Top dividend stocks have been a go-to option for investors looking for consistent passive income. Among the vast array of choices, a select group of dividend-paying companies stands out for their relatively high yields and a “Strong Buy” consensus from Wall Street analysts. That combination of generous yields with the endorsement of financial experts makes these dividend stocks reliable investments to generate recurring income.
Using Barchart’s Stock Screener Tool, I focused on top dividend stocks with yields of 8% or higher and a “Strong Buy” rating from analysts. The results pointed to three stocks: Hafnia (HAFN), Rithm Capital (RITM), and CTO Realty Growth (CTO).
Let’s take a closer look at these dividend stocks and explore why they have the potential to significantly enhance your income portfolio.
#1. Hafnia
Hafnia (HAFN) is a leading tanker owner, transporting oil (CLV24) and related products With a fleet of approximately 200 vessels, Hafnia provides a fully integrated shipping platform, including commercial and chartering services, technical management, large-scale bunker procurement operation, and pool management. The company’s comprehensive offerings position it well to capitalize on market opportunities while efficiently managing its operations.
Hafnia’s diverse revenue streams, modern fleet, strategic acquisitions, and joint ventures allow it to grow its earnings and reward its shareholders with robust dividend payments. The company has demonstrated its commitment to rewarding investors through regular dividend payments. Moreover, the ongoing strength in the product tanker market raises the potential for even higher payouts, which could further enhance shareholder value.
The product tanker market has a favorable outlook. Demand is projected to stay strong, driven by longer transportation distances and the ongoing dislocation of refineries. Elevated tanker rates are anticipated to persist over the long term, with increased contracting activity bolstering Hafnia’s growth trajectory.
Hafnia’s solid financial position has prompted management to raise its dividend payout ratio. Moreover, Hafnia stock offers an attractive yield of over 10%. Additionally, the stock has garnered a “Strong Buy” consensus rating from analysts.
#2. Rithm Capital
Rithm Capital (RITM) focuses on real estate and financial services. It operates as an internally managed Real Estate Investment Trust (REIT) with a solid portfolio of assets. For instance, Rithm had approximately $42 billion in total assets and $32.1 billion in assets under management (AUM) as of June 30, 2024.
Thanks to its solid financials, Rithm Capital has returned $5.4 billion in dividends in the last decade. The company is well-positioned to enhance its shareholder value, led by its focus on strengthening and diversifying its platform.
Rithm’s mortgage business, Newrez, continues to be a significant earnings driver, and supports its dividend payouts. Rithm announced the acquisition of Specialized Loan Servicing (SLS) to bolster its capabilities in October 2023. This acquisition strengthens Newrez’s servicing platform, and enhances Rithm’s strategy to expand its mortgage servicing rights (MSRs) portfolio, strengthening its position in mortgage origination and servicing across multiple channels.
Beyond its mortgage business, Rithm has taken steps to expand its asset management capabilities. In 2023, the company acquired Sculptor Capital Management, which aimed to accelerate Rithm’s growth into private capital and alternative asset management. By integrating Sculptor’s operations, Rithm plans to expand its AUM, fee-earning potential, and presence across new investment verticals, contributing to its long-term success.
Looking ahead, Rithm plans to expand its commercial real estate platform. Further, Genesis Capital, Rithm’s residential transitional lending arm, is also poised for growth, with expectations of increased origination volumes in the near future.
With a current dividend yield of over 8% and a “Strong Buy” consensus among analysts, Rithm Capital presents a compelling investment opportunity for income-seeking investors.
#3. CTO Realty Growth
CTO Realty Growth (CTO) is an attractive investment for earning high yields and steady passive income. The REIT focuses on retail properties across high-growth U.S. markets. The company’s portfolio of large-scale, multi-tenant properties adds stability and consistently drives its earnings and cash flows to support its payouts. CTO also has an investment in Alpine Income Property Trust (PINE), which diversifies its revenue streams and enhances its growth potential.
CTO targets properties in thriving markets with strong yield potential. This strategy enables CTO Realty to maximize its rental income and capture opportunities from property value appreciation. The REIT also sports a high occupancy rate of 96%, which indicates the solid demand for its properties and adds stability to its earnings.
CTO Realty Growth has paid dividends for 48 years. Moreover, with a dividend yield of about 8%, it remains a compelling choice for income-seeking investors. Additionally, Wall Street analysts have given CTO favorable ratings, with the consensus rating of "Strong Buy" further highlighting its potential as a solid investment opportunity.
