Here Are My Top 10 Ultra-High-Yield Dividend Stocks to Buy in 2024

Portfolio growth can come from many different sources. While areas including artificial intelligence (AI) or genomics are hot at the moment, one area of investing that rarely goes out of style is dividend investing.

Dividends can provide a lucrative source of passive income. And thanks to the power of compounding, reinvesting dividends and holding on to your winners for the long run can especially help investors build generational wealth.

Let’s explore 10 stocks that have ultra-high dividend yields, and assess why each is worth a close look in 2024.

1. Hercules Capital: 10.6% dividend yield

Hercules Capital (NYSE: HTGC) is a business development company (BDC) that specializes in providing capital to venture-backed start-ups. Hercules is different from a typical bank as it tends to offer more flexible financing options. So while Hercules may be assuming more risk than a bank would typically underwrite, the company attaches high coupon rates onto its term loans and also usually negotiates for warrants as part of the deal structure. This provides Hercules with an extra sweetener should one of its portfolio companies liquidate in an initial public offering (IPO) or acquisition.

Since Hercules is a BDC, it’s required to pay out 90% of its taxable income to shareholders each year in the form of a dividend. While this inherently makes Hercules appealing for dividend investors, the company’s operational performance has proven strong. As such, shareholders have cheered the stock for quite some time. Over the last 10 years, Hercules stock has a total return of 230%.

Given its successful long-term performance, coupled with a juicy dividend yield of 10.6%, passive income investors may want to scoop up shares in Hercules stock.

Image source: Getty Images.

2. Ares Capital: 9.5% dividend yield

Another BDC on my list is Ares Capital (NASDAQ: ARCC). What makes Ares a bit different than Hercules is that the company tends to focus on lower middle-market businesses across a wider array of industries. Given its size, Ares also has more financial flexibility than a typical BDC. The company…

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