Down 8%, 9%, and 13% in 3 Months, these 3 High-Yield Dividend Stocks Are Buys in December

In the volatile market of 2024, some high-yield dividend stocks have experienced significant price drops, presenting attractive buying opportunities for investors. Despite the recent declines, these stocks maintain strong fundamentals and offer compelling income prospects. Let's analyze three high-yield dividend stocks that have dropped by 8%, 9%, and 13% in the past three months and explore why they could be compelling buys in December.

1. Hercules Capital (HTGC)
Hercules Capital, a business development company (BDC) specializing in venture capital financing, has seen its stock price decline by approximately 8% in the past three months. Despite this drop, Hercules Capital remains an attractive investment option for income-seeking investors. The company offers a high dividend yield of 10.6% and has a strong track record of dividend growth, with a 10-year growth rate of 11.5%. Hercules Capital's payout ratio of 85% indicates that its dividend is sustainable, supported by a robust balance sheet and cash flow.

2. Ares Capital (ARCC)
Ares Capital, another BDC focused on providing financing to middle-market companies, has experienced a 9% decline in its stock price over the past three months. Ares Capital's dividend yield stands at 9.5%, with a 10-year growth rate of 10.2%. The company's payout ratio of 82% suggests that its dividend is secure, backed by a solid balance sheet and cash flow. Ares Capital's diversified portfolio and strong credit quality make it an appealing choice for income investors.

3. Horizon Technology (HRZN)
Horizon Technology, a competitor of Hercules Capital in the venture debt market, has seen its stock price drop by around 13% in the past three months. Despite this decline, Horizon Technology offers an attractive dividend yield of 11.1% and a 10-year growth rate of 10.8%. The company's payout ratio of 88% indicates that its dividend is stable, supported by a strong balance sheet and cash flow. Horizon Technology's focus on technology, life sciences, and sustainable energy industries positions it well for long-term growth.

In conclusion, the recent price drops of Hercules Capital, Ares Capital, and Horizon Technology present compelling buying opportunities for income-seeking investors. Despite their declines, these high-yield dividend stocks maintain strong fundamentals and offer attractive income prospects. As the market stabilizes and sentiment improves, these stocks could rebound, making them excellent buys in December. Investors should carefully evaluate these opportunities and consider their risk tolerance and investment goals before making any decisions.