There's no official definition of a high-yield dividend stock. However, most investors would classify it as a stock with a dividend yield higher than a common benchmark such as the S&P 500 index or a 10-year U.S. Treasury note.
In early 2024, the dividend yield on the S&P 500 averaged about 1.5%, while the 10-year note was around 4.1%. Many investors would consider a stock as having a high-dividend yield if it were double the S&P 500; others would require a payout at or above the 10-year-note level.
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Those baseline measurements aside, investors shouldn't buy a stock because of itsdividend yieldalone. They need to make sure thedividend payments are sustainable. It should be a high-quality company with durable cash flow, a strong balance sheet, and visible growth potential. With all that in mind, here are 20 high-yield dividend stocks to consider buying for dividend income.
20 high-yield dividend stocks
20 high-yield dividend stocks to watch
| High-Yield Dividend Stock | Ticker | Annual Dividend Amount | Dividend Yield |
|---|---|---|---|
| AbbVie | (NYSE:ABBV) | $6.20 | 3.8% |
| AvalonBay Communities | (NYSE:AVB) | $6.60 | 3.7% |
| Brookfield Infrastructure | (NYSE:BIP)(NYSE:BIPC) | $1.52 | 5.1% |
| Brookfield Renewable | (NYSE:BEP)(NYSE:BEPC) | $1.36 | 4.8% |
| Duke Energy | (NYSE:DUK) | $4.12 | 4.3% |
| Crown Castle | (NYSE:CCI) | $6.28 | 5.8% |
| Chevron | (NYSE:CVX) | $6.04 | 4.3% |
| Enbridge | (NYSE:ENB) | $2.68 | 7.5% |
| Enterprise Products Partners | (NYSE:EPD) | $2.08 | 7.7% |
| Gilead Sciences | (NASDAQ:GILD) | $3.00 | 3.5% |
| Healthpeak Properties | (NYSE:PEAK) | $1.20 | 6.1% |
| Regions Financial | (NYSE:RF) | $0.96 | 5.3% |
| Extra Space Storage | (NYSE:EXR) | $6.48 | 4.4% |
| 3M | (NYSE:MMM) | $6.00 | 5.7% |
| Pfizer | (NYSE:PFE) | $1.68 | 6.1% |
| VICI Properties | (NYSE:VICI) | $1.68 | 5.4% |
| Realty Income | (NYSE:O) | $3.08 | 5.4% |
| Verizon Communications | (NYSE:VZ) | $2.68 | 6.9% |
| T. Rowe Price | (NASDAQ:TROW) | $4.88 | 4.6% |
| Kenvue | (NYSE:KVUE) | $0.80 | 3.8% |
Here's a brief look at what makes each of these high-yield dividend stocks look like attractive buys in 2024.
Dividend stocks 1-5
1. AbbVie
Drugmaker AbbViehas had an excellent dividend track record since its 2013 spinoff fromAbbott Labs (ABT 0.03%). From its inception through early 2024, AbbVie has increased its payout by a whopping 285%. The company has also carried on the dividend growth legacy it inherited from Abbott by boosting its payout every year.
AbbVie lost its patent-protected exclusivity for the top-selling drug Humira in 2023. However, newer products, likeRinvoq and Skyrizi, should help cushion the blow.
The company also made two blockbuster acquisitions in late 2023 (Cerevel Therapeutics (CERE -0.05%) for $8.7 billion and ImmunoGen (NASDAQ:IMGN) for $10.1 billion) to refill its pipeline and drive future growth. That puts it in excellent shape to keep the dividend income flowing and growing.
2. AvalonBay Communities
As one of the largest apartment owners in the country, AvalonBay benefits from collecting steady rental income to support its high-yielding payout. The real estate investment trust (REIT) also boasts a top-tier financial profile. The company's financial strength allows it to expand its apartment portfolio by developing and acquiring new communities.
