There's usually a bright side to any bad story. We're definitely seeing a bad story unfold this year with the major stock indexes in a bear market. However, the good news amid all the negatives is that investors can find great stocks with especially attractive dividend yields. Here are three ultra-high-yield dividend stocks to buy in October.
1. Medical Properties Trust
Medical Properties Trust (MPW 7.25%) (MPT) offers a sky-high dividend yield of nearly 9.3%. The hospital real estate investment trust (REIT) has increased its dividend for eight consecutive years. MPT appears to be in a good position to keep this streak going with a dividend payout ratio of 57%.
MPT's dividend yield has always been relatively high. However, it's in the stratosphere these days mainly because the REIT stock has plummeted around 50% so far this year.
One reason behind this dismal performance is that interest rates have risen. This makes it more expensive for MPT to borrow money to buy additional properties. Another reason is that investors are concerned about the financial stability of some of the company's key tenants, especially Steward.
However, Steward's business appears to be improving. MPT continues to grow in a challenging macro environment. It remains strong financially. The REIT is expanding even with higher interest rates. The stock might not take off anytime soon; over the long term, though, MPT should deliver excellent total returns.
2. Omega Healthcare Investors
Omega Healthcare Investors (OHI 0.35%) is another healthcare REIT that income investors should check out. The company owns properties that it leases to skilled nursing facility (SNF) operators. Its dividend yield stands at 8.9%.
Unlike most stocks, Omega has performed pretty well so far in 2022, relatively speaking. Although its shares are down a little year to date, the stock is handily beating the S&P 500. With its dividend payments, Omega's total return isn't too shabby.
To be sure, Omega faces some challenges. In the second quarter of 2022, a few of the company's tenants weren't able to pay their rents. SNF operators are struggling with higher expenses and lingering effects of the COVID-19 pandemic.
But Omega's position in the industry remains strong. Its long-term prospects should improve significantly as aging baby boomers drive increased demand for skilled nursing facilities. The SNF industry could be at the beginning of a tailwind that should continue for at least 20 years. Omega is poised to be one of the biggest winners.
3. Enterprise Products Partners
Healthcare REITs aren't the only area where you can find ultra-high dividend yields. Enterprise Products Partners (EPD 0.80%) is a leading midstream energy company that offers a dividend yield of a little over 8%. The company has increased its dividend for 24 consecutive years.
The stock has performed quite well in 2022, thanks to favorable industry dynamics. Enterprise's share price has jumped nearly 10% so far this year and was up as much as 29% year to date at its peak in early June.
One key downside to investing in Enterprise Products Partners is that it's organized as a master limited partnership (MLP). There are some tax hassles associated with MLPs. Some investors could also be concerned about the long-term prospects for the fossil fuels that Enterprise's pipelines transport and its facilities process.
However, the income and total returns that Enterprise offers should be more than enough to offset more complicated taxes for many investors. The demand for natural gas and other fossil fuels is likely to increase rather than decrease over the next few decades. This ultra-high-yield stock is definitely one that shouldn't be overlooked.