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Value stocks are making a comeback in 2024 as the Fed struggles to curb inflation and lower interest rates. Investors prefer value stocks during times of high inflation because they are less affected by high interest rates than growth stocks, which suffer from the high cost of credit needed for expansion. This makes current profits from value stocks more preferable to the future profits promised by growth stocks.
With the Fed hinting that it will keep interest rates high until inflation is brought down to 2%, value stocks are becoming the best stocks to invest in today. Below are the top dividend-paying value stocks to buy in May 2024 that offer yields above 7%.
Altria Group, Inc. (NYSE:MO), the world’s second-largest tobacco company, is our top pick for value stocks with high yields and a good dividend history. The stock is performing exceptionally well in May 2024 thanks to fears of an impending recession, as it is seen as a safe haven in the event of a market downturn thanks to its recession-resistant products. Altria Group offers an impressive annual dividend yield of 8.46% and has been paying high-yielding dividends for 52 years, consistently appearing in the S&P 500’s list of highest dividend-paying stocks.
Ares Capital Corporation (NASDAQ:ARCC) is another high-yielding value stock worth considering and is one of Warren Buffet’s top picks. Buffet is considered the most successful value investor today. Ares Capital offers an eye-watering annual dividend yield of 8.95% and has been paying growing dividends for the past 13 years. As a company providing financing solutions to mid-sized businesses, Ares Capital tends to perform better in a high interest rate environment.
Diversify with these high-yielding alternatives
While these value stocks offer attractive returns, investors should also consider alternative investments that can offer high returns and diversification. Two such opportunities are the Arrived Private Credit Fund and EquityMultiple’s Basecamp Alpine Notes.
THE Private credit fund arrived simplifies investment in the short-term financing of real estate projects, by offering attractive returns guaranteed by quality residential real estate. With an annualized dividend target of 7-9%, quarterly liquidity and a diversified pool of real estate-backed loans, this fund is an excellent complement to stock investing.
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Base Camp Alpine Notes from EquityMultiple offers another powerful short-term cash management tool, with a target APY of 9.00% over a 3-month term and a minimum investment of just $1,000. These notes offer high liquidity and attractive rates with compound interest, making them an ideal choice for investors looking to build their income-generating portfolio. As a special offer, Basecamp Alpine Notes are exclusive to new investors on the EquityMultiple platform, providing new investors with a unique opportunity to take advantage of these favorable terms.
Click here for more details on Basecamp Alpine Notes.
In conclusion, although value stocks like Altria Group and Ares Capital Corporation offer sustainable yields above 7%, investors should also consider high-yielding alternative investments like the Arrived Private Credit Fund and EquityMultiple’s Basecamp Alpine Notes . By diversifying your portfolio with a combination of value stocks and alternative investments, you can create a more resilient and balanced approach to generating income in all market conditions.
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