Wednesday, February 28, 2024

10 best dividend stocks to buy with yields over 4%

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10 best dividend stocks to buy with yields over 4%
Credit: Kiplinger


High-Yield Stocks That Deserve Your Attention

As an income investor, you’re constantly on the lookout for opportunities that can provide attractive returns. One such avenue is investing in stocks with substantial dividend yields. While some stocks offer meager dividends that hardly make a dent in your income, there are others that can make a significant difference. In this article, we present to you 10 handpicked dividend stocks that currently boast yields of over 4%, making them potentially lucrative investments for income-seeking individuals.


Energizing Your Portfolio: Energy and Infrastructure Stocks

When it comes to high-yield dividend stocks, energy and infrastructure sectors are often the go-to choices. Within these sectors, we have identified four exceptional stocks that stand out from the crowd.


1. Brookfield Renewable: Meeting the Demand for Renewable Energy

In the years to come, the demand for renewable energy is expected to soar. Brookfield Renewable (BEP 1.17%) (BEPC 0.86%) is well-positioned to capitalize on this trend with its extensive development pipeline capacity, which is more than four times its current operational capacity. Investors can choose between the company’s limited partnership shares (traded under the BEP ticker) that offer a dividend yield of nearly 4.6%, or its corporate entity shares (traded under the BEPC ticker) that provide a yield of close to 4.4%.


2. Cohen & Steers Infrastructure Fund: Diversified Investment in Infrastructure

Cohen & Steers Infrastructure Fund (UTF 1.24%) presents an intriguing option for investors. Although technically a closed-end fund (CEF), it trades like a regular stock and offers a convenient way to gain exposure to a diversified basket of infrastructure stocks. The fund’s attractive yield of 8.1% makes it an enticing prospect for income-focused investors.


3. Devon Energy: Capitalizing on Oil and Gas Potential

Despite the inherent volatility in the oil and gas industry, Devon Energy (DVN -0.12%) stands out with its impressive dividend yield of nearly 9.5%. While the variable portion of its dividend might fluctuate based on excess free cash flow, the overall yield remains attractive. Income investors can expect stable dividends from Devon Energy in the near term.

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4. Enterprise Products Partners: A Steady Revenue Stream

With a remarkable track record of 24 consecutive distribution increases and a compound annual growth rate of around 7%, Enterprise Products Partners (EPD -0.23%) is a reliable choice for dividend-seeking investors. The midstream energy company operates an extensive network of over 50,000 miles of pipelines, ensuring a steady revenue stream regardless of oil and gas prices. Investors can enjoy a yield of close to 7.5% by investing in this well-established player.


Following the Money: Financial Powerhouses with Generous Dividends

As the saying goes, “It takes money to make money.” The following two companies have substantial capital to lend and offer attractive dividends to income investors.


5. Ares Capital: A Leading Business Development Company

Ares Capital (ARCC -0.05%) holds the distinction of being the largest publicly traded Business Development Company (BDC). Specializing in providing financing to small-to-medium-sized businesses, Ares Capital has consistently outperformed the market. With a remarkable dividend yield of nearly 10.3%, this stock is a top contender for income-seeking investors.


6. M&T Bank: Weathering the Storm

The recent challenges faced by several U.S. banks have impacted M&T Bank (MTB -0.36%) as well. However, the resulting decline in stock price has pushed the bank’s dividend yield to over 4.1%. M&T Bank’s strong profitability and solid balance sheet indicate its potential for recovery once the banking crisis settles. Income investors can look forward to a rebound in both the stock price and dividends.


Fortifying Your Portfolio with Healthcare Giants

Income investors seeking stability and growth can find promising options in the healthcare sector. Here are two leading pharmaceutical stocks worth considering.


7. AbbVie: A Proven Track Record

AbbVie (ABBV 1.13%) has an impressive track record of increasing dividends for 51 consecutive years. Currently boasting a dividend yield of nearly 4.5%, AbbVie faces temporary headwinds due to declining sales of its flagship drug, Humira. However, the company’s long-term prospects remain strong, making it an appealing choice for income-focused investors.

