High-Yield Dividend Paying Stocks Worth Exploring: Finding Income Beyond the S&P 500

When the S&P 500 offers a mere 1.2% dividend yield, savvy income investors need to look elsewhere. Three substantial dividend paying stocks stand out for delivering returns that dwarf the broader market benchmark, yet each carries a different risk profile worth understanding.

Why Dividend Paying Stocks Attract Risk-Tolerant Investors

The appeal is straightforward: while average blue-chip dividends trail inflation, certain dividend paying stocks deliver double-digit distributions. AGNC Investment, Delek Logistics Partners, and Ares Capital Corporation have all built business models specifically engineered to generate and distribute significant cash to shareholders.

AGNC Investment: The 13.6% Yield Leader

AGNC Investment (NASDAQ: AGNC) tops the list at a 13.6% distribution rate—more than eleven times the S&P benchmark. As a real estate investment trust (REIT) focused on residential mortgage-backed securities guaranteed by government agencies like Freddie Mac, AGNC employs leverage through repurchase agreements to amplify returns.

The strategy has proven effective. The REIT maintains mid-to-high teen returns on equity that align with its cost structure. This alignment has enabled AGNC to maintain its monthly payout since early 2020. However, alignment is fragile. Should market stress compress returns below capital costs, dividend resets become necessary—as happened in 2020.

Delek Logistics: The Steady Incrementalist

Delek Logistics Partners (NYSE: DKL) takes a different approach, yielding 10.1% through a master limited partnership structure. Owning midstream energy infrastructure—pipelines, processing plants, storage facilities—the company generates predictable cash underpinned by long-term contracts.

This predictability allowed Delek to extend its quarterly distribution increase streak to 51 consecutive quarters. Management forecasts coverage of 1.3x this year, providing both cushion and reinvestment capacity. Recent additions like the Libby 2 gas processing plant and water infrastructure acquisitions position the business to sustain distribution growth.

Ares Capital: The Patient Credit Investor

Ares Capital Corporation (NASDAQ: ARCC) operates as a business development company (BDC), delivering a 9.6% current yield. With nearly 600 portfolio companies primarily in secured lending (71% of assets), Ares has delivered 16+ years of stable or improving quarterly dividends.

The track record is compelling: cumulative net realized losses of 0% since inception. Q3 saw $1 billion in fresh capital raised and $3.9 billion in new commitments across 80 total portfolio companies. This investment velocity, coupled with $2.6 billion in exits, maintains the capital flow necessary to support distributions.

The Trade-Off: Income Versus Risk

Each dividend paying stock represents a calculated risk. REITs face interest-rate sensitivity. MLPs carry commodity and operational leverage. BDCs depend on credit quality and exit multiples. Yet all three maintain cleaner balance sheets and more predictable cash flows than typical growth equities.

For investors prioritizing income over capital appreciation, these dividend paying stocks merit serious consideration—provided they’ve thoroughly assessed their personal risk tolerance and investment timeline.