Yields That Actually Sting (In a Good Way)

Let’s be honest, the dividend landscape right now? A bit…sad. The S&P 500 is offering up yields so pathetic, it’s practically apologetic. Around 1.1%? Seriously? It’s like offering someone a crumb and expecting gratitude. I mean, I’m not saying I expect a fortune, but a little respect for my investment, please. So, naturally, I went digging. Because let’s face it, I have a weakness for a decent yield. A proper yield. And I found a few… interesting characters. Don’t judge me. I like a bit of risk with my reward. And these three? They’re not exactly household names. Which, frankly, is part of the appeal. It means we might actually get in on the ground floor before everyone else realizes what’s happening.

Ares Capital: The Surprisingly Reliable One

Okay, Ares Capital (ARCC 0.29%). 9.5% yield. It sounds… almost too good to be true, doesn’t it? Turns out, it’s a business development company, which basically means they lend money to companies that banks are too scared to touch. Middle-market companies. The ones that are actually doing things, but might not have the squeaky-clean balance sheets. And they’ve been doing it for 16 years, consistently paying – and even increasing – their dividend. Which, in this market, is practically a superpower. I mean, seriously, stability? It’s almost… unsettling. They’ve managed to keep their net realized loss rate around 0%. Zero! While everyone else is losing their shirts. It’s a bit like watching a magician. How do they do it? Diversification, apparently. 587 portfolio companies. It’s like they’re betting on everything. A little chaotic, but effective.

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Starwood Property Trust: The One I’m Secretly Rooting For

Right. Starwood Property Trust (STWD +0.72%). Now this is interesting. A whopping 10.7% yield. It’s almost aggressive. They’re a REIT, which means they own real estate. But they’re not just sticking to boring office buildings. They started with commercial mortgages, which is safe enough, and then decided to branch out. Smart. Investing directly in high-quality properties, residential stuff, infrastructure lending. It’s like they’re trying to be everything to everyone. And they just dropped $2.2 billion on Fundamental Income Properties. 467 properties with long-term leases and rent escalations. It’s a bit like building a fortress. Solid, reliable income. And honestly, I like a company with ambition. It’s a bit reckless, but I can appreciate it. They haven’t cut their dividend since 2009. That’s… impressive. Almost suspiciously so.

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Western Midstream Partners: The Slightly Complicated One

Western Midstream Partners (WES +0.86%). Okay, this one requires a little explaining. It’s a master limited partnership, which basically means you get a K-1 tax form. Don’t ask. It’s a headache. But they’re offering a 9% distribution yield, which, let’s be honest, is enough to make me overlook a little tax paperwork. They own energy midstream assets – pipelines, processing plants, all that stuff. It’s not glamorous, but it’s reliable. And they’ve bounced back from the pandemic. Their distribution is now higher than it was pre-pandemic. Which is… reassuring. They’re investing in new projects – acquisitions, pipelines, processing plants. It’s a bit like trying to build a bigger boat when the storm is already brewing. But hey, at least they’re trying. They aim for low-to-mid single-digit annual payout increases. Ambitious, but achievable. And honestly, a little ambition is always welcome.

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Monster Income? Proceed With Caution (And a Little Excitement)

So, there you have it. Ares Capital, Starwood Property Trust, and Western Midstream Partners. Three companies offering yields that actually sting. In a good way, obviously. They’re not without risk, mind you. Nothing worth having ever is. But they’re all in solid positions to maintain their payouts. And that, my friends, is what we’re looking for. A little passive income to fuel our… questionable life choices. Don’t tell anyone I said that. Just… do your research. And maybe, just maybe, we can all get a little richer together. Or at least slightly less broke.

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2026-01-28 13:13