With thousands of publicly traded companies and exchange-traded funds to choose from, Wall Street gives investors no shortage of ways to grow their wealth. But among these countless ways investors can rearrange the puzzle pieces to generate profits, few have been more successful over the long run than buying and holding high-quality dividend stocks.
Companies that pay a continuous dividend are almost always profitable on a recurring basis and have demonstrated their ability to navigate challenging economic climates. Best of all, these are companies that tend to outperform.
In "The Power of Dividends: Past, Present, and Future," analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance and relative volatility of dividend stocks to non-payers over 51 years (1973-2024). Their analysis found that income stocks more than doubled the annualized return of the non-payers (9.2% versus 4.31%) while being notably less volatile.
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But this doesn't mean you can throw a dart at a financial newspaper and land a winner. No two dividend stocks are alike, with ultra-high-yield stocks -- those with yields four or more times greater than the average yield of the S&P 500 -- carrying added risk.
The good news is that ultra-high-yield gems can be unearthed, with proper vetting.
Even amid a historically pricey market, the following three ultra-high-yield dividend stocks -- sporting an average yield of 7.97% -- stand out as screaming buys in February.
Sirius XM Holdings: 5.31% yield
The first supercharged dividend stock that's ripe for the picking by opportunistic income seekers is satellite-radio operator Sirius XM Holdings (SIRI 0.56%). Sirius XM's depressed share price has lifted its yield to approximately 5.3%, which is a stone's throw away from its all-time high of about 5.5% that was set last year.
The primary lure of Sirius XM's operating model is that it's one of America's few publicly traded legal monopolies (outside of the utility sector). Although it's still fighting for listeners with terrestrial and online radio providers, it's the only company that has satellite radio licenses. This distinction should afford Sirius XM reasonably strong subscription pricing power.
NASDAQ: SIRI
Key Data Points
But its legal monopoly status may not be its biggest competitive edge. Instead, the company's revenue mix is, arguably, its No. 1 selling point.
Whereas most traditional radio operators rely almost exclusively on advertising to generate their revenue, Sirius XM generated just 20% of its net sales from ads through the first nine months of 2025. More than three-quarters of its net revenue comes from subscriptions. While ad-driven radio models benefit from disproportionately long periods of economic growth, recessions can be problematic. This isn't the case for Sirius XM, given that its subscribers are less likely to cancel their service than businesses are to pare back their marketing budgets.
In addition to subscriptions driving predictable operating cash flow, Sirius XM's transmission and equipment expenses are relatively fixed. In other words, if the company adds more subscribers, these expense categories don't proportionately increase.
Opportunistic investors can purchase shares of Sirius XM right now for just 6.6 times forward-year earnings, representing a 46% discount to its average forward price-to-earnings (P/E) ratio since 2020.
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The Campbell's Company: 5.58% yield
A second high-octane dividend stock that's begging to be bought in February is food and beverages behemoth, The Campbell's Company (CPB 5.60%). With shares recently hitting their lowest mark since May 2009, Campbell's dividend yield has surged to an all-time high.
The Campbell's Company's wavering share price can be explained by two headwinds, neither of which is a long-term issue. To begin with, President Donald Trump's steel tariffs are weighing on the margins of companies that primarily package their food products in steel-alloy cans. Campbell's can either eat these tariffs or risk angering its customers by passing along these higher costs. These tariff costs shouldn't be a shock to margins beyond 2025.
The other issue has been generalized weakness in snack products. But this is a temporary weakness that's been observed throughout the food and beverage industry and isn't unique to Campbell's.
While the company has been on the defensive in some aspects over the past year, it's also been aggressively transforming its operations to accelerate its organic growth. One of the ways Campbell's aims to boost its growth potential is through acquisitions -- specifically in the snack segment. For example, it acquired Sovos Brands for $2.7 billion in March 2024, bringing Rao's pasta sauce and Michael Angelo's frozen foods brands under its umbrella.
NASDAQ: CPB
Key Data Points
The Campbell's Company is also activity looking for ways to make its operations more efficient. This includes modernizing and/or combining existing production facilities.
Although Campbell's sustainable organic growth rate isn't likely to move much beyond 2% to 3% annually, a forward P/E of 10.8 is a screaming bargain (and a 25% discount to its average trailing five-year P/E ratio) for a company with brand-name appeal that provides basic necessity food and beverages.
PennantPark Floating Rate Capital: 13.03% yield
The third ultra-high-yield dividend stock that makes for a screaming bargain in February is an under-the-radar business development company (BDC) that pays its shareholders monthly. Say hello to PennantPark Floating Rate Capital (PFLT 1.11%) and its 13% (not a typo!) dividend yield.
A BDC is a type of company that invests in the equity (common or preferred stock) or debt of generally unproven businesses, known as middle-market companies. While PennantPark ended its fiscal year (Sept. 30, 2025) with $240.7 million in common and preferred stock equity, nearly 87% of its investment portfolio consists of debt securities.
NYSE: PFLT
Key Data Points
The beauty of being a lender has everything to do with yield. Small, unproven businesses typically lack access to traditional financial services, such as loans and lines of credit. With borrowing options limited for middle-market companies, PennantPark is able to provide financing at an above-average rate. As of the end of September, PennantPark had a weighted-average yield on its debt investments of 10.2%.
Another factor that makes PennantPark's lending portfolio so attractive is that approximately 99% of its $2.53 billion in outstanding debt is variable rate. When the Federal Reserve aggressively increased interest rates from March 2022 to July 2023 to curb a four-decade-high inflation rate, PennantPark's weighted-average yield on debt investments jumped 520 basis points. Even though the nation's central bank is currently in a rate-easing cycle, its slow-stepped approach is affording PennantPark ample opportunity to net an above-average yield on its loans.
The company has also done an exceptional job of vetting its borrowers and protecting its invested principal. Only 0.4% of its investment portfolio, on a cost basis, was on non-accrual (i.e., delinquent) at the end of fiscal 2025. What's more, over 99% of its loan portfolio is comprised of first-lien secured debt. First-lien secured noteholders are first in line for repayment in the event that one of its borrowers declares bankruptcy.
The final piece of the puzzle is PennantPark Floating Rate Capital's valuation. BDCs commonly trade very close to their listed book value per share. As of the closing bell on Jan. 30, PennantPark was valued at a 13% discount to its book value.
