Yuletide could mean yield time for investors. There are plenty of attractive stocks that offer high dividend yields and are ripe for the picking as we roll into the end of the year. Here are three high-yield dividend stocks to buy in December that especially stand out.
1. Ares Capital Corporation
Ares Capital Corporation (ARCC +1.42%) offers a juicy dividend yield of over 9.7%. The company has increased its dividend three times in 2022, with the most recent dividend hike being the biggest in Ares' history.
Granted, the dividend yield has been boosted a bit by Ares' share price falling somewhat this year. However, the stock is still handily outperforming the S&P 500.
NASDAQ: ARCC
Key Data Points
Ares Capital ranks as the biggest business development company (BDC) in the U.S., based on market cap. BDCs loan money to small- to medium-sized private businesses and sometimes invest in these businesses. As a BDC, Ares must return at least 90% of its taxable income to shareholders in the form of dividends. The company's streak of dividend increases is due to its solid core earnings growth.
Can Ares Capital continue to pay such an attractive dividend? CEO Kipp DeVeer thinks so. He stated in Ares' third-quarter conference call that the company expects to generate the current level of core earnings "under a variety of interest rate and economic scenarios for the foreseeable future."
2. Enterprise Products Partners
Enterprise Products Partners' (EPD +1.09%) dividend yield currently stands at nearly 7.7%. The midstream energy company boasts an impressive streak of 24 consecutive annual dividend increases.
Unlike Ares Capital, Enterprise's stock performance has held back its dividend yield a bit in 2022. Enterprise's share price is up by a double-digit percentage year to date, thanks in part to investors flocking to the energy sector.
NYSE: EPD
Key Data Points
The company's fortunes don't hinge on fuel prices, though. Enterprise's business model is similar to a toll road, collecting fees as natural gas, natural gas liquids, crude oil, and petrochemicals flow through its pipelines.
Management has plenty of skin in the game, owning around 32% of the master limited partnership's common units. This might help explain why Enterprise has generated an average return on invested capital of 12% over the last 10 years. With its consistency and strong financial position, this high-yield dividend stock looks like a no-brainer buy.
3. Medical Properties Trust
Medical Properties Trust (MPW 4.19%) (MPT) pays a dividend yield of 8.9% right now. The real estate investment trust (REIT) has increased its dividend for eight consecutive years.
The bad news for Medical Properties Trust is that its share price has crashed this year. This dismal performance is mainly due to financial challenges for the hospital operators that lease the REIT's facilities. One of MPT's tenants even filed for bankruptcy recently.
NYSE: MPW
Key Data Points
There's reason to be optimistic over the near term, though. MPT's tenants should benefit from higher Medicare reimbursements next year. They're also negotiating with other payers. MPT CEO Ed Aldag said in the company's Q3 call that those negotiations could result in reimbursement rates that are greater than Medicare's increases.
More importantly, MPT's long-term outlook remains positive. Wall Street's consensus 12-month price target for the stock reflects an upside potential of 32%. It's quite possible that the stock could double over the next five years if conditions improve for hospital operators.