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8. Pfizer: Positioning for Long-Term Growth

Pfizer (PFE 1.55%) experienced a significant boost in revenue and profits thanks to its COVID-19 vaccine, Comirnaty, and antiviral therapy, Paxlovid. Although sales of these products are declining, Pfizer anticipates robust growth in the coming years, driven by new product launches and acquisitions. Meanwhile, the stock offers a dividend yield of over 4.5%, making it an attractive option for income investors.


Embracing the Wireless Revolution

With the widespread adoption of 5G networks and the surge in the Internet of Things, the demand for wireless services is set to soar. Take advantage of this growth by considering the following dividend-paying stocks.


9. Crown Castle: Building a Strong Foundation

Crown Castle (CCI -0.12%) operates as a real estate investment trust (REIT) and owns cell towers and small cells. These assets provide wireless access in high-demand areas. With a dividend yield surpassing 5.5%, Crown Castle presents an enticing opportunity for income-seeking investors.


10. Verizon Communications: Expanding Connectivity

Verizon Communications (VZ 0.54%) may experience declining free cash flow, but the telecom giant anticipates a significant improvement in the near future as capital spending decreases. Income investors can rely on Verizon’s attractive dividend yield, which currently stands at 7.1%. This dividend, combined with the company’s commitment to expanding connectivity, makes Verizon an intriguing stock to consider.


Conclusion

When searching for high-yield stocks, investors must carefully evaluate opportunities to maximize their income potential. The 10 dividend stocks presented in this article provide income investors with a diverse range of options across various sectors. By considering these stocks with dividend yields of over 4%, investors can potentially enhance their portfolio’s performance while generating a steady stream of income.

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FAQs

Q: What are the best stocks for dividends? 

A: Identifying the best stocks for dividends involves considering factors such as the company’s financial stability, dividend track record, and industry conditions. While specific recommendations can vary, some stocks that offer attractive dividend yields include Brookfield Renewable, Cohen & Steers Infrastructure Fund, Devon Energy, Enterprise Products Partners, Ares Capital, M&T Bank, AbbVie, Pfizer, Crown Castle, and Verizon Communications.

Q: What are the 3 dividend stocks to buy and hold forever? 

A: Selecting specific dividend stocks to buy and hold forever requires careful analysis and consideration of long-term prospects. Three dividend stocks with potential for long-term investment include AbbVie, Pfizer, and Crown Castle. These stocks have demonstrated stability, growth potential, and a track record of sustainable dividend payments.

Q: What is the safest dividend stock? 

A: Evaluating the safety of dividend stocks involves assessing factors such as financial health, dividend payment consistency, and industry stability. Companies with a long history of increasing dividends, such as AbbVie, can generally be considered relatively safe dividend stocks.

Q: Which types of stocks pay dividends? 

A: Dividend payments can be found across various types of stocks. Some types of stocks that commonly pay dividends include energy stocks, infrastructure stocks, business development companies (BDCs), banks, pharmaceutical companies, real estate investment trusts (REITs), and telecom companies. However, it’s important to note that dividend payments are not limited to these specific types and can be found in other sectors as well.

Q: What are the 5 highest dividend-paying stocks? 

A: The highest dividend-paying stocks can vary over time, and it’s crucial to conduct up-to-date research. However, some stocks with relatively higher dividend yields include Cohen & Steers Infrastructure Fund, Devon Energy, Ares Capital, Enterprise Products Partners, and Verizon Communications. These stocks offer attractive dividend yields compared to others discussed in the conversation.

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Mezhar Alee
Mezhar Alee
Mezhar Alee is a prolific author who provides commentary and analysis on business, finance, politics, sports, and current events on his website Opportuneist. With over a decade of experience in journalism and blogging, Mezhar aims to deliver well-researched insights and thought-provoking perspectives on important local and global issues in society.

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