MHI Hospitality (Nasdaq: MDH) ($5.96) is the limited partner of an operating company that owns a small chain of upscale and mid-scale hotels and motels in the Mid-Atlantic, Midwest, and Southeastern United States.

MHI has paid a dividend of $0.17 per quarter since early 2005. With an annual dividend of $0.68 per year, the company is yielding nearly 11.4% at current prices.

Founded in 1992, Omega Healthcare Investors (NYSE: OHI) manages a $1.3 billion portfolio of over 200 hospitals and nursing homes in diverse locations across 28 states. The company leases the properties to established healthcare operators like Sun Healthcare (Nasdaq: SUNH), CommuniCare Health Services, and Advocat (Nasdaq: AVCA).

Under sales/leaseback agreements with these tenants, Omega purchases their properties, then leases them back under long-term contracts. It finances the purchases with a revolving loan or by raising money through issuing debt or equity. The company also holds fixed-rate mortgages on several of its facilities.

As the name suggests, these preferred shares are backed by real estate income trust [REIT] Realty Income (NYSE: O-PD) (NYSE:O). You won't easily find a more dividend-friendly company -- the corporate website even greets you with the slogan: "Welcome to the Monthly Dividend Company."

The Global High Income Fund (NYSE: GHI) is one of the highest-yielding closed-end funds that doesn't use leverage to lift returns. In other words, the fund does not borrow or issue preferred shares to create extra money to invest, giving it an important element of safety in volatile markets.

The Western Asset/Claymore Inflation-Linked Securities Fund (NYSE: WIA) is built to weather stormy markets. Whether the tailwinds are credit writedowns, inflation fears, a slumping dollar, or interest rate surprises, this fund has it covered.

A state-owned monopoly until 1994, Magyar Telekom (NYSE: MTA) ($27.38) is now Hungary's largest full-service provider of telecommunication services. It carries local and long-distance phone services, Internet-based television, high-speed Internet, cell phone, and wireless data services.

Citigroup ELKS linked to Nucor (AMEX: ENQ) ($9.79) are a stock/bond hybrid issued by Citigroup (NYSE: C) that tracks steel maker Nucor (NYSE: NUE).

ENQ first started trading on October 24, 2007 at $10 a share and will mature on November 6, 2008. Over the life of the security, ENQ will pay total distributions of $1.1306, for a yield of 11.5% ($1.1306/$9.79). This payout consists of $0.4798 in interest income and $0.6598 in option premium. Payments will be doled out in May 2008, as well as when ENQ matures in November 2008.

Windstream (NYSE: WIN) debuted in July 2006 when wireless service provider Alltel (NYSE: AT) spun off its traditional phone-line business and combined those assets with privately owned Valor Communications.

A member of the prestigious S&P 500 Index, Windstream is currently the largest telecommunications company in the United States focused on rural customers. The firm operates in 16 states, focusing mainly on deep southern states such as Alabama and Georgia, but also operates as far west as New Mexico and as far north as New York.

The Nicholas-Applegate Convertible & Income Fund's (NYSE: NCV) $1.5 billion portfolio is divvied up between convertible bonds (54%), high-yield bonds (44%), and cash (2%). An average credit quality of BB- puts the portfolio one rung below investment grade, although roughly a third of its assets rank as investment grade.

Top holdings include a $34 million stake in a high-quality, Triple A-rated convertible bond issued by smokeless tobacco and wine maker UST (NYSE: UST), a $25 million position in the convertible preferred shares of power generator NRG Energy (NYSE: NRG), and another $25 million holding in an investment-grade convertible of Canadian insurance giant Fortis [TSX: FTS-UN.TO].

Centerline Holding (NYSE: CHC) ($13.81) is a 34-year-old real estate finance company, formerly known as CharterMac. CHC is involved in a multitude of financial businesses. The firm lends, invests, and manages capital, with a focus on the commercial real estate market.

Among its activities, CHC buys tax-exempt first mortgage bonds issued by local governments and agencies, manages a variety of funds that invest in mortgage-backed securities, and underwrites multi-family mortgage loans for building developers.

Dividend: Valero L.P. has increased its quarterly dividend an average +9% a year since initiating dividends in 2001. Its latest quarterly dividend of $0.915 translates to $3.66 per share annually, giving VLI a generous 5.6% yield at current share prices. The company pays out 87% of its distributable cash flow in dividends, giving it enough room to boost its dividends further in the coming years. Management has committed to hiking the distribution another +7% this year. Valero doesn't offer a dividend reinvestment plan.

