart-curated list helps narrow down the field even further to companies that have already been screened for dividend strength, payout consistency, and analyst ratings.
I set the screen, hit the results, and got 14 companies. I will cover the top three with the highest forward annual dividend yield.
Let’s start with the first dividend stock:
Blue Owl Capital Corp. is a business development company (BDC) that lends to U.S. middle-market businesses. It helps established private companies fund growth, acquisitions, and other business needs, while also being part of the broader platform behind the recent Atlas Holdings investment. I’ve featured Blue Owl Capital before in my best mid-cap dividend stocks list, and even back then, its yields were in the double-digits.
Today, Blue Owl stock currently trades at a market cap of about $5.7 billion and pays a forward annual dividend of $1.48, translating to a yield of approximately 13%, the highest on this list and one of the highest yields available.
With that, a consensus among 14 analysts rate OBDC stock a “Strong Buy,” and the target prices suggest potential upside of as much as 36%.
Story Continues
The next dividend stock on my list is Sixth Street Specialty Lending Inc., another business development company that lends to middle-market businesses. It gives investors access to private credit through a portfolio focused mainly on directly originated loans and other income-producing investments. Sixth Street focuses on emerging players in high-growth sectors like healthcare, energy, tech, and more.
Sixth Street pays $1.84 per year, yielding around 9.7%. For a company with a market cap of around $1.8 billion, that is a fairly sizeable.
Meanwhile, a consensus among 12 analysts rates the stock a “Moderate Buy,” with the mean and high target prices suggesting between 18% and 32% potential upside in the stock over the next year.
The last dividend stock on my list is OneMain Holdings Inc., a consumer finance company that provides personal loans and related products to nonprime customers across the U.S. OneMain was also in the news recently, thanks to its Credit Worthy financial education program, as Texas moved to require personal finance courses for high school students. What a great idea!
One thing about OneMain that I like is that the stock has already shown some significant recovery after falling to below $50 on March. This tells me that buyers were willing to step in and support the stock at that level. For a dividend pick, price doesn’t always matter, but it’s nice to see evidence of potential income and capital appreciation.
Going back, OneMain has a market cap of nearly $7 billion and pays a forward annual dividend of $4.20, translating to a yield of around 7%.
Analyst sentiment also leans bullish, with 17 analysts rating the stock a consensus “Moderate Buy.” The mean and high target prices also suggest between 15% and 44% upside over the next year- the highest on this list.
These are three of the highest-yielding under-the-radar dividend stocks currently backed by Wall Street. These names are not for everyone as they may not offer the same level of stability or long track record as Dividend Aristocrats or Dividend Kings, but every established dividend name had to start somewhere.
That said, for investors willing to look beyond the usual blue-chip names, these companies may be worth a closer look.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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