There are many successful moneymaking strategies on Wall Street. However, buying dividend stocks might just be the smartest move, especially if you’re a long-term investor.

In 2013, JP Morgan Asset Management, a division of JPMorgan Chase, published a report comparing the performance of companies that launched and increased their dividend with those of companies that did not pay a dividend over a 40-year period (1972-2012). The result? Dividend-paying stocks generated a 9.5% annualized return, which did the rounds for non-dividend-payers, who achieved a 1.6% annualized gain over four decades.

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These results are not surprising. Companies that are consistently profitable, have a proven track record, and have clear long-term prospects are more likely to pay a dividend. We expect the value of stable companies to increase over time.

The biggest challenge for income-oriented investors is weighing return against risk. In a perfect world, income investors would get the highest possible return with the least amount of risk. However, the data has shown that high-yielding stocks can be more trouble than they’re worth. Since return is a function of payout relative to share price, a struggling company with a declining share price may attract investors with a high return, but ultimately be a terrible investment (which called a “yield trap”).

But not all ultra-high-yielding dividend stocks are bad news. I arbitrarily define an “Ultra High Yielding Dividend Stock” as a company offering an annual yield of 7% or more.

The following trio of ultra-high-yielding stocks offer excellent value, a modest opportunity for long-term growth, and they’re all hot buys in 2022.

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Enterprise Product Partners: 7.9% Dividend Yield

The first ultra-high income stock just begging to be bought this year is an oil and gas company Enterprise Product Partners (NYSE:EPD). Enterprise Products Partners is analyzing a return of almost 8% and working on a sequence of increasing its base annual payment for each of the past 23 years.

For some income seekers, the thought of putting their money to work in an oil stock after seeing what happened in 2020 might cause indigestion. After all, the pandemic has caused a huge drop in demand for crude oil.

However, Enterprise Products Partners is not like your typical oil or gas stock that has been rattled by falling energy prices. It is a midstream company, which means it owns the energy assets of moving the pipeline (worth over 50,000 miles), as well as the raw and natural gas storage space. It also has more than a dozen natural gas processing facilities.

Operating as a middleman has its advantages. The most important being the structure of the contracts that Enterprise Products Partners puts in place with the drilling and exploration companies. These contracts provide for volume commitments in terms of transportation, storage and processing. In other words, even as the price of crude oil and natural gas wobbles, Enterprise Products Partners has a clear outlook for its expected cash flow for the year. This transparent perspective is important for a company that wants to continuously invest in new infrastructure projects without hurting its high return.

Additionally, at no time during the pandemic have we seen the company’s payout coverage ratio (DCR) fall below 1.6. The DCR measures the company’s annual distributable cash flow relative to what is actually paid out to shareholders. A DCR of less than 1 would imply an unsustainable payout. If Enterprise Products Partners didn’t have to worry about its payout when West Texas Intermediate crude was below $30 a barrel, investors certainly don’t have to worry now.

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Mobile TeleSystems: 12.9% dividend yield

Another ultra-high yielding dividend stock that looks like a crying buy in 2022 is the telecommunications giant Mobile telesystems (NYSE:MBT), better known as MTS.

Keep in mind that while MTS has the highest yield of the trio of stocks I’m talking about here (nearly 13%), its semi-annual payout will fluctuate based on its operating performance. Over the past five years, income investors have consistently enjoyed returns ranging from 7% to 11% with MTS.

Telecom stocks are often a good bet to line the pockets of dividend-seeking investors, and MTS is no exception. The company is one of the largest wireless service providers in Russia and continues to benefit from 4G LTE expansion opportunities in more rural environments in its home market.

But the most exciting growth opportunity for MTS’ telecommunications segment is the rollout of 5G. Since it took a decade for wireless service providers to demonstrably upgrade download speeds, MTS stands to benefit from a multi-year device upgrade cycle. This will put more retail revenue in the company’s pockets, while increasing wireless operating margins as subscribers consume more data with faster download speeds.

What separates Mobile TeleSystems from most other telecom heavyweight stocks is its venture into new, faster-growing verticals. The company is now involved in banking (MTS Bank), cloud services, and pay/streaming TV, among other revenue channels.

To provide some context, MTS’ third-quarter investor presentation notes that mobile services revenue grew a modest 4.2% from the year-ago quarter. Comparatively, “revenue beyond connectivity” grew 24% year-over-year in the first nine months of 2021. That growth was particularly strong among streaming, with over-the- -top which nearly doubled to 3.5 million in the third quarter of 2021 from 1.8 million in the comparable quarter of 2020. The point here is that these ancillary revenue channels will give MTS operating results a boost and will likely improve Mobile TeleSystems brand loyalty.

Priced at less than 9 times Wall Street consensus earnings per share for 2022, Mobile TeleSystems is screaming “good deal!”

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Annaly Capital Management: dividend yield of 11.1%

The third ultra-high-yielding dividend stock jumping like a screaming buy in 2022 is mortgage real estate investment trust (REIT) Annaly Capital Management (NYSE: NLY). Annaly pays out a staggering 11% return, has distributed more than $20 billion in payouts since its inception 25 years ago, and has averaged around 10% return over the past two decades.

The mortgage REIT industry may seem complex, but it boils down to a few easy-to-understand ideas. Mortgage REITs want to borrow money at the lowest possible short-term rate and use that capital to buy higher-yielding long-term assets, such as mortgage-backed securities (MBS) – that’s why they are called mortgage REITs. The goal is to maximize their net interest margin, which describes the percentage difference between the average return on their portfolio of assets and their average short-term borrowing rate.

Even though Wall Street hasn’t been enthusiastic about mortgage REITs for nearly a decade, the industry is right in the sweet spot of its expansion cycle. Looking back to 1960 and the eight previous recessions (not counting the pandemic-induced recession of 2020), we find that a steepening yield curve almost always coincides with a rebounding economy. This “steepening” involves widening the yield spread between short-term and long-term Treasury bonds. When this happens, mortgage REITs like Annaly often benefit from a higher net interest margin.

Another factor to consider is that Annaly does well when the country’s central bank clearly states its monetary goals and makes slow, deliberate changes to its approach. Although the Federal Reserve’s rate hike in 2022 may very well increase short-term borrowing costs, a methodical approach to raising rates (i.e. 25 basis points every three months) will give Annaly and her peers plenty of time to adjust their asset portfolios to maximize profits.

Finally, Annaly has 92% of its asset portfolio tied up in agency securities at the end of September. The assets of the Agency are protected in the event of default by the federal government. The security offered by owning agency MBS allows Annaly to use leverage to her advantage.

Currently trading below book value, Annaly looks like a smart way for income investors to put high inflation in its place.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.