Huge stock market sell-offs have at least one positive side effect. They present great opportunities for income investors to lock in higher yields.
Even with the rebound this week following the Trump administration’s 90-day delay of most reciprocal tariffs, some dividend stocks offer especially attractive yields. These three ultra-high-yield dividend stocks are no-brainer buys after the recent market whiplash.
Ares Capital (NASDAQ: ARCC) offered an exceptional dividend before the steep sell-off in recent weeks. But its forward dividend yield of around 9% is even more appealing now.
The potential negative repercussions of a full-blown global trade war wouldn’t have left Ares Capital unscathed. As a business development company (BDC), Ares Capital makes its money primarily by lending to middle-market businesses. If those businesses struggle too much, they could default on their financial obligations.
However, Ares Capital is in a better position to navigate such an environment than most of its peers. The company is highly selective about which clients it takes on. Its portfolio is diversified with 550 clients representing 34 industries. Unsurprisingly, Ares Capital has a significantly better annual loss rate than BDC industry averages.
There could even be a silver lining for Ares Capital if the U.S. enters a mild recession. Banks could be less likely to provide loans to middle-market businesses, pushing them to BDCs such as Ares. I think Ares Capital will be able to successfully navigate whatever happens next.
Enbridge (NYSE: ENB) hasn’t given as wild a rollercoaster ride as many stocks this year. Shares of the Canadian energy company have remained in positive territory for most of 2025. I think this underscores Enbridge’s resilience.
Sure, the Trump administration has levied 10% tariffs on Canadian energy, much of which flows through Enbridge’s pipelines. However, Enbridge is like a toll-road operator who doesn’t care how expensive the vehicles are that ride along its roads. It makes the same amount regardless of oil and gas prices.
Also, Enbridge’s business goes beyond Canadian-U.S. trade. Many of its pipelines are fully in the U.S. The company is also now the largest gas utility in North America with operations in North Carolina, Ohio, Ontario, and Utah. This segment gives Enbridge added stability to weather any storm it might face.
Meanwhile, Enbridge continues to pay a juicy forward dividend yield of around 6.3%. The company has increased its dividend for 30 consecutive years, an impressive streak that I predict will keep going for years to come.
Another midstream energy leader, Energy Transfer L.P. (NYSE: ET), took a much harder beating during the recent market turmoil than Enbridge did. That might be surprising to some investors, considering that all of Energy Transfer’s 130,000+ miles of pipelines are in the U.S.
The upside of this volatility is that Energy Transfer’s distribution is even more attractive now. The limited partnership’s forward distribution yield currently stands at 7.8%. Energy Transfer plans to increase its distribution by 3% to 5% per year.
The Electric Reliability Council of Texas (ERCOT) projects that summer peak power demand will increase by up to 15% per year through 2029. PJM Interconnection is even more bullish, forecasting summer peak power demand growth of roughly 19% annually over the next five years. Drivers of this growth include the construction of new data centers to meet artificial intelligence (AI) demand and the increased electrification of buildings and vehicles.
Energy Transfer is in a great position to profit from these trends. The company already serves around 185 gas-fired power plants. It has multiple large-scale capital projects underway, including adding capacity at four West Texas processing units and constructing a new pipeline from the Waha natural gas hub in West Texas to a pipeline network south of Dallas-Fort Worth.
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Keith Speights has positions in Ares Capital, Enbridge, and Energy Transfer. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.
3 Ultra-High-Yield Dividend Stocks That Are No-Brainer Buys After the Market Whiplash was originally published by The Motley Fool
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