Not Afraid to Take On Some Risk? These Ultrahigh-Yield Dividend Stocks Could Turn $10,000 Into Nearly $1,275 of Annual Income

There is an old investing adage that the higher the risk, the higher the return potential. While that’s not always true, in many cases, investors need to take on more risk to earn a higher return. It’s their reward for investing money at risk of loss.

While all investing involves some form of risk-taking, many investors (especially those seeking to generate income) prefer to limit their risk. However, there are some intriguing income opportunities for those willing to take on more risk. For example, those with $10,000 they want to invest in higher-risk, higher-upside opportunities can potentially turn that capital into a supercharged income stream by investing it in a trio of dividend stocks with big-time yields:

Data source: Google Finance and author’s calculations.

Here’s a closer look at why those yields are so high and whether these companies can sustain their big-time payouts.

The evolution of a high-yielding REIT

Rithm Capital is a unique mortgage real estate investment trust (REIT). It started with a focus on investing in mortgage-servicing rights. However, it has since expanded its platform, evolving into an asset manager. Last year, it took a notable step in its transformation, acquiring Sculptor Capital Management in a deal that significantly expanded its asset-management capabilities.

The company believes its shift toward asset management will put it in a better position to maintain its earnings base and grow its business. A steadier and growing earnings base would enhance its ability to pay dividends.

However, as Rithm Capital becomes more of an asset manager, the company risks outgrowing the REIT structure. If that were to happen, the company might need to convert into a taxable corporation. Such a switch…