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10 Russell 2000 Stocks with High Dividend Yields

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·10 min read
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In this article, we will be taking a look at 10 Russell 2000 stocks with high dividend yields. To skip our detailed analysis of these stocks, you can go directly to see the 5 Russell 2000 Stocks with High Dividend Yields.

The Russell 2000 Index consists of the smallest 2,000 stocks in the Russell 3000 Index, and is thus referred to as a small-cap stock market index. It was established by the Frank Russell Company and is maintained by FTSE Russell, containing about 2,035 constituents as of January 2021. For investors looking to invest in small-cap stocks, the Russell 2000 Index can thus serve as a very useful and unique benchmark as compared to other indexes like the S&P 500 which focuses mainly on large-cap stocks. And while more established large-cap stocks like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR) are by no means bad investment options, come 2021, investor circles began witnessing the slow but steady rise of small-cap stocks and the Russell 2000 Index in the face of, for instance, the S&P 500.

To back up the above claim, it has been reported by the Wall Street Journal that as of February 2021, investors have been more prone to pour money into smaller companies and cyclical stocks. This reality is one unseen in at least the last two decades, with investor confidence in the recovering economy and willingness to continue betting on small-cap stocks rising in light of vaccination distribution rates rising. As of this February, the Russell 2000 Index jumped by about 15%, for instance, setting 10 closing records at least until that point of the year and far surpassing the S&P 500 with its 4% rise. Another reason for smaller stocks managing to outperform their large-cap counterparts at least as far as this February, was also hinted to be investor expectations that the Biden administration would be offering greater fiscal spending.

As such, companies within the Russell 2000 Index have been gaining so far this year. An example is Plug Power Inc. (NASDAQ: PLUG), a hydrogen fuel-cell company. This stock, along with a couple others on the small-cap index, managed to gain at least 35% by February 2021. It has also performed impressively in the second quarter of 2021, reporting a revenue of 124.56 million, up 82.98% year over year and beating estimates by about $13.35 million, for instance. As the year thus progresses, small-cap stocks and the Russell 2000 Index manage to gain more investor confidence and hence have more money poured into them.

Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

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Let's now look at the 10 Russell 2000 stocks with high dividend yields.

Our Methodology

Insider Monkey tracks the hedge fund data of about 866 hedge funds. We have used this data to pick Russell 2000 stocks that not only have dividend yields of over 9%, but also fall in the category of the most popular stocks among hedge funds today. The stocks on our list have been ranked from the lowest to the highest dividend yield, and have their yields and hedge fund holders mentioned below. We also took care to include stocks with mostly positive analysts' ratings and robust fundamentals demonstrating business strengths and financial stability.

Russell 2000 Stocks with High Dividend Yields

10. Capstead Mortgage Corporation (NYSE: CMO)

Number of Hedge Fund Holders: 8 Dividend Yield: 9.1%

Capstead Mortgage Corporation (NYSE: CMO), a US-based REIT, invests in residential mortgage pass-through securities. The company ranks 10th on our list of Russell 2000 stocks with high dividend yields and is headquartered in Dallas, Texas.

This July, Capstead Mortgage Corporation (NYSE: CMO) entered into a merger agreement with Benefit Street Partners Realty Trust, offering stockholders a cash payment of 15.75% premium to Capstead Mortgage Corporation (NYSE: CMO) diluted BV/share before the two companies become merged into the new Franklin BSP Realty Trust. The new merged company is set to become the fourth-largest commercial mortgage REIT, as it will have about $2 billion of pro forma equity common stock trading on the New York Stock Exchange.

In the second quarter of 2021, Capstead Mortgage Corporation (NYSE: CMO) had an FFO of $0.09, missing estimates by $0.06. The company’s revenue was $16.06 million, also missing estimates by $9.74 million. Capstead Mortgage Corporation (NYSE: CMO) has also gained 11.11% in the past 6 months and 14.29% year to date.

By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in Capstead Mortgage Corporation (NYSE: CMO) worth roughly $52.2 million. This is compared to 14 hedge funds in the previous quarter with a total stake value of approximately $54.6 million.

Like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR), Capstead Mortgage Corporation (NYSE: CMO) is a good stock to invest in.

9. Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI)

Number of Hedge Fund Holders: 11 Dividend Yield: 9.3%

Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is another REIT, and originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings and a range of other commercial real-estate debt investments. The company ranks 9th on our list of Russell 2000 stocks with high dividend yields and operates primarily in the US.

Timothy Hayes, an analyst at BTIG, began covering stocks of Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) this February. The analyst holds a Neutral rating on the shares.

In the second quarter of 2021, Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) had an FFO of $0.27, missing estimates by $0.09. The company’s revenue was $74.48 million, up 5.27% year over year and beat estimates by $5.17 million. Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) has also gained 20.72% in the past 6 months and 42.28% year to date.

