Dividends are payouts from companies that share their profits with their investors. They offer a regular source of income that can increase over time. This makes them particularly attractive for long-term investments. Even a small dividend yield can result in impressive returns after many years. Dividends can also offer protection against market volatility, another reason that investors include these stocks in their portfolios.
Dividend payments are usually made quarterly. However, this isn’t a hard rule, and they can also be paid over other time frames such as monthly or yearly. Some companies pay cash dividends, others pay in stocks. Stock payments are also known as DRIP – Dividend Reinvestment Plan.
When dividends are reinvested, investors can benefit from compounding. As Benjamin Franklin said, “Money makes money. And the money that money makes, makes money”.
Dividend Yield & Dividend Payout
Companies determine dividend amounts per share. This can make it difficult for investors to compare dividends. Imagine you invest $1,000 in 2 companies. One has shares that trade for $10, the other has shares that trade for $500. Both offer investors $2 per share in dividend payments. The solution to this is dividend yield. It shows dividend payment relative to share price as a percentage.
It is worth knowing the payout ratio of a dividend stock. This is the proportion of earnings a company pays out as dividends. If the ratio is over 100% this may mean that there is a possibility that a company will reduce its dividends.
Strong Buy Dividend Stocks
Using the TipRanks Dividend Calendar we searched for Strong Buy stocks with an ex-dividend date in June 2021. Investors need to own the stock by the ex-dividend date to receive the next dividend payout. We focused on stocks with at least 5% yield and a maximum Smart Score of 10 out of 10 according to our data-driven stock score.
We found five stocks that matched these criteria.
Gaming and Leisure (GLPI)
Dividend yield: 5.78%
Ex-dividend date: Jun 10, 2021
Payout ratio: 77.33%
Payout date: Jun 25, 2021
Pennsylvania-based real estate investment, Gaming and Leisure, specializes in “acquiring, financing, and owning” casinos and gaming properties. In May the company declared an increase in its cash dividend to $0.67 per share. Individual investors with a TipRanks Smart Portfolio are Bullish on the stock, with over 29% of individual investors adding the stock to their portfolio in the past month. The stock has an average price target of $51.19, indicating upside potential of 10.42%.
Fidus Investment Corporation (FDUS)
Dividend yield: 7.14%
Ex-dividend date: Jun 11, 2021
Payout ratio: 46.23%
Payout date: Jun 28, 2021
The Fidus Investment Corporation invests debt and equity capital in a wide range of lower and middle market companies in the United States. The company has surpassed EPS consensus over the past four quarters. TipRanks investors are Bullish on Fidus too, there has been a 23.4% increase in the number of portfolios holding the stock in the past month. The current price target of $18.50 indicates upside potential of 6.57%.
Advanced Flower Capital Gamma, AFC Gamma (AFCG)
Dividend yield: 6.61%
Ex-dividend date: June 14, 2021
Payout ratio: 342.86%
Payout date: Jun 30, 2021
AFC Gamma provides cannabis companies in the United states with institutional loans, and are involved in all aspects of production from cultivation to processing, to distribution. Within the past two months, five of the company’s insiders submitted to the SEC that they bought stocks in the company, declaring these transactions as informative, in other words, indicating sentiment. Analysts have an average price target of $27.90 which translates into upside of 21.30%.
Ares Capital Corp (ARCC)
Dividend yield: 8.22%
Ex-dividend date: Jun 14, 2021
Payout ratio: 46.22%
Payout date: Jun 30, 2021
Specialty finance company, Ares Capital, provides direct loans and other investments to U.S. based private middle market companies. In Q1 hedge funds increased their holdings in the stock. Ray Dalio increased his hedge fund’s position by +111.24% and Andrew Law from Caxton Associates LP opened a new position with a reported value of $205.77K. The average analyst price target of $20.25 suggests 4.01% upside.
Sixth Street Specialty Lending (TSLX)
Sixth Street is another finance company focused on financing U.S based middle market companies. Over the past ten months, a number of the company’s insiders have been buying shares, all of them informative transactions. Analysts have set an average price target of $23.38, which translates into 4.75% upside.
See which other stocks have an ex-dividend date in June 2021.
