8 Dividend Monsters Rated Buy Or Better

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 |  Includes: ARCC, HTS, MFA, NLY, OZM, RNO, RRD, WIN
by: Insider Monkey

High-dividend stocks are great investment options; after all, dividends provide an income stream, and dividend stocks usually have capital gains over the long-term. The problem is that, for as many dividend yielding stocks that have strong dividends in addition to strong performance, there are just as many that have poor performance and are only offering the dividends to attract investors, never mind the small fortune lost just to get that 5% or 8% dividend yield. In other words, investors have to be careful when investing in high-dividend stocks.

One way to help vet dividend yielding stocks is to look at what the experts say. For instance, looking at stocks that have high dividends but also carry analyst recommendations of "buy" or better is a better strategy than relying on the dividend yield alone. Investors may also want to keep an eye on how the company is priced relative to its earnings - the lower the better.

The companies on this list answer on all accounts. They are large companies (over $2 billion market cap) with high dividends (over 8%) and have analyst recommendations of buy of better. They are also easy buys - all the stocks on this list are priced under $30 a share.

Ares Capital Corp. (NASDAQ:ARCC) is a diversified investments company with a $3.26 billion market cap. The company is priced at 10.24 times its forward earnings and pays a 9.07% dividend yield. Analysts give ARCC a recommendation of 1.6 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $16.00 a share. Bill Miller's Legg Mason Capital Management likes ARCC.

Hatteras Financial Corp. (NYSE:HTS) is a residential real-estate investment trust (REIT) with a $2.08 billion market cap. The company is priced at 7.29 times its forward earnings and pays a 13.28% dividend yield. Analysts give HTS a recommendation of 2.4 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $27.11 a share. Charles Clough's Clough Capital Partners is a fan of HTS.

MFA Financial, Inc. (NYSE:MFA) is a diversified real-estate investment trust (REIT) with a $2.48 billion market cap. The company is priced at 7.16 times its forward earnings and pays a 14.39% dividend yield. Analysts give MFA a recommendation of 2.2 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $6.94 a share. MFA is a favorite pick for Chuck Royce's Royce & Associates.

Annaly Capital Management, Inc. (NYSE:NLY) is a diversified real-estate investment trust (REIT) with a $15.92 billion market cap. The company is priced at 7.17 times its forward earnings and pays a 13.89% dividend yield. Analysts give NLY a recommendation of 2.4 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $16.26 a share. Bill Miller's Legg Mason Capital Management is bullish about NLY.

Och-Ziff Capital Management Group LLC (NYSE:OZM) is an asset management company with a $3.42 billion market cap. The company is priced at 7.87 times its forward earnings and pays a 11.42% dividend yield. Analysts give OZM a recommendation of 1.8 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $9.48 a share. Jim Simons' Renaissance Technologies likes OZM.

Rhino Resource Partners LP (NYSE:RNO) is a nonmetallic mineral mining company with a $3.44 billion market cap. The company is priced at 9.34 times its forward earnings and pays a 9.39% dividend yield. Analysts give RNO a recommendation of 2.5 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $20.59 a share. Charles Davidson's Wexford Capital is a fan of RNO.

R.R. Donnelley & Sons Co. (NASDAQ:RRD) is a business services company with a $2.28 billion market cap. The company is priced at 6.32 times its forward earnings and pays a 8.57% dividend yield. Analysts give RRD a recommendation of 2.2 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $11.82 a share. RRD is a favorite pick for Larry Robbin's Glenview Capital.

Windstream Corp. (NASDAQ:WIN) is a domestic telecom services company with a $6.28 billion market cap. The company is priced at 14.84 times its forward earnings and pays a 8.22% dividend yield. Analysts give WIN a recommendation of 2.4 on a scale in which 1.0 means "Strong Buy" and 5.0 means "Sell." It recently traded at $12.35 a share. Louis Bacon's Moore Global Investments is a fan of WIN.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.