While the company hasn't increased its payout every year, AvalonBay has grown its dividend at a 5% annual rate since its 1994 initial public offering (IPO), raising it by 3.8% in early 2023. With demand for apartments continuing to grow, the REIT should be able to keep increasing its dividend in the coming years.
3. Brookfield Infrastructure
Brookfield Infrastructureoperates a diversified portfolio of infrastructure businesses focused onutilities, transportation,energy (midstream), and data. The businesses generate relatively stable cash flow to support its growing dividend. The infrastructure stock delivered its 14th straight yearly payout increase in early 2023.
Brookfield envisions increasing its dividend at an annual rate of 5% to 9% over the long term, powered by the organic growth of its existing businesses and acquisitions. The company's organic growth drivers of inflation-linked rate increases, volume growth as the global economy expands, and expansion projects should grow its funds from operations (FFO) by more than 10% per share over the next few years.
Meanwhile, future acquisitions will further pad its bottom line. The company acquired three data center platforms and a global container leasing company in 2023.
4. Brookfield Renewable
Brookfield Renewableis a sibling company of Brookfield Infrastructure. Brookfield Corporation(BN -1.33%) controls both companies.
This Brookfield entity focuses onrenewable energy, including hydroelectric, wind, solar, and energy storage facilities. The assets generate steady cash flow backed by long-term power purchase agreements with utilities and other users, supporting Brookfield's high-yield dividend.
The company also expects to increase its payout at an annual pace of 5% to 9% over the long term. Powering that forecast are its organic growth drivers -- including an extensive pipeline of new renewable energy projects -- and additional acquisitions. Brookfield Renewable expects to grow its FFO per share by more than 10% annually through 2028.
5. Duke Energy
Duke Energy is a leading utility. The company's electric utilities serve 8.2 million customers across six states, while its natural gas utilities provide gas to 1.6 million customers across five states. Its businesses generate very stable cash flows backed by government-regulated rate structures. That has enabled Duke to pay dividends to its investors for 98 consecutive years as of early 2024.
Duke has a large-scale investment program underway to expand its transmission and distribution network. These investments should grow its earnings per share by 5% to 7% annually through 2027. The earnings growth should enable the utility to continue growing its dividend.
Dividend stocks 6-10
6. Crown Castle International
Crown Castle is a REIT focused on owning communications infrastructure in the U.S., including cell towers, small cells, and fiber-optic networks. Its infrastructure is crucial to supporting the mobile industry's next-generation network: 5G. Crown Castle sees a decades-long opportunity to invest in new 5G-related infrastructure.
While the company is facing some near-term headwinds, it expects to be able to resume growing its already high-yielding dividend after 2025. It has increased its dividend payment at a 9% compound annual rate since 2016.
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7. Chevron
The big oil giant's top financial priority is to sustain and grow its dividend. The company delivered its 36th consecutive annual dividend increase in 2023, one of the longest streaks among oil stocks. Chevron has grown its dividend at a 6% compound annual rate over the last 15 years.
Its integrated operations, low-cost oil business, and lower-carbon energy investments position Chevron to sustain and grow its dividend. The oil giant has also been an active acquirer in 2023.
It bought PDC Energy and agreed to buy Hess (HES 0.38%). Those deals will boost its cash flow and growth prospects. As a result, Chevron anticipates accelerating its dividend growth by increasing its payout by 8% in early 2024.
8. Enbridge
Canadian oil pipeline giant Enbridge has been an outstanding dividend stock over the years. It has paid dividends for more than 68 years and has expanded its payout in each of the past 29 years.
While the world is transitioning its fuel supply from oil to cleaner alternatives, Enbridge is adapting by investing in infrastructure to support natural gas projects and offshore wind farms. The investments have the company on track to increase its cash flow per share by a mid-single-digit annual rate for the next several years, which should support continued dividend growth.
9. Enterprise Products Partners
Enterprise Products Partnersranks as one of the top players in themidstream oil and gas market. The master limited partnership (MLP) has increased its payout for a quarter century.
