High-yield dividend stocks for income generation

What happened: On Friday, Morgan Stanley's 4.250% Preferred Stock, Series O (MS.PRO) yielded above 6.5%, trading as low as $16.26. Meanwhile, Lument Finance Trust's 7.875% Series A Preferred Stock (LFT.PRA) pushed past a 12% yield, trading at $16.39. In the high-yield dividend stock space, Realty Income (O) and AT&T (T) offered yields of 4.14% and 7.7%, respectively. Fidelity and Schwab restricted access to a $150 billion tax-dodge strategy, with Goldman Sachs stepping in. Vanguard's High Dividend Yield ETF (VYM) was held by 15 of the 51 most recent 13F filers.

Market impact: High-yield dividend stocks are attracting investors seeking income generation, with preferred stocks of Morgan Stanley and Lument Finance Trust yielding above 6.5% and 12%, respectively. The brick-and-mortar retail and energy sectors, represented by Realty Income and AT&T, are offering attractive yields. The restricted access to a tax-dodge strategy may redirect capital towards dividend-paying stocks, further boosting demand.

What to watch next: On October 25, Morgan Stanley reports earnings, which could provide insight into its preferred stock's yield. On November 1, Lument Finance Trust reports earnings, potentially influencing its preferred stock's valuation. Additionally, investors should monitor the Federal Reserve's interest rate decision on November 2, as changes in interest rates can impact dividend stocks' yields and valuations.