While everyone else is sweating over AI stock valuations, dividend investors are quietly collecting checks. And one of them just proved the strategy works better than skeptics want to admit.
Last month, a member of r/Dividends — a Reddit community with 287,000 dividend enthusiasts — shared something that'll make income investors jealous. His portfolio generated $16,378 in October alone, with a yield hovering around 14%. That's not a typo, and it's not a one-time fluke.
"Please don't let anyone tell you that dividend investing will not pay the bills in retirement," he wrote. "With a diversified portfolio and careful maintenance, I have been able to replace my current income well ahead of schedule."
His portfolio holds about 40 different positions, but let's focus on the seven highest-yielding stocks doing the heavy lifting.
Ares Capital Corporation
Ares Capital (ARCC), a business development company, offers a dividend yield around 9.5%. The company recently reported Q3 earnings that met Wall Street's expectations, and its interest income from investments actually came in above what analysts projected. Business development companies lend to mid-sized businesses, collecting interest that gets passed along to shareholders.
Abrdn Global Infrastructure Income Fund
Abrdn Global Infrastructure Income Fund (ASGI) gives investors exposure to infrastructure projects worldwide through both public and private equity investments. Think toll roads, utilities, and energy pipelines. The fund yields approximately 11%.
Energy Transfer LP
Energy Transfer LP (ET) is a midstream energy play yielding about 8%. The company moves oil and gas around through pipelines and storage facilities. It posted Q3 results last week that missed estimates, with revenue dropping 3.9% year over year. Not ideal, but the distribution keeps flowing.
NEOS Bitcoin High Income ETF
NEOS Bitcoin High Income ETF (BTCI) provides direct Bitcoin exposure while generating income through options strategies. The fund sports a distribution rate around 28% and pays monthly. Yes, crypto and income generation in one package — welcome to 2024.
YieldMax Universe Fund of Option Income ETFs
YieldMax Universe Fund of Option Income ETFs (YMAX) holds multiple ETFs that use options strategies to create income. This one's wild: it has a monthly distribution rate of approximately 75%. That's not sustainable long-term through dividends alone — these high rates typically come from return of capital and options premiums, not traditional business profits.
Dynex Capital
Mortgage REIT Dynex Capital (DX) yields about 15% and pays monthly. The stock is up 6% year-to-date. The company's co-chief executive, Smriti Popenoe, recently appeared on a podcast and made the case that dividend stocks aren't just for boomers — they work for all investors looking for income.
Kimbell Royalty Partners
Texas-based Kimbell Royalty Partners (KRP) acquires mineral and royalty interests in oil and gas properties. Essentially, they own the rights to get paid when energy companies drill and produce on certain land. The stock yields approximately 12%.
Dividend stocks are having a moment right now as market volatility picks up and investors start questioning whether AI stocks can justify their stratospheric valuations. When growth stocks get shaky, income suddenly looks pretty attractive. This investor's portfolio shows it's possible to generate serious monthly income if you're willing to do the homework and manage the positions carefully.
Just remember that ultra-high yields often come with elevated risk — whether that's from leverage, options strategies, or exposure to volatile sectors like energy and mortgages. There's no such thing as a free lunch, but there might be a reasonably priced one if you diversify properly.