Want Over $21,000 per Year in Reliable Passive Income? Invest $25,000 in These 6 Stocks

Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence. The more passive income can help cover rising costs like mortgages, insurance, taxes, and other expenses, the easier it is for investors to put away money for future needs as they prepare for retirement. Dependable recurring dividends from quality, high-yield stocks are a recipe for success.

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade or business in which the individual does not materially participate. It can also include income from limited partnerships and other similar enterprises where the individual is not actively involved. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises.

Our 24/7 Wall St. passive income stock research database is a reliable source of the best passive income investment ideas. We have identified six ultra-high-yield stocks that pay investors their dividends every quarter. Investing $25,000 in each, for a total of $150,000, will pay out over $21,000 per year in passive income. As a caveat, these stocks are much better suited for those with much higher risk tolerance, but all make sense for growth and income investors looking to increase total return.

Why do we cover ultra-high-yield stocks?

While only suited for some, those trying to build passive solid income streams can do exceptionally well having some of these top companies in their portfolios. Paired with more conservative blue-chip dividend giants, investors can use a barbell approach to get passive income streams that make a significant difference.

Blackrock TCP Capital

Run by arguably the biggest money manager in the world, this company pays a giant 14.56% dividend. Blackrock TCP Capital Corp. (NASDAQ: TCPC)  is a business development company specializing in direct equity and debt investments in:

• Middle-market, small businesses
• Debt securities
• Senior secured loans, junior loans, originated loans
• Mezzanine
• Senior debt instruments
• Bonds and secondary-market investments

It typically invests in:

• Communication services
• Public relations services
• Television
• Wireless telecommunication services
• Apparel, textile mills
• Restaurants, retailing
• Energy, oil, and gas extraction

The company also prefers to invest in:

• Patent owners and lessors
• Federal and federally sponsored credit agencies
• Insurance, hospital, and healthcare centers
• Biotechnology
• Engineering services
• Heavy electrical equipment
• Tax accounting
• Scientific and related consulting services
• Charter freight air transportation
• Information technology consulting, application hosting services, software diagram and design, computer-aided design, communication equipment, electronics manufacturing equipment, computer components
• Chemicals

It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million, including complex situations. It prefers to make equity investments in companies for an ownership stake.

Investing $25,000 at recent trading levels would buy 2,780 shares. Paying $1.36 per year in dividends will produce $3,782 in income.

FS KKR

This well-known name on Wall Street offers a solid entry point at current levels and pays a massive 12.23% dividend. FS KKR Capital Corp. (NASDAQ: FSK) is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments.

The company also seeks to invest in:

• First-lien senior secured loans
• Second-lien secured loans
• Subordinated loans
• Mezzanine loans

The firm also receives equity interests, such as warrants or options, in connection with debt investments for additional consideration. It seeks to purchase minority interests in common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor.

The fund may invest in corporate bonds and similar debt securities opportunistically.

The fund does not seek to invest in start-ups, turnaround situations, or companies with speculative business plans. It aims to invest in small and middle-market companies in the United States.

FS KKR seeks to invest in firms with annual revenue between $10 million and $2.5 billion. It aims to exit from securities by selling them in a privately negotiated over-the-counter market.

Investing $25,000 would purchase 1,110 shares at current prices. Paying $2.80 per year in dividends will generate $3,100 in income.

Mach Natural Resources

This 2023 IPO is trading below the initial public offering price. Mach Natural Resources L.P. (NYSE: MNR) recently conducted a secondary offering to purchase even more producing assets and pays a strong 12.% dividend.

Mach Natural Resources is an independent upstream oil and gas company focused on acquiring, developing, and producing oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, southern Kansas, and the Texas panhandle.

The analysts at Raymond James noted that Mach is led by Tom Ward, co-founder of Chesapeake Energy. Mach is another entrant into the E&P MLP space. It is a pure-play operator in the Anadarko Basin, leveraging its strong position (1 million net acres) to become the primary consolidator in the region.

Mach’s midstream position and lower base decline (~20%) allow the company to target a lower reinvestment rate (~30%) relative to the overall industry. In addition, it is one of the only exploration and production companies organized as a limited partnership as it is an oil and gas producer.

At current levels, $25,000 would buy 1,640 shares. Paying out $2.00 per share yearly in dividends would bring the total to $3,280.

TXO Partners

With a massive 11.80% dividend and trading at a solid entry point, TXO Partners L.P. (NYSE: TXO) is a bargain at current levels. The oil and natural gas company focuses on acquiring, developing, optimizing, and exploiting North America’s conventional oil, natural gas, and natural gas liquid reserves.

Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado.

In the summer of 2024, Bob Simpson, the company’s board chair and CEO, made a statement by purchasing 100,000 company shares.

Trading at a ridiculously cheap 9.5 times estimated 2025 earnings, the stock is a passive income winner and is a potential total return grand slam.

A $25,000 investment would purchase 1,370 shares of the company. At $2.38 per share, this would deliver $3,050 in passive income each year.

Invesco Mortgage Capital

Run by one of the nation’s largest and most respected money managers and yielding a staggering 18.10% dividend, Invesco Mortgage Capital Inc. (NYSE: IVR) may be a higher-risk play that’s worth the gamble. The company is focused on investing in, financing, and managing mortgage-backed securities (MBS) and other mortgage-related assets.

Its objective is to provide attractive risk-adjusted returns to its stockholders through dividends and capital appreciation.

Invesco Mortgage Capital invests in residential mortgage-backed securities (RMBS) that are guaranteed by a United States government agency, such as:

• The Government National Mortgage Association (Ginnie Mae)
• The federally chartered corporation, such as the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (Agency RMBS)

It also invests in commercial mortgage-backed securities (CMBS) and RMBS not guaranteed by a United States government agency or a federally chartered corporation, as well as commercial mortgage loans, TBAs, and other real estate-related investments. It conducts its business through its subsidiary, IAS Operating Partnership.

Investing $25,000 would buy 2,830 shares. Paying $1.60 per share would yield $4,530 in passive income.

Oxford Square Capital

This company pays a massive 15.22% dividend, which could result in a substantial total return home run if the stock moves higher. Oxford Square Capital Corp. (NASDAQ: OXSQ) is a business development company that operates as a closed-end, non-diversified management investment company.

It is a private equity and mezzanine firm.

The firm invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock, and syndicated bank loans.

Oxford Square Capital primarily invests in debt and/or equity securities of technology-related companies that operate in:

• Computer software
• Internet
• Information technology infrastructure and services
• Media
• Telecommunications and telecommunications equipment
• Semiconductors
• Hardware
• Technology-enabled services
• Semiconductor capital equipment
• Medical device technology
• Diversified technology
• Networking systems sectors

Investing $25,000 would buy 2,830 shares. Paying $1.44 per share would pay out $4,075 in passive income.

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