Investing
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. The more passive income can help cover rising costs, such as mortgages, insurance, taxes, and other expenses, the easier it is for investors to set aside money for future needs as they prepare for retirement. Dependable, recurring dividends, especially those paid monthly, are a recipe for success.
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Unless there is an economic collapse, it is unlikely the Federal Reserve will lower rates more than once in 2025.
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Quality ultra-high-yield passive income stocks offer huge total return potential.
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While more volatile than some blue chip stocks, 12% and higher dividends smooth out the ride.
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These days, many investors, especially those nearing retirement, seek passive income streams to supplement Social Security, pension income, or qualified retirement account withdrawals. We constantly screen our 24/7 Wall St. ultra-high-yield passive income stock research database for the best ideas. Four companies that generate massive revenue make sense for investors with a higher level of risk tolerance. All are favorites on Wall Street, and all four are currently offering attractive entry points.
Why do we cover ultra-high-yield stocks?
While not suited for everybody, those trying to build strong passive income streams can do exceptionally well with some of these top companies in their portfolios. Paired with more conservative blue-chip dividend giants, investors can employ a barbell approach to generate substantial passive income streams.
Arbor Realty Trust
Arbor Realty Trust (NYSE: ABR) offers nationwide solutions for multifamily finance. This stock trades at a ridiculous 8.5 times estimated 2026 earnings. Arbor Realty Trust invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.
The company operates in two segments:
- Structured Business
- Agency Business
Arbor Realty Trust primarily invests in:
- Bridge and mezzanine loans, including junior participating interests in first mortgages
- Preferred and direct equity and real estate-related joint ventures
- Real estate-related notes
- Various mortgage-related securities
The company offers:
- Bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property
- Financing by making preferred equity investments in entities that directly or indirectly own real property
- Mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction
- Junior participation financing in the form of a junior participating interest in the senior debt
- Financing products to borrowers seeking conventional, workforce, and affordable single-family housing
Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs.
FS KKR
This publicly traded business development company provides customized credit solutions to private middle-market U.S. companies and is a well-known name on Wall Street. FS KKR Capital Corp. (NASDAQ: FSK) is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments.
The company also seeks to invest in:
- First-lien senior secured loans
- Second-lien secured loans
- Subordinated loans
- Mezzanine loans
The firm also receives equity interests, such as warrants or options, in connection with debt investments for additional consideration. It seeks to purchase minority interests in common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.
The fund may invest in corporate bonds and similar debt securities opportunistically.
The company does not seek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States.
FS KKR seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.
Mach Natural Resources
Mach Natural Resources L.P. (NYSE: MNR) is an independent upstream oil and gas company that acquires, develops, and produces oil, natural gas, and natural gas liquids (NGLs). The company is focused on the acquisition, development, and production of oil, natural gas, and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas.
The assets are located throughout Western Oklahoma, Southern Kansas, and the panhandle of Texas and consist of approximately 4,600 gross operated PDP wells.
Additionally, it owns a portfolio of midstream assets that support its leases, including ownership in four processing plants with a combined processing capacity of 353 million cubic feet per day (MMcf/d), along with 1,210 miles of gas-gathering pipelines.
Mach Natural Resources also owns water infrastructure consisting of 880 miles of gathering pipeline and 55 disposal wells.
TXO Partners
TXO Partners L.P. (NYSE: TXO) acquires, develops, optimizes, and exploits conventional oil, natural gas, and natural gas liquid reserves. The stock is trading at bargain levels, with a price-to-estimated 2025 earnings ratio of 11 times. The company is a master limited partnership specializing in the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and NGL reserves in North America.
The company’s acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. Its assets consist of approximately 845,820 gross (371,796 net) leasehold and mineral acres located primarily in the Permian Basin and San Juan Basin. Its assets include a 50% interest in Cross Timbers Energy.
As an operator, it designs and manages the development, completion, or workover of all the wells it operates, and supervises operation and maintenance activities on a day-to-day basis. It markets the majority of the natural gas, NGLs, crude oil, and condensate production from the properties on which it operates. It also markets products produced by third-party working interest owners.
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