Many people set goals for the upcoming year. If earning more passive income is one of yours for 2023, then you're in luck. 

A couple of contributors are recommending two dividend-paying stocks that can supercharge your passive income and put you on course to hit that goal in the coming year: W. P. Carey (WPC 2.13%) and AGNC Investment (AGNC 0.22%). These real estate investment trusts (REITs) offer big-time yields that generate healthy income streams. But that's not the only reason why they think these stocks are great buys for passive income in the new year. 

The easy way to receive rental income

Matt DiLallo (W. P. Carey): Investing in W. P. Carey allows you to collect passive income from real estate without the headaches of being a landlord. The REIT owns a diversified portfolio of properties that it leases to companies across the warehouse, industrial, office, retail, and self-storage sectors. These properties produce steady rental income backed by triple net leases that require tenants to cover the costs of maintenance, real estate taxes, and building insurance. That business model enables W. P. Carey to pay an attractive dividend that currently yields 5.36%. That's more than three times the 1.7% dividend yield on an S&P 500 index fund. 

As such, W. P. Carey provides investors with more passive income from every dollar they have invested. For example, assuming its payout stays the same, a $1,000 investment in the diversified REIT would generate about $53.60 of passive income in 2023. Meanwhile, that same amount invested in the S&P 500 would only produce about $17 of passive income.

And given its track record of steadily boosting its dividend payments, W. P. Carey's payout isn't likely to stay the same. The REIT's management team has given investors a raise almost every quarter for the past two decades, and has increased the payout each year since its initial public offering in 1998. 

That growth has been driven by the REIT's acquisitions and steadily rising rental income. Most of W. P. Carey's leases feature annual rental rate escalation clauses, and over half of those are tied to the inflation rate. With inflation hotter than it has been in decades, its rents are growing faster than usual. Meanwhile, the company has an excellent track record of making accretive acquisitions of income-producing properties. It invested a record $1.73 billion in expanding its portfolio in 2021 and was on track to spend between $1.5 billion and $2 billion buying properties in 2022.

With its big-time yield and solid growth prospects, W. P. Carey can give investors a nice passive income boost in 2023 and beyond.

A major headwind for AGNC is easing

Brent Nyitray (AGNC Investment): AGNC Investment is a mortgage REIT -- one that focuses on mortgage-backed securities guaranteed by the U.S. government. The past year has been brutal for the mortgage space as the Federal Reserve hiked interest rates at an unprecedented pace in its effort to fight high inflation. Mortgage rates spiked, home sales collapsed, and mortgage REITs suffered from increased interest rate volatility. 

However, investors are beginning to look again at mortgage REITs, especially since the declines in their share prices have given some of them simply massive dividend yields. AGNC, for example, now offers a 13.5% yield, and some mortgage REITs' yields are even higher.

Why are they so high? Well, a mortgage REIT is different from the typical REIT. It doesn't develop properties and lease them. Instead, it buys mortgages or mortgage-backed debt and collects the interest on that debt, so it behaves more like a bank than a classic REIT. 

There are different business models within this subclass. AGNC Investment focuses on agency mortgages, which are backed by the U.S. government. Other REITs focus on mortgages that lack that federal guarantee, but pay higher interest rates. Still others focus on mortgage servicing. 

Because AGNC's portfolio consists largely of government-guaranteed mortgages, it will be better insulated against a possible recession than mortgage REITs that invest heavily in loans without those guarantees. Over the past year, the incremental interest that mortgage-backed security investors have required over the rates paid by U.S. Treasury bonds (the spread) has increased to levels last seen during the 2008 mortgage meltdown. This means that mortgage-backed securities are exceptionally cheap relative to Treasuries. Over the past year, this has meant decreases in book value. However, prices for mortgage-backed securities are reverting back to historical levels, so their spreads are about to go from being headwinds to being tailwinds.