Seeking at Least 11% Dividend Yield? Top Analyst Suggests 2 Dividend Stocks to Buy

Stepping into 2026 with your investing game plan already mapped out? If not, this could be the right time to take a closer look at dividend stocks. In a market that’s seen its fair share of twists and turns, they act like a steady paycheque, delivering regular income while still leaving room for share-price gains.

Sure, high-growth sectors like AI grab headlines, but there’s a growing crowd who value boring but reliable over fast but volatile, especially when cash flow matters. Dividend stocks can smooth out portfolio swings and give you something tangible to show for your investment even in choppy markets.

That search for income often leads investors toward a part of the market that doesn’t always get much attention: mortgage real estate investment trusts, or mREITs. These companies focus on generating income from mortgage-related assets and, by design, return a large share of that income to shareholders. The result is often dividend yields that stand out at a time when consistent cash flow can be hard to find.

Against this backdrop, we used the TipRanks database to dig into the details of two mREITs offering dividend yields of 11% or more, backed by payment histories stretching back 15 years or longer. KBW analyst Bose George, who is rated by TipRanks in the top 1% of Wall Street’s analysts, is constructive on both names – so let’s take a closer look at what’s driving their appeal today.

PennyMac Mortgage (PMT)

We’ll start with PennyMac Mortgage Investment Trust (PMT), which is all about mortgage-related assets. A big part of its business revolves around mortgage servicing rights, or MSRs, that it generates through its industry-leading correspondent lending operation. In simple terms, PMT acquires newly originated, high-quality mortgages, bundles them together, and then securitizes and sells them – a model designed to keep income flowing across different market conditions.

The company maintains a diverse portfolio of assets. As of September 30 last year, the company’s mortgage servicing rights were valued at $3.7 billion, while its various collateralized mortgage obligations were estimated at $4.6 billion.

From this, PennyMac Mortgage Trust derived a net investment income in 3Q25 of $99.23 million, a figure that beat the estimates by $1.33 million. The company’s bottom line figure, the EPS of 55 cents, was up 19 cents per share from 3Q24 – and importantly, the EPS fully covered the 40-cent common share dividend.

This dividend was last declared on December 10 for a January 23 payment. The company has kept the dividend at 40 cents per share since the beginning of 2023. The annualized rate of the payment, $1.60 per share, gives a forward yield of 11.6%. PMT has been paying out regular quarterly dividends since the end of 2010.

KBW analyst Bose George lists several reasons why PennyMac Mortgage Trust is a good investment, stating, “While PMT’s ROE remains in the high single digits, we think the steeper yield curve will drive returns closer to 10%. Further, as its parent company (PFSI) originates and securitizes more non-agency loans, this creates higher-yielding assets for PMT. Finally, given PMT’s exposure to mortgage banking, there is some upside optionality if mortgage volumes pick up meaningfully.”

George quantifies this stance with an Outperform (i.e., Buy) rating for the stock and a $13.50 price target. With the stock already up 10% this year, George’s target suggests the stock is fairly valued. (To watch George’s track record, click here)

That’s the bullish view. The analyst consensus here is a Hold (i.e., Neutral), based on 5 recent reviews that include 1 Buy and 4 Holds. (See PMT stock forecast)

Dynex Capital (DX)

Next up is Dynex Capital, a mortgage REIT with a pretty straightforward approach. The bulk of its portfolio is made up of agency residential mortgage-backed securities (about 93%, to be precise), which are backed by government-sponsored entities. Most of the rest is invested in agency commercial mortgage-backed securities. The idea is to focus on high-quality, liquid assets that can support attractive long-term returns while keeping credit risk in check.

For Dynex, a key point is targeting stable long-term returns. The company is careful about its risk management efforts and ensures a long-term yield for its investors. Dynex follows a systematic process in choosing its investments, to ensure consistent decisions in line with its strategic focus.

For investors, this translates into a solid dividend that can be relied on. Dynex pays out its dividend monthly – it switched from quarterly to monthly payments at the beginning of 2019 – a schedule that offers some advantages for dividend investors. Monthly payments tend to align better with people’s billing schedules than quarterly payments, allowing investors greater flexibility in using their dividend funds.

Dynex last declared its dividend in December for a January 9 payment. The current payment is set at 17 cents per common share. This payment annualizes to $2.04 per share and gives a robust forward yield of 13.9%. Dynex has been keeping up regular dividend payments since 2008.

That dividend is supported by the company’s net income of $1.09 per common share, as reported in the 3Q25 financial release. Dynex also finished Q3 with $1 billion in available liquidity.

Those figures underpin top analyst George’s view that Dynex’s dividend remains well covered. He writes: “We expect valuation to trend up as the market cap increases, which should continue as the company issues equity accretively and returns remain strong. Management expects mortgage REITs to increasingly grow as a marginal source of demand for agency MBS, ultimately becoming a larger holder of outstanding MBS in the market… We model economic returns of ~16% in 2026/2027 which is roughly in line with the break-even ROE implied by the $0.17 monthly dividend, so we believe the dividend remains reasonably well covered.”

On the back of that outlook, Bose rates Dynex shares an Outperform, equivalent to a Buy.

As for the broader Wall Street view, DX carries a Moderate Buy consensus rating, based on 2 bullish analyst reviews. (See DX stock forecast)

To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.