With the markets still in limbo many investors have started to consider higher dividend-paying stocks as an alternative to elevate possible future downward pressure.

Dividend stocks are a superb choice for investors looking for passive income. When companies make good profits, they can have the option to distribute their profits to investors in the form of dividends. Just like property investing, it’s important to pick the right stock at the right price which has a track record of payments. With the markets still in limbo many investors have started to consider higher dividend-paying stocks as an alternative to elevate possible downward pressure in the future. However, the choice of ‘high paying’ stocks is abundant and picking the right one is important as you wouldn’t want to pick a high paying stock which historically goes down in value as it would offset any possible gains.

That’s why we’ve analysed 5 different shares that pay 5% or more but have also proved to hold somewhat resilient over the past few years despite the market turmoil.

Realty Income (NYSE: O) – 4.87%

Exposure to property is great and realty income is no exception to this. Found in 1969 and floated on the NYSE in 1994, realty income has been a consistent monthly dividend payer with continuous growth. As far as REITs go this stock knows the market well with over 12,200 leases across the USA, Europe, and the Caribbean. Unlike other companies that offer high-paying dividends, capital appreciation is consistent as well. Over a 5-year period, the stock itself has risen around 24% with an average payout of between 4-5% annually.

Realty Income chart showing gains since 1994

Glencore (LON: GLEN) – Dividend 6.61%

Mining is crucial in such a modern world. Renewable energies require an abundance of natural resources which Glencore can provide, like Copper, Nickel, Zinc, Lead, Coal & Oil.  Forecasting on Glencore is difficult with actual capital appreciation as it requires looking at demand for specific materials. While this dividend is great, it's not consistent and in previous years Glencore hasn’t paid any dividends at all, however, given the recent boom in EVs and renewables Glencore is going to be needed more than ever so from 2024 through to 2030 we do see a consistent dividend with some capital appreciation growth because of demand. With the stock currently priced at £4.74 and an annual dividend at 6.61%, the outlook remains positive even if the dividend drops as the 5-year return is 31%, showing capital appreciation as well.

Glencore Chart over a 5-year period

Ares Capital Corporation (NASDAQ: ARCC) – 10.3%

Based in New York, Ares Capital Corp specialises in business development and lending to Medium/large enterprises. The firm currently employs around 2,500 people and has a turnover of around $2bn with a net profit margin of around 30% in previous years. Margins have shrunk in net profit; however, Ares has continued to pay out a consistent 10% dividend. Taking into consideration capital appreciation too the stock has risen around 13.3% over the last 5 years but taking a long stance on the chart gains do seem limited as it has been rangebound between $14-$21 since 2004. Future growth looks strong though as 2023 Y/R revenue we estimate will be $2.2-$2.3bn showing a gradual increase. We think Ares's services of business development, mergers, acquisitions and lending will see a boost through the next few years as larger companies look to buyout their competition and smaller businesses get support & lending throughout the opposed forthcoming recession investors predict.