Not everyone’s cut out for high-risk trades. I know I’m not; I’m more focused on reliable, sustainable income, with some high-quality growth stocks thrown in the mix. 

That said, my preferences don’t necessarily apply to every investor out there. Sometimes, they want high-risk, high-reward plays. And if we move the slider a little bit towards the conservative side, some investors may want to invest in high-risk, high-yield dividend stocks. 

The great thing is, you don’t have to comb the market to look for these, or even depend on random articles (that don’t cite their sources) to identify such opportunities. Barchart’s Stock Screener allows you to do it yourself. 

With that in mind, let me show you how I look for high-yield dividend stocks - while still applying a measure of safety and security to my screens. 

How I Came Up With The Following Stocks

As said, I’ll start with Barchart’s Stock Screener, and use the following filters: 

• Current Analyst Rating: 3.5 (Moderate Buy) to 5 (Strong Buy). The idea here is to look for high-yield dividend stocks that are highly regarded on Wall Street. A Moderate to Strong Buy rating typically indicates that most analysts expect the stock to perform well over the next 12 months. 
• Market Cap: $3 billion (Mid-Cap) and up. Another security measure is limiting the results to mid-cap stocks and up. Larger companies tend to offer more stability, better liquidity, enhanced chances of consistent dividend payouts, and lower risk of extreme volatility. 
• Dividend Payout Ratio: 1% to 100%. The dividend payout ratio is the portion of a company’s after-tax earnings that it allocates to pay dividends to shareholders. Typically, I’d limit this to 55% to 70% on the high end, but I have chosen to cap it at 100% to ensure that real estate investment trusts (REITs) and business development companies (BDCs) are included in the results. These companies tend to pay out 90% or more of their earnings to shareholders, you see. 
• Annual Dividend Yield (Forward): 10% or more. To complete the filters, I have set the forward dividend yield to be limited to 10% or more. This ensures only the top dividend payers will appear on the list. 

With those out of the way, I ran the screen and got exactly four results: 

I then arranged the list from highest to lowest dividend yield. And now, I’ll discuss the top three, starting with number one. 

AGNC Investment Corp (AGNC)

AGNC Investment Corp is a REIT that focuses on residential mortgage-backed securities (RMBS). Think of securities from enterprises like Fannie Mae and Freddie Mac. I’ve featured AGNC several times in my lists of top-yielding dividend stocks, and this strategy is central to that result: with government-backed securities, AGNC is less vulnerable to credit default risks. 

The company pays 12 cents a month, which translates to a forward yield of around 14.4%. Imagine - in ten years, you’d have more than doubled your initial capital just with dividends alone. 

Annaly Capital Management Inc (NLY)

Next up is Annaly Capital, another REIT that focuses on residential mortgage-backed securities, like AGNC. Now that I think about it, Annaly and AGNC typically appear together on my top dividend payers lists, which just goes to show that RMBS REITs are great options if you’re looking for high-yield investments. 

Annaly Capital pays 70 cents quarterly, which translates to an approximate 13.5% forward yield. 

Blue Owl Capital Corp (OBDC)

Last on the list is Blue Owl Capital Corporation, which is a BDC, not a REIT. As an aside, Blue Owl Capital Corporation (NYSE:OBDC) is different from Blue Owl Capital Inc. (NYSE:OWL). 

The company loans to middle-market companies with a strong focus on software services and healthcare. Blue Owl boasts over $284 billion in assets under management (AUM). 

Today, Blue Owl Capital Corp pays 37 cents quarterly, which brings its annual rate and yield to $1.48 and around 11.6%. 

However, the company also pays out 50% of its net interest income for the quarter, in addition to its regular dividend, which makes its effective yield higher. 

Final Thoughts

These high-yield dividend stocks can be great additions to long-term portfolios, but always remember that high yields typically come at a cost. Even with the criteria I set for additional security, careful research and diversification are essential to manage the risks associated with these investments.

And lastly, monitoring news, financials, and other relevant information is non-negotiable if you want to keep your income portfolio profitable. Remember, knowing how to do all of this yourself is still the best way to maintain control.