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Dividend investing took a back seat ever since the AI-led craze caused everyone to pile into technology growth stocks. However, long-term investors seeking a stable and reliable income stream always look for strong dividend payers that can survive market volatility. A few days ago, a Redditor posted a detailed income report on r/Dividends, a community of over 580,000 members, saying he earns $110,000 a year in dividends with an investment of about $1.2 million.
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The Redditor said part of his portfolio is allocated to money market funds and fixed income.
“About half of it is in money market/fixed income making 5%. All of it together is making $110k a year. Just sharing for feedback and comments. The plan is to move the fixed income into dividend equities as the rates go down so the income keeps up or increases,” he said.
When asked how he accumulated $1.2 million to invest, the Redditor said he worked for 20 years while his wife worked for 15 years.
“We both have 401ks apart from this after-tax account, which we plan to leave alone for a while,” he added.
The investor generously shared his detailed portfolio. Let’s examine some of the important stocks and funds in it.
Schwab Value Advantage Money Fund (SWVXX)
The biggest investment in the portfolio of the Redditor making about $110,000 a year is the money market fund Schwab Value Advantage Money Fund (SWVXX). The fund is suitable for those looking for a stable, secure place to park their cash. It has total assets of about $204 billion and yields approximately 5.13%.
Blackrock Multi-Sector Income Trust
Blackrock Multi-Sector Income Trust (NYSE:BIT) yields about 9.8% and invests in loan and debt instruments. The fund’s goal is to generate income and capital appreciation. Some of its top holdings include FEDERAL NATIONAL MORTGAGE ASSOCIATION, UNIFORM MBS, TRANSDIGM INC., CLOUD SOFTWARE GROUP INC. and HUB INTERNATIONAL LTD.
AGNC Investment Corp
AGNC Investment Corp (NASDAQ:AGNC) is a mortgage REIT with a dividend yield of about 13%. The company pays monthly dividends. AGNC invests in secure agency mortgage-backed securities since Fannie Mae or Freddie Mac guarantees the MBS principal in case of defaults.
Icahn Enterprises LP
Billionaire Carl Icahn’s conglomerate, Icahn Enterprises LP (NASDAQ:IEP), is one of the stocks in the Redditor’s portfolio. IEP has a 30% yield, but its sustainability and safety have been raising questions for quite a while now.
In August, Icahn settled with the SEC over charges related to personal margin loans. Last year, IEP cut its dividend by 50% and now pays about $1 per share.
Horizon Technology Finance Horizon Technology Finance Corp (NASDAQ:HRZN) is a business development company that lends to technology, life science, health care and information services companies. HRZN pays monthly dividends and yields about 12%.
Stellus Capital Investment Corp
Stellus Capital Investment Corp (NYSE:SCM) is another business development company on the list. It pays monthly dividends and yields around 12%. Stellus generates income through its portfolio of debt investments in middle-market companies. The stock is up about 6.5% this year.
Realty Income
Realty Income Corp (NYSE:O) has become a no-brainer dividend stock in Redditors’ portfolios, generating decent monthly income. The company pays monthly dividends and has increased its payouts for 29 years. The latest monthly dividend increase came earlier this month when Realty Income raised its dividend by 0.2%.
Cornerstone Strategic Value Fund
Cornerstone Strategic Value Fund Inc. (NYSEAMERICAN: CLM) is a closed-end fund that generates income by investing in public companies. The fund yields about 17% and pays monthly dividends.
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Global X Nasdaq 100 Covered Call ETF
Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) generates income by selling covered call options on the Nasdaq-100 Index. The fund was started in 2013 and has since paid monthly income to investors. The fund yields about 11.5%. Some of the top holdings of the ETF are Apple, Nvidia, Microsoft, Amazon and Broadcom.
Energy Transfer
With a dividend yield of about 8%, Energy Transfer LP (NYSE:ET) is a popular dividend stock on Reddit. The company is relatively insulated from the volatile commodities market since most of its revenue comes from fee-based contracts. Last month, Energy Transfer LP (NYSE:ET) increased its full-year profit outlook after posting strong volumes for the second quarter.
MPLX
Midstream energy infrastructure company MPLX LP (NYSE:MPLX) is one of the high-yield dividend stocks in the Redditor’s portfolio. The company has a dividend yield of about 8% and is owned by Marathon Petroleum. During the second quarter, MPLX revenue rose about 13% yearly, beating Wall Street’s estimates.
Ares Capital
Ares Capital Corporation (NASDAQ:ARCC) is one of the notable business development companies in the Redditor’s portfolio, earning $110,000 in dividends. The stock has a dividend yield of about 9.4%. During its second-quarter earnings call, Ares Capital’s management said the company swapped its $850 million issued debt to a floating interest rate. Analysts believe this move would help the company position well for the upcoming rate cut cycle, as its interest burden will decrease with the expected ease in monetary policy.
Interest Rates Are Falling, But These Yields Aren’t Going Anywhere
Lower interest rates mean some investments won’t yield what they did in months past, but you don’t have to give up those gains. Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
Arrived Homes, the Jeff Bezos-backed investment platform, offers a Private Credit Fund. This fund provides access to a pool of short-term loans backed by residential real estate with a target of 7% to 9% net annual yield paid to investors monthly. The best part? Unlike other private credit funds, this one has a minimum investment of only $100.
Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.
This article Dividend Investor Making $110,000 Shares His Portfolio: Top 12 Stocks and ETFs You Might Be Missing originally appeared on Benzinga.com
