In today’s volatile market, many investors are seeking reliable sources of passive income to supplement their portfolios. While the S&P 500 currently offers a modest dividend yield of around 1.4%, several stocks stand out by paying dividends yielding 5% or higher. These high-yield dividend stocks could potentially provide a lifetime of income for patient, long-term investors.
Agree Realty: A Monthly Income Stream
One compelling option is Agree Realty (NYSE: ADC), a real estate investment trust (REIT) that yields an attractive 5.3% at present. What makes this stock particularly appealing for income-seekers is that it pays dividends on a monthly basis, providing a consistent stream of passive income.
The secret to Agree Realty’s success lies in its strategic focus on owning retail properties that are either net leased or ground leased to financially robust national and regional retailers. These tenants are largely resistant to the disruptive forces of e-commerce, ensuring a steady and dependable flow of rental income for the REIT.
Agree Realty takes a prudent approach, distributing approximately 75% of its rental income as dividends and reinvesting the remainder into acquiring new properties. This disciplined strategy has enabled the company to grow its dividend at an impressive 6.1% annual rate over the past decade. With a strong balance sheet and ample growth opportunities, Agree Realty appears well-positioned to continue increasing its monthly dividend payments for years to come.
Clearway Energy: Riding the Renewable Wave
Clearway Energy (NYSE: CWEN, CWEN.A) is another high-yield dividend stock worth considering, currently offering a generous 7.7% yield. As a clean power producer, Clearway generates stable income by selling electricity to utilities and large corporate buyers through long-term contracts.
The company expects to increase its already attractive payout by 5% to 8% annually over the long term, with growth likely toward the upper end of that range through at least 2026. This confidence stems from Clearway’s strategic moves, including the sale of its thermal assets in 2022, which provided cash to invest in several high-return renewable energy acquisitions.
As these newly acquired projects come online over the next few years, they are expected to bolster Clearway’s cash flow and support further dividend growth. Moreover, the country’s massive need for new renewable energy investments should provide Clearway with ample opportunities to continue expanding its portfolio and sustaining its dividend growth trajectory.
ONEOK: Steady Cash Flows from Pipelines
For investors seeking exposure to the energy sector, ONEOK (NYSE: OKE) offers a compelling 5.9% dividend yield. As a pipeline giant, ONEOK generates steady cash flows backed by long-term, fee-based contracts, providing a solid foundation for its dividend payments.
The company aims to increase its dividend by 3% to 4% annually, fueled by strategic acquisitions and organic expansion projects. ONEOK’s recent acquisition of Magellan Midstream Partners is expected to drive double-digit earnings growth this year, while its ongoing organic projects will further bolster cash flow as they come online.
Despite the global transition toward lower-carbon energy sources, fossil fuels will remain an essential part of the energy mix for decades to come. This reality should provide ONEOK with ample opportunities to continue growing its dividend through strategic investments and expansions.
VICI Properties: Capitalizing on Experiential Real Estate
VICI Properties (NYSE: VICI), a REIT focused on gaming and experiential properties, offers a 5.7% dividend yield. By net leasing its properties to high-quality operators, VICI ensures a stable stream of rental income to support its dividend payments.
The company has consistently increased its dividend since its formation six years ago, most recently raising it by 6.4% last September. VICI’s growth strategy revolves around strategic acquisitions, with the REIT investing nearly $2 billion across various transactions in 2022 alone, including its first international investments and expansions into new experiential categories.
With a strong balance sheet and access to capital, VICI Properties is well-positioned to continue expanding its portfolio and extending its growth runway by forming new partnerships with operators and exploring emerging experiential sectors. This approach should enable the REIT to sustain and grow its dividend for years to come.
Verizon: A Telecom Titan’s Reliable Payout
Finally, investors seeking a high-yield dividend from a well-established company may want to consider Verizon (NYSE: VZ), currently offering a 6.7% yield. As a leading telecom giant, Verizon benefits from stable and recurring cash flows generated by customers paying their broadband and wireless bills.
Verizon is a true cash flow juggernaut, producing ample funds to invest in its network, pay a growing dividend, and strengthen its already solid balance sheet. The company’s investments in 5G technology are expected to further increase its cash flow in the coming years, while cost-cutting efforts and debt reduction initiatives will bolster free cash flow generation.
Verizon has a stellar track record of dividend growth, having increased its payout for 17 consecutive years. While the telecom company’s dividend growth rate may not be explosive (averaging around 2% annually in recent years), its high-yielding dividend should continue to rise gradually, providing a reliable source of passive income for long-term investors.
In conclusion, while the overall market dividend yield may appear lackluster, several stocks stand out as potential sources of lifetime income for dividend investors. By carefully evaluating companies like Agree Realty, Clearway Energy, ONEOK, VICI Properties, and Verizon, income-seekers may be able to construct a diversified portfolio of high-yield dividend stocks capable of generating passive income for years to come.
