With US inflation holding at 2.7% as of July 2025, the typical risk-free rate of 4% to 5% looks far less compelling as a long-term investment. While treasuries are by far the safest option out there, sometimes, safe just doesn’t cut it, especially if you’re looking for high income.
Thankfully, there are certain stocks out there that offer high yields - without falling into the usual traps of unsustainable payout ratios, overleveraged balance sheets, or free-falling stock prices.
Not that they don’t come with risks - those are still on the table. However, the stocks I’ll be discussing today are favored by Wall Street analysts, which gives them added credibility and appeal.
So, let’s explore the top three dividend stocks with 10% or more yields plus buy ratings from analysts.
How I Came Up With This List
Using Barchart’s Stock Screener, I entered the following criteria:
- Dividend Payout Ratio: 100% and below. The dividend payout ratio is the portion of the company’s after-tax earnings that is used to pay dividends to shareholders. Now, the usual “healthy” range is around 25% - 30% on the lower end and 55% - 70% on the higher end. However, I’ve elected to set the limit to 100% as certain companies (i.e. REITs) are required by law to pay more than 90% of their earnings to shareholders.
- Annual Dividend Yield: 10% or more. I’m limiting the list to stocks with double-digit yields. Though I’m more of a conservative investor, I admit I’ve added a couple of high-yield stocks to my portfolio over the years to strike a nice balance between stability and high income.
- Market Cap: $3 billion and above. Larger companies typically offer more stability and liquidity, making them a little safer than smaller, high-yield stocks.
- Current Analyst Rating & Number of Analysts: 3.5 (Moderate Buy) to 5 (Strong Buy), and eight or more. I find Sall Street ratings to be a pretty good indicator of how the market perceives certain stocks and their prospects - though, they are by no means a 100% accurate predictor of anything. However, more analyst coverage concurring with the ratings makes me more confident that the ratings represent a reasonable consensus.
With those filters set, I ran the screen and got four companies:
I arranged the results from highest to lowest yields, and I’ll discuss the top three, starting with number one:
AGNC Investment Corp (AGNC)
AGNC Investment Corporation (NASDAQ:AGNC) is a mortgage real estate investment trust (REIT) that invests in government agency residential mortgage-backed securities (RMBS), which are guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. With this strategy, AGNC virtually eliminates credit default risks, allowing it to maintain one of the highest dividend yields in the REIT sector.
However, due to its dependence on government-backed securities, the REIT’s performance is highly sensitive to interest rate fluctuations and prepayments - something to look out for if you’re interested in the stock.
AGNC pays 12 cents monthly, bringing its total annual dividend to $1.44 per share, per share, which translates to a nearly 15% yield today. Notably, dividends have stayed 12 cents monthly since 2020. AGNC stock also has a moderate buy rating from 15 analysts, with an average 4.07 score and a high target price $10.50.
Annaly Capital Management Inc (NLY)
Like AGNC, Annaly Capital Management (NYSEL:NLY) is also an RMBS. The only difference is that Annaly also invests in non-agency mortgage assets, mortgage servicing rights, and other credit products, giving it a broader portfolio mix. The company has over $90 billion in assets and $13 billion worth of permanent capital.
This year, Annaly has been paying dividends since 1997 and recently raised its quarterly dividend from 65 cents to 70 cents a share, or $2.80 annually, translating to its approximate yield of 13%.
Analysts rate NLY stock a moderate buy with an average score of 4.20 - similar to AGNC and a $23 high target price. Still, I suspect growth is a secondary consideration behind that excellent 13% yield.
Blue Owl Capital Corporation (OBDC)
Rounding out this list is a business development company, Blue Owl Capital Corporation (NYSE:OBDC).
A BDC works similarly to a REIT, but loans money to businesses instead. Blue Owl, in particular, focuses on middle-market companies in the US, offering lending solutions such as senior secured, subordinated, mezzanine loans, and other equity-related instruments. The company has 233 companies in its portfolio, with a total of 19% of its holdings in internet software/services and healthcare.
Blue Owl pays a 37-cent quarterly dividend plus 50% of its net investment income; its most recent payout got an extra 2 cents. Accounting for regular dividends alone, the company pays around a 10% forward yield. However, Blue Owl Capital has paid $1.61 in the last twelve months, bringing its TTM yield to around 11%. Not bad at all.
Aside from that, OBDC boasts the only strong buy rating in this list, with an average score of 4.42 and a high target price of $18.
Final Thoughts
Not all high-yield stocks are dividend traps. Some companies - like the ones above - offer a rare opportunity for investors to receive high income without sacrificing dividend sustainability. However, it pays to be mindful, especially with such high yields. Remember, “reduced risk” is an entirely different thing from “no risk at all,” even if Wall Street thinks the stock is a good buy.
So, remember to do your due diligence and keep an eye out for developments that may affect your positions. It pays to know your portfolio, inside and out.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