By the end of the first quarter of 2021, 11 hedge funds out of the 866 tracked by Insider Monkey held stakes in Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) worth roughly $44.2 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $48.4 million.

Like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR), Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a good stock to invest in.

8. New York Mortgage Trust, Inc. (NASDAQ: NYMT)

Number of Hedge Fund Holders: 12 Dividend Yield: 9.4%

New York Mortgage Trust, Inc. (NASDAQ: NYMT) works to acquire, invest in, finance, and manage mortgage-related single-family and multi-family residential assets mainly in the US. the company ranks 8th on our list of Russell 2000 stocks with high dividend yields.

As of this May, B. Riley analyst Matt Howlett holds a Buy rating on shares of New York Mortgage Trust, Inc. (NASDAQ: NYMT). The analyst also set a $6 price target on the stock, commenting that New York Mortgage Trust, Inc. (NASDAQ: NYMT) has a 40% potential total return profile on the basis of his dividend forecast and expected price appreciation.

In the second quarter of 2021, New York Mortgage Trust, Inc. (NASDAQ: NYMT) had an FFO of $0.11, in line with estimates. The company’s revenue was $31.48 million, up 10.34% year over year and beat the previous quarter's revenue of $30.34 million. New York Mortgage Trust, Inc. (NASDAQ: NYMT) has also gained 8.21% in the past 6 months and 20.83% year to date.

By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in New York Mortgage Trust, Inc. (NASDAQ: NYMT) worth roughly $29.1 million. This is compared to 19 hedge funds in the previous quarter with a total stake value of approximately $35.6 million.

Like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR), New York Mortgage Trust, Inc. (NASDAQ: NYMT) is a good stock to invest in.

7. Invesco Mortgage Capital Inc. (NYSE: IVR)

Number of Hedge Fund Holders: 14 Dividend Yield: 9.6%

Invesco Mortgage Capital Inc. (NYSE: IVR), an REIT specializing in investing in, financing, and managing mortgage-backed securities (MBS) and other assets related to the area, is next on our list of Russell 2000 stocks with high dividend yields. The company ranks 7th and is based in Atlanta, Georgia.

Eric Hagen, an analyst at BTIG, is covering shares of Invesco Mortgage Capital Inc. (NYSE: IVR) with a Neutral rating.

In the second quarter of 2021, Invesco Mortgage Capital Inc. (NYSE: IVR) had an FFO of $0.10, beating estimates by $0.01. The company’s revenue was $46.33 million, up 55.83% year over year and also beating estimates by $4.27 million.

By the end of the first quarter of 2021, 14 hedge funds out of the 866 tracked by Insider Monkey held stakes in Invesco Mortgage Capital Inc. (NYSE: IVR) worth roughly $57.7 million. This is compared to 12 hedge funds in the previous quarter with a total stake value of approximately $30.9 million.

Like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR), Invesco Mortgage Capital Inc. (NYSE: IVR) is a good stock to invest in.

6. PennyMac Mortgage Investment Trust (NYSE: PMT)

Number of Hedge Fund Holders: 8 Dividend Yield: 9.9%

PennyMac Mortgage Investment Trust (NYSE: PMT) is a specialty finance company investing in mortgage-related assets in the US. The company ranks 6th on our list of Russell 2000 stocks with high dividend yields and operates through its Credit Sensitive Strategies, Interest Rate Sensitive Strategies, and Correspondent Production segments.

This June, Mark DeVries, an analyst at Barclays, raised his price target on shares of PennyMac Mortgage Investment Trust (NYSE: PMT). The new price target on the stock is $19, with DeVries also reiterating an Equal Weight rating on the shares.

In the second quarter of 2021, PennyMac Mortgage Investment Trust (NYSE: PMT) had an FFO of $0.32, missing estimates by $0.27. The company’s revenue was $121.57 million, also missing estimates by $49.98 million. PennyMac Mortgage Investment Trust (NYSE: PMT) has however gained 1.35% in the past 6 months and 10.20% year to date.

By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in PennyMac Mortgage Investment Trust (NYSE: PMT) worth roughly $15.7 million. This is compared to 15 hedge funds in the previous quarter with a total stake value of approximately $71.8 million.

Like Netflix, Inc. (NASDAQ: NFLX), Alibaba Group Holding Limited (NYSE: BABA), Micron Technology, Inc. (NASDAQ: MU), and Twitter, Inc. (NYSE: TWTR), PennyMac Mortgage Investment Trust (NYSE: PMT) is a good stock to invest in.

Click to continue reading and see the 5 Russell 2000 Stocks with High Dividend Yields.

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Disclosure: None. 10 Russell 2000 Stocks with High Dividend Yields is originally published on Insider Monkey.