Dividends All Day Long!
If you are wondering how my days have been going, after work I made a TikTok, a YouTube Short, and a YouTube video all before going to the gym! It's been a very productive day to say the least so I figured I would top it off by writing a blog post that follows suit with the video I put out today.
Today I got fixated on dividend stocks; something I have been looking more and more into for a few weeks now. I made a video on two stocks that have a high paying dividend, but that I don't yet own. Now before I dive into these two stocks, make sure you go watch that video, as its much easier to understand why I like these stocks while looking at their charts and dividend histories. Firstly, I need to mention how these types of stocks work. Dividend stocks, or high yielding ones to be more specific, pay out monthly or quarterly dividends. A dividend is a portion of the companies profits divided up to each share. As an example a company that has a stock price of $10, and pay a 10% dividend will pay out $1 per share of the stock owned. You percentage yield from the stock is calculated on how much money you put in. Sticking with our earlier scenario, if you invested $100 dollars and bought 10 shares, you would get $10 every year that you own the stock, as long as they don't cut their dividend. If you bought $1,000 worth, I.E. 100 shares, you would be getting $100 each year, and so on. These kinds of stocks typically don't have a lot of price appreciation (the price per share doesn't change that much). This is due to the company being fairly stable. This is the trade off you get with high yielding dividend stocks. If the market is boom they still pay out that same dividend, but have a little more price movement. If the market is dropping, you get those dividends still but lose some of the overall value of your investment, since it follows the market at a slower pace.
Now for the fun stuff, the tickers! First up in the video I talked about Aeries Capital Corporation ($ARCC). A BDC that has a nice 19 year dividend that has never been cut. I love this stock because it pays a high 8.6% dividend yield. This may not seem like a lot if you only put in a little bit of money, but if you are able to continue to add to it, and reinvest those dividends, over a few years the profits will begin to compound. ARCC is very well run, and they have a history of nice dividends, including many bonus dividends which are paid out in the event of the company having a very nice quarter. These help boost the value of the stock and keep the investors happy with their money growing over time. Now ARCC hasn't had much price movement over the past 20 years, but that what I like in these types of investments. It means that they are very consistent in good times and bad. It's terrifying having a dividend company that drops and runs randomly! If you like that style of trading, swing trading is totally for you. ARCC continues to increase their dividend and shows nothing but strength even in these terrible months we have been having. It's not recession proof, but being down 15% in a market that is averaging being down 30% is miraculous.
The next dividend stock is a little more risky, simply because its not nearly as old. Time tells all with these dividend stocks. The company is Owl Rock Corporation (ORCC). It's a dividend fund created in 2019, only three years ago. It cut it's dividend after its first payout, but hasn't since then. The beauty with this fund is also its risk, how young it is. OWL is fairly beaten down currently due to the market conditions. Since it is a newer fund, investors weren't sure how well it would hold up, so many shifted to safer options. What this is leaving us now with is a lot of potential. They have a good management team and have paid out some crazy special dividends in the past. Recently with their price dropping, they haven't been paying those out. Once they bounce back and we see a bull market coming on, I bet we see a rise in those dividends and thus a rise in our profits! Again though be careful with this one. do your DD on both of these plays and make sure you think they are a good option when you purchase!
I think both of these will do well, and I will be adding on any more big dips that we see. I also plan on holding these in my Roth IRA due to their high dividend. Make sure you go subscribe to my YouTube so you can watch these videos at home and on the go! Thanks for reading this, and good luck trading!!