3 High-Yield Financial Stocks to Buy in October
Key Points
Ares’ BDC business benefits from higher interest rates.
Brookfield Asset Management’s asset-light business will flourish in this market.
Strategy’s Strife shares are a safer way to profit from its Bitcoin buying spree.
- 10 stocks we like better than Ares Capital ›
With the 10-Year Treasury yield hovering near 5.3%, it might seem like a risky time to buy high-yielding dividend stocks in the financial sector. In this environment, many investors would rather buy a low-risk Treasury or CD instead of a dividend stock.
However, there are still plenty of high-yielding financial stocks that are well-insulated from higher interest rates and Treasury yields. Let's take a look at three of them -- Ares Capital (NASDAQ: ARCC), Brookfield Asset Management (NYSE: BAM), and Strategy's (NASDAQ: MSTR) STRF shares (NASDAQ: STRF) -- and see why they're still worth buying.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Ares Capital
Ares Capital, the world's largest business development corporation (BDC), finances smaller "middle market" companies that struggle to secure loans from conventional banks. In exchange for taking on that higher risk, it charges higher interest rates.
To reduce its risk, it spreads its $29.3 billion investment portfolio across 619 companies. It also allocates 59% of its portfolio to first-lien secured loans and 4% to second-lien secured loans.
Like banks, BDCs generally benefit from higher interest rates, which boost their net interest income. But those rates can't jump too high, or they'll adversely impact their portfolio companies. BDCs also must pay out at least 90% of their taxable income as dividends to maintain a lower tax rate. That's why Ares pays a high forward yield of 10%.
Analysts expect Ares' EPS to rise only 1% to $1.93 next year, which will cover its forward dividend rate of $1.92. At $19, its stock looks like a bargain at 10 times next year's earnings. So if you're looking for a simple, rate-resistant income play, Ares checks the right boxes.
Brookfield Asset Management
Brookfield Asset Management, one of the world's largest asset managers, was spun off from the financial conglomerate Brookfield Corporation (NYSE: BN) in 2022.
As a stand-alone company, Brookfield Asset Management operates as a "pure play" asset manager that raises the capital for Brookfield Corporation's investments and manages them. It doesn't actually buy or own Brookfield's assets -- it merely holds the rights to manage those properties and all the capital pooled together by its parent company and other investors. That business model also makes it more resistant to higher interest rates than its parent company.
Brookfield Asset Management is valued by its fee-related earnings (FRE) per share, or the recurring fees that fund its dividends. Its FRE per share rose 22% in 2025, and analysts expect that figure to rise 14%-17% to $2.10-$2.15 per share in 2026.
That should easily cover its forward dividend rate of $2.01 per share, which translates to a forward yield of 4.5%. At $44, it looks reasonably valued at 21 times this year's FRE per share.
Strategy's STRF shares
Strategy, the world's largest corporate holder of Bitcoin (CRYPTO: BTC), issued four classes of preferred stock last year. All four of these stocks pay high dividends, but "Strife" (STRF) -- which was launched last March -- is arguably the safest.
Strife ranks first in seniority among Strategy's four classes of preferred shares, and it's junior only to its corporate debt. It pays a fixed 10% annual dividend every quarter, and it's cumulative -- which means that any missed payments will accrue and must be repaid with step-up penalties before Strategy can resume its other dividend payments.
Strategy initially issued these preferred shares to fund its Bitcoin purchases, but it also periodically sells its Bitcoin holdings to fund the dividends. So if you're bullish on Bitcoin but also want to earn some extra income from Strategy's Bitcoin hoarding strategy, Strategy's STRF stock -- which has risen 13% since its launch -- might be a hidden high-yield gem.
Should you buy stock in Ares Capital right now?
Before you buy stock in Ares Capital, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ares Capital wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $375,240!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,403,292!*
Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 1, 2026.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ares Capital, Bitcoin, Brookfield Asset Management, and Brookfield Corporation. The Motley Fool has a disclosure policy.
