Plenty of dividend stocks out there are perfectly safe, but there are some high-yielding ones out there with high yields for a reason. These yields may be completely unsafe, as the company continues to see shares drop. It may need to cut dividends in the future to make up for the fallout.
Today, I’m going to focus on high-yielding dividend stocks that remain completely safe. So, let’s get right to it.
First up on the list is Melcor REIT (TSX:MR.UN), a real estate investment trust currently offering a 9.8% dividend yield on the TSX today. Shares of Melcor stock are down 29% in the last year, with shares falling below the $5 mark recently. However, this could provide a solid opportunity for growth-minded investors seeking dividend stocks.
It’s one of the dividend stocks in value territory trading at just 8.32 times earnings. It also holds a stable 81% payout ratio, so you know your dividends are safe right now — especially considering its most recent earnings report.
Melcor stock continued with their stable results in the first quarter, with a 95.5% retention rate and 88.4% occupancy rate. It continues to expand through acquisitions and redevelopment of properties, though there was a drop in net income and funds from operations. Still, revenue remained stable, with $3.31 million in cash and $25.57 million in undrawn liquidity. So, this stock remains a solid deal among dividend stocks for those seeking high yields.
Atrium Mortgage Investment (TSX:AI) is certainly a deal, and it’s clear why it’s down with a focus on mortgage investments. Rising interest rates have led to lower business, but it remains a steal with a dividend yield at 7.78% as of writing. It trades at just 11 times earnings, with shares down about 8.5% as of writing.
Though it holds a limited trading history, it certainly is still one of the strong dividend stocks to consider. Atrium stock reported record earnings recently, focusing on providing short loan terms of between one or two years. It earned $23.16 million in revenue — a 47% increase year over year — with earnings at $0.30 — a 20% increase. Further, its mortgage portfolio expanded to a record $866 million.
While we’re not through 2023 yet, and pressure will remain on the mortgage industry, Atrium stock looks to be in a solid position. It remains a solid buy recommendation by analysts, especially as interest rates seem to have peaked.
Finally we have Diversified Royalty (TSX:DIV), and the name really says it all. It has a diverse range of royalty companies, which it acquires on a regular basis. It mainly focuses on multi-location businesses and franchisors across North America, purchasing trademarks as well. And it’s this strategy that makes it an incredibly safe company to purchase among dividend stocks.
Royalty companies tend to be less risky, as they bring in stable cash flow. However, they also can offer growth through these acquisition strategies. That provides investors with a stable dividend yield as well, and Diversified Royalty stock currently offers a 8.08% yield as of writing.
Shares are up 3.5% in the last year, though they’re down 9% in the last three months. It continues to be recommended as an outperformer by analysts. So, I would certainly lock up this high yield while it lasts and look forward to solid future income.