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Starwood Property: “No Drama” Yield

The stock is offering an 8.5% dividend yield, but likely nothing else.

Image via Travelarz/Wikimedia

I think of Starwood Property Trust (STWD) as one of the most “no drama” high-yield stocks on our recommendations list, suggests income expert Tim Plaehn, editor of The Dividend Hunter.

With STWD, you have a very well and conservatively managed company. In my opinion, the market does not give enough credit to the conservative nature of Starwood’s portfolio and balance sheet, but that does let us earn an 8.5% yield on the shares.

The business is like a cash generating machine quarter after quarter. As one of the largest finance REITs, the STWD share price is most affected by investor sentiment towards the finance REIT sector and the resulting buying and selling of the ETFs which cover the sector.

Starwood Property is a stock you pick up for the 8.5% dividend income stream and do not expect much from the share price movement.

We’re looking for the cash income from this anyhow, so the rock-solid 8% dividend and stable share price is a huge reason why I love this stock.

It is good to buy when you have some extra cash that you would like to put to work. Buy STWD up to $24.00 per share to lock in a long-term 8% plus yield.

Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley and editor of The Dividend Hunter,

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