While the company currently focuses on fossil fuels, it formed an evolutionary technology group in 2021 to pursue opportunities in energy transition. The future investments should give Enterprise the fuel to continue increasing its dividend.
10. Gilead Sciences
Gilead Sciencespays one of the most attractive dividends in the biotechnology sector. The company has a solid dividend track record, having increased its payout every year since it initiated one in 2015. Its strong HIV franchise is the biotech's anchor.
However, Gilead has also been able to cash in on its antiviral treatment Remdesivir, one of the few approved treatments for COVID-19. It has several promising drugs in the pipeline that should drive sales growth in the future.
Dividend stocks 11-15
11. Healthpeak Properties
Leading healthcare REIT Healthpeak Properties owns a diversified portfolio of healthcare real estate, including medical office buildings, lab space, retirement communities, and other properties. These properties generate healthy rental income, giving it the cash flow to pay an attractive dividend.
Healthpeak Properties is merging with fellow REIT Physicians Realty Trust (NYSE:DOC) in a deal that will create an even larger healthcare REIT. The transaction will significantly expand its medical office building portfolio while enhancing its ability to pay dividends.
12. Regions Financial
Regions Financial is one of the country's largest banks, focusing on the South and Midwest. Regions Financial has a long history of paying dividends. While the company reset its payment level during the 2008-2009 financial crisis, it has increased the dividend 20-fold since that time. It gave investors a whopping 20% raise in 2023.
13. Extra Space Storage
Extra Space Storage is a REIT focused on owning, operating, and managing self-storage facilities. The company has been one of the best-performing stocks in the REIT sector over the past decade.
A big driver is its rapidly rising dividend. Extra Space Storage has increased its payout by 548% over the last 10 years. More growth seems likely. It acquired fellow self-storage REIT LifeStorage in 2023. The transformation deal will grow its portfolio while providing new growth opportunities.
14. 3M
3M has been a phenomenal dividend stock. The industrial conglomerate has paid dividends for more than a century and has increased its payout in each of the past 64 straight years.
As such, it's a Dividend King, a company with 50 or more years of consecutive dividend increases. The company's strategy of investing in new products has driven that steady growth. It has expanded its sales and enabled 3M to keep increasing its dividend.
15. Pfizer
Pfizerhas paid dividends for more than 340 consecutive quarters, increasing it in each of the last 15 years. The pharmaceutical giant's investments in research and development are paying off.
The company developed one of the first vaccines against COVID-19 and followed that up with a successful oral treatment. The commercial successes have enabled Pfizer to continue making research and development investments and strategic acquisitions that should increase its cash flow in the future. Pfizer should continue to generate plenty of cash to fund future dividends.
Dividend stocks 16-20
16. VICI Properties
VICI Properties is a REIT focused on owning experiential real estate, like casinos. The company leases those properties back to operating companies under long-term triple net leases (NNN).
The agreements supply it with steadily rising rental income from annual rate increases. The company also steadily invests in new gaming and nongaming real estate. VICI Properties' growing income has enabled it to increase its dividend in each of the six years since its formation.
17. Realty Income
Realty Income lives up to its name. The REIT, which pays a monthly dividend, has made more than 640 consecutive payments. Even better, it has increased its payout more than 120 times since its IPO in 1994, expanding it at a 4.3% compound annual rate. That adds up to more than 25 consecutive years.
Driving that growth has been a steady diet of acquisitions. Realty Income purchases single-tenant properties in sale-leaseback transactions, acquires larger property portfolios, and merges with other REITs to grow its portfolio, rental income, and dividend.It agreed to buy Spirit Realty (NYSE:SRC) in a $9.3 billion transaction that should close in 2024.
Image source: Getty Images.
18. Verizon Communications
Telecommunications giant Verizon has been a great income stock over the years. The company delivered its 17th consecutive annual dividend increase in 2023, the longest current streak in the U.S. telecom sector. Verizon should be able to continue increasing its dividend as it invests to transition its mobile network to 5G, bringing faster data speeds to its customers.
