3 Ultra-High-Yield Stocks Wall Street Forgot to Mention for August

Joel South

Thu, August 6, 2026 at 5:00 PM GMT+3 6 min read

Quick Read

HTGC yields 10.2% with its base dividend covered 120% by net investment income, while AB passes through all earnings at a 9.28% yield.
VRTS trades at a forward P/E of 8 and yields 6%, extending a dividend growth streak that began at $0.45 quarterly in 2014.
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Income investors chasing yield tend to gravitate to the same handful of REITs and MLPs, but three finance-sector payers with materially higher yields keep getting overlooked. A business development company, a global asset-management partnership, and a multi-boutique investment firm are all currently distributing well above what large-cap dividend stalwarts pay, with Hercules Capital yielding 10.2% leading the pack. Dividend safety is the filter here, so each name below is graded on coverage, distributable earnings, balance sheet, and payout history rather than headline yield alone.

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Hercules Capital

Hercules Capital (NYSE:HTGC) is a venture-lending BDC focused on technology and life-sciences borrowers, and it currently offers an ultra-high-yield of 11.05% on a trailing distribution of $1.60 per share. The stock traded around $16.69 on Aug. 5.

The dividend-safety math is the cleanest of the group. Q1 2026 net investment income of $88.11 million covered the base distribution by 120%, and Hercules just declared its 22nd consecutive quarterly supplemental dividend on top of the base. The portfolio is 98% floating rate and 88.6% first-lien senior secured, non-accruals are down to a single loan at 0.2% of the portfolio, and the alpha-vantage record shows uninterrupted quarterly payments running from 2017 through July 2026. The Q1 total payout of $0.47 per share (40-cent base plus 7-cent supplemental) was paid on May 21.

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The bull case for income buyers is simple: A senior-secured floating-rate book yielding a 12.2% core yield is generating enough spread income to fund the base dividend with room to spare, while record Q1 originations of $1.81 billion keep the earnings engine growing. CEO Scott Bluestein pointed to "net debt portfolio growth of $298.0 million, driving our total investment income to a record $141.5 million". Analysts are constructive as well, with a $19.36 average target price versus today's mid-$15 handle.

The caveat: GAAP leverage sits at 115.4% and regulatory leverage at 99.7%, so any credit-cycle stress would compress the supplemental component of the payout before the base.

AllianceBernstein Holding

AllianceBernstein Holding (NYSE:AB) is the publicly traded limited-partnership interest in one of the largest global asset managers, currently offering an ultra-high-yield of 9.35% on a trailing distribution of $3.41 per unit. Shares trade around $37.10.

Dividend safety here rests on a different mechanism: AB Holding operates a variable-distribution model that effectively pays out all quarterly adjusted net income. Q1 2026 delivered adjusted EPS of 83 cents and a matching 83-cent per unit distribution paid May 21. Q4 2025 delivered 96 cents adjusted EPS and a 96-cent distribution. Coverage is therefore always 1x by design, which is the good news and the caveat rolled into one. The balance sheet strength shows up in profitability: full-year 2025 adjusted operating margins expanded 140 basis points to 33.7%, and the record shows quarterly distributions paid every quarter back through 2021 without interruption.

For income investors, the pitch is that the platform is scaling in the areas that carry higher fees. Total AUM stood at $838.6 billion at quarter-end and rebounded to $881 billion in April 2026, and the institutional pipeline hit a record $27.5 billion. CEO Seth Bernstein cited "continued momentum across structurally growing areas including private markets, active ETFs, SMAs, insurance, and wealth management". At a forward P/E of 11 and a $38.86 analyst target, the unit is priced for the flow softness rather than the underlying margin story.

The caveat: because the distribution is variable, weaker earnings quarters produce smaller checks. The quarterly range over the past three years has run from $0.61 to $1.05, so budget the yield as a range, not a fixed coupon.

Virtus Investment Partners

Virtus Investment Partners (NYSE:VRTS) is a multi-boutique asset manager currently offering an ultra-high-yield of 5.92% at a trailing dividend of $9.45 per share. The stock trades around $162.16, well below the 52-week high of $203.02.

The dividend-safety read is more nuanced but still supportive. Coverage remains ample on an earnings basis: Q1 2026 adjusted EPS came in at $5.38 against the quarterly dividend of $2.40, and trailing diluted EPS is $16.97. Virtus raised the quarterly payout from $2.25 to $2.40 starting with the Q3 2025 payment, extending a growth trajectory that runs from $0.45 quarterly in 2014 to $2.40 today. The balance sheet did take on more work after the March 1, Keystone acquisition: gross debt sits at $448 million and cash dropped to $136.6 million. Still, book value per share of $139.51 and a price-to-book of 1.17 anchor the equity story.

The bull case is valuation. VRTS trades at a trailing P/E of 9 and a forward P/E of 8, at a discount to its own recent history and to most listed asset-manager peers, with a starting yield right at the ultra-high-yield threshold and a rising dividend. Share repurchases continue as well, with $10.0 million deployed in Q1 2026 covering 73,463 shares.

The caveat: flows remain the pressure point. Q1 2026 net outflows were $8.4 billion, AUM fell 11% year over year to $149.0 billion, and adjusted operating margin compressed 360 basis points to 24.0%. Until the outflow trend inflects, forward earnings power is capped.

The Common Thread

These three names sit in the same overlooked corner of financials: capital-markets-adjacent businesses where the payout is a direct function of distributable earnings rather than a fixed corporate coupon. Hercules gives you a senior-secured floating-rate BDC covering its base dividend by 120%, AllianceBernstein gives you a variable pass-through partnership yielding above 9% that scales with margin expansion, and Virtus gives you a rising dividend, deep-value multiple and a starting yield right at the ultra-high-yield line. Each carries a different risk profile, but the combined result is an income sleeve that most Wall Street model portfolios still leave out.