Investors have been grappling with the effects of the Federal Reserve’s interest rate policy, as well as other challenges such as a potential government shutdown, declining consumer confidence, and a surge in oil prices. These factors have sparked interest in strong defensive plays, particularly high-yield dividend stocks, as they offer protection and passive income during uncertain times. Wall Street analysts also seem to agree, identifying high-yield dividend payers as attractive investments. Two such picks include OneMain Holdings and Kimbell Royalty Partners.
OneMain Holdings is a financial services company that focuses on providing consumer services to customers in the sub-prime banking loan segment. The company offers a range of financial services, including personal loans and insurance products, to customers who may not qualify for services from traditional banks. Despite an earnings miss, OneMain has remained committed to its policy of generous capital returns, including share buybacks and dividend payments. The company’s dividend yield is currently at 10.2%, providing attractive income potential.
Kimbell Royalty Partners, on the other hand, is an energy firm that acquires mineral rights and owns lands, wells, and royalty rights. The company allows third-party operators to conduct extraction operations and receives royalties on the oil and gas produced. Kimbell recently made its largest acquisition to date, adding royalty holdings in the Permian and Mid-Continental basins. This transaction is expected to significantly increase the company’s production and generate substantial royalties. Kimbell’s dividend yield is currently at 10%, making it an appealing investment option.
Overall, these high-yield dividend stocks offer protection and income potential in the face of market uncertainties. Both OneMain Holdings and Kimbell Royalty Partners have been identified by Wall Street analysts as attractive buys, with the potential for share appreciation of up to 40% in the coming year.