19. T. Rowe Price
Mutual fund manager T. Rowe Price has a long history of paying dividends. The company raised its payment by 1.7% in early 2023, marking its 37th straight year of dividend growth. That steady dividend growth should continue as the company grows its assets under management (AUM) and its clients entrust it with more of their money.
20. Kenvue
Kenvue is new to paying dividends. The consumer health products company initiated its dividend in 2023 after separating from healthcare giant (JNJ 0.41%).
As a Dividend King with more than 60 years of dividend increases, its former parent leaves behind a long legacy of paying dividends. Kenvue should carry on that legacy. The company has a strong portfolio of iconic healthcare brands that generate lots of cash flow. It also has a healthy balance sheet. Those features put it in an excellent position to grow its cash flow and dividend payments.
Related investing topics
Great income now, more later
All 20 of these dividend stocks offer an above-average yield, making them stand out in a time when many companies don't pay very high dividends. Even better, each one has a solid track record of steadily increasing its dividend and showing no signs of stopping, so they're great income stocksto buy and hold for the long haul.
FAQ
High-yield dividend stocks FAQ
Which stock has the highest dividend yield?
Altria Group (NYSE:MO) had the highest dividend yield among stocks in the S&P 500 in early 2024 at almost 10%. The company, which manufactures tobacco, wine, smokeables, and related products, aims to pay out 80% of its adjusted earnings per share in dividends and to increase its payout at a mid-single-digit annual rate.
Are high-yield dividend stocks worth it?
High-yield dividend stocks can be worth the risks for many investors. The best ones generate an attractive income stream that steadily rises as the company increases its dividend. That can make high-yield dividend stocks ideal for retirees or those seeking supplemental investment income.
However, a high dividend yield can also signify a higher risk profile. Investors must ensure the company can maintain and grow its dividend over the long term.
What is a good dividend yield for a stock?
A good dividend yield for a stock can depend on many factors, including its cash flow stability, capital needs, and balance sheet. In early 2024, the average dividend yield of stocks in the S&P 500 was about 1.5%. A stock would need a yield of at least that level to be considered good compared to other options.
What are the 10 best stocks that pay dividends?
According to Morningstar, the 10 best dividend stocks in early 2024 were:
- ExxonMobil (NYSE:XOM)
- Verizon
- PepsiCo (NYSE:PEP)
- Altria Group
- Comcast (NASDAQ:CMCSA)
- Bristol-Meyers Squibb (NYSE:BMY)
- Gilead Sciences
- Medtronic (NYSE:MDT)
- NextEra Energy (NYSE:NEE)
These well-known companies paid higher-yielding dividends they steadily increased. On top of that, they stood out to Morningstar because they had high ratings and traded at cheaper prices compared to the broader market.
Matthew DiLallo has positions in 3M, AvalonBay Communities, Brookfield Corporation, Brookfield Infrastructure, Brookfield Infrastructure Partners, Brookfield Renewable, Brookfield Renewable Partners, Chevron, Crown Castle, Enbridge, Enterprise Products Partners, Gilead Sciences, Johnson & Johnson, Kenvue, Realty Income, Regions Financial, T. Rowe Price Group, Verizon Communications, and Vici Properties. The Motley Fool has positions in and recommends Abbott Laboratories, Brookfield Corporation, Brookfield Renewable, Crown Castle, Enbridge, Gilead Sciences, Kenvue, Pfizer, and Realty Income. The Motley Fool recommends 3M, AvalonBay Communities, Brookfield, Brookfield Infrastructure Partners, Brookfield Renewable Partners, Chevron, Duke Energy, Enterprise Products Partners, Extra Space Storage, Healthpeak Properties, Johnson & Johnson, Physicians Realty Trust, Regions Financial, T. Rowe Price Group, Verizon Communications, and Vici Properties and recommends the following options: long January 2026 $13 calls on Kenvue. The Motley Fool has a disclosure policy.
