Buying and holding high-quality, high-yield dividend stocks is a great way for investors to predictably generate market-beating returns over the long term. But not all dividends are created the same. In fact, when dividends are too high, it could be a sign that the business supporting it is facing trouble and may soon suspend or lower its payout.

So we asked three top Motley Fool contributors to each find a dividend stock that's worth consideration and yields at least 5% annually. Read on to see why they like Tanger Factory Outlet Centers (SKT 0.23%), AT&T (T 2.44%), and Iron Mountain (IRM 0.32%).

Hand playing a gold coin on the last of four successively taller stacks.


A better retail play

Steve Symington (Tanger Factory Outlet Centers): Tanger Factory Outlet Centers looks mighty temping, with its enormous 9.1% dividend yield -- though a payout that high seems to indicate the market anticipates the outlet center-focused real estate investment trust (REIT) is in jeopardy. 

Indeed, there's a chance Tanger could lower its dividend if well-known pressures facing the retail industry spread more broadly into its niche. And the company recently took the strategic step of selling four of its non-core properties that were in decline so it could redirect resources to higher-potential assets.

Meanwhile, the outlet-center model remains an attractive channel for both consumers looking for deals and retailer tenants looking to move inventory. And company CEO Steven Tanger insisted early last month that with healthy cash flows, a rock-solid balance sheet, and a reasonable payout ratio of 61%, the company plans to maintain its dividend while simultaneously deploying capital toward its most promising development and redevelopment projects to drive longer-term growth.

For shareholders willing to buy now and collect that dividend as Tanger implement's those plans, the stock could be a greater bargain than even the products their tenants offer.

This high-yield favorite could surpass expectations

Keith Noonan (AT&T): Among investors seeking big yield, AT&T is a name that tends to pop up a lot -- and for good reason. Shares yield a hefty 6.3%, and the company has raised its payout annually for 35 years running while still boasting safe payout ratios.  

On the other hand, shareholders have mostly had to be content with the telecom giant's sizable dividend payout in recent years. The company's mobile wireless segment has had pricing power diminished by tough competition, and the DIRECTV segment that it shelled out big bucks for in 2015 is losing subscribers to cord cutting. Shares are up less than 30% over the past decade, lagging far behind the roughly 200% climb for the S&P 500 index. 

So, while AT&T has a reputation for being a go-to, high-yield dividend stock, it's fair to say that the market is down on the company's growth prospects -- and that the business hasn't done enough to buck that assessment. Shareholders can probably expect the DIRECTV business to continue declining, but AT&T maintains a strong position in mobile communications and has opportunities to put its newfound strength in entertainment content to use and deliver better-than-expected growth.

The rollout of 5G network technology presents a dramatic advancement, and the improved download and upload speeds will pave the way for an explosion of new connected devices that are capable of doing things that are impossible to replicate at scale on current networks. AT&T's Time Warner acquisition also made it a world leader in content, and while the company has yet to figure out an ideal way to package this content in the age of streaming, there's a good chance these new assets can be leveraged to offset DIRECTV's decline and bring customers into its mobile ecosystem through bundling. 

AT&T offers a large, dependable yield backed by a business that looks pretty sturdy next to many other companies sporting yields north of 5%. Its stock stands out as a worthwhile buy trading at roughly 9 times this year's expected earnings.  

An ironclad dividend

Chris Neiger (Iron Mountain): High dividend yields are great, but only if the company that's handing them has the ability to pay them consistently. That's why income investors need to consider document storage company Iron Mountain, and its trailing dividend yield of 7.8%. Like Tanger Factory Outlet Centers, the company is structured as a REIT, which means that 90% or more of its income has to be paid out as dividends.

Iron Mountain's core business comes from its document storage and shredding businesses, but the company is diversifying its revenue with its data storage services as well. Between now and 2020, Iron Mountain's management has set a goal of generating 30% of its total sales from its "growth opportunities," which is primarily made up of its growing data storage services.

Admittedly, the company didn't have the best quarter recently, as revenue grew less than 1%, and CEO William Meaney pointed to "temporary higher labor costs in our North America businesses," causing Iron Mountain's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall 5.4