Growth Drivers: Over the past five years since its inception, Valero has invested $3.6 billion in acquisitions, including the $2.9 billion Kaneb purchase. This acquisition provided Valero with a large inventory of expansion projects that should drive growth and increase distributions over the next few years. The 2007 planned expansion budget of $185 million is the largest in the company's history and will increase the firm's storage and distribution capacity in its fee-based terminal business. Tariff increases in line with inflation will also contribute to growth. Despite the company's rapid growth, it maintains a strong balance sheet with a debt to total capitalization figure of just 42%.

Based on the latest quarterly dividend of $0.55 per share, which annualizes to $2.20, the stock yields about 6.0%. The company distributes most of its cash flow to shareholders, although it isn't required to do so. Management said it expects the entire dividend to qualify for the reduced tax rate of up to 15%.

With $37.9 million in free cash flow and $27.1 million in dividend payouts over the past 12 months, the company has a conservative payout ratio of 72%.

The simple answer is "yes." By adding to the number of shares outstanding, a rights offering will dilute the value of the holdings of existing shareholders. But it's important to take a closer look at the rights offering to see what strategies the company has put in place to offset the potential dilution.

The fund writes call options on over half of the stocks in its portfolio and generally doesn't sell puts. It's well positioned to benefit from a rising stock market -- since it writes calls on just a portion of its portfolio, it can enjoy capital gains on the remaining stocks. Since covered calls rely on volatility to generate income, the fund has invested about 60% of its portfolio in mid-cap stocks, which tend to exhibit greater price volatility than large-cap stocks.

Dividend

The problem - what goes up must come down. Since the housing boom has faded, investors now worry that default rates will increase, the firm's loan base will dry up, and profits will suffer. New Century's share price, which is now trading near its 52-week lows, reflects these concerns.

No doubt the mortgage-lending market won't be as easy in 2007 as it was this past year, but many of the challenges ahead may be baked into New Century's share price.

Snapshot: Over half of this fund's portfolio is in risk-free U.S. Treasuries. The balance is mostly in blue-chip dividend-payers like pharmaceutical giant Bristol-Myers (BMY) and chemical maker Dow Chemical (DOW). The bonds carry the highest credit rating possible with virtually no risk of default. They have an average duration of about six years, making the fund well positioned for a stable interest rate environment.

Dividend: The fund has paid dividends every month for the past two decades. Its latest monthly payment of $0.043 a share equates to $0.52 annually, providing a 9.3% yield at today's share price. A 1.02% management fee brings the effective yield to 8.3%.

If the government's draft legislation is not enacted and management goes ahead with the conversion, then BCE will yield about 10% based on planned annual cash distributions of $2.55 per trust unit. If the conversion doesn't go ahead, then the stock will still pay a healthy 4.8% dividend, based on a $1.17 annual payout per unit over the past year. Either way, the stock is worth a second look.

BCE is the equivalent of say, AT&T (T) without the crowded playing field. BCE dominates the fixed-line phone service in eastern Canada, is the second-largest wireless carrier in the country after Rogers Communications and is the number one satellite TV provider in Canada. To ward off potential competition from wireless and cable, BCE is rapidly converting its fixed phone lines to high-speed Internet protocol and has joined forces with wireless provider Virgin Mobile. So far, it has been able to get 60% of its existing customers in the eastern provinces to bundle two or more services.

AGD pays monthly dividends of $0.15, which equate to $1.80 a year and give the fund a current yield of 8.4%. The fund is expected to charge an annual management fee of around 1.3%, which will reduce the effective yield by the same amount.

In fact, the fund currently has a portfolio of some 147 holdings with an average yield of about 5.8%. A somewhat modest management fee of 0.6% takes a bite out of that yield.

The current rally has been driven by a recent surge in tanker rates for Frontline's very large crude carriers (VLCCs). Tanker companies like Frontline lease out their ships to major oil firms in exchange for a daily rental rate. During the months of July and August, these rates ran about +50% higher than last year, according to the company. In fact, rates for July and August topped out at about $80,000 per day. And going forward, the best might be yet to come, as the fourth quarter is generally the strongest for tanker firms. That's when oil demand increases as refineries rebuild their inventories for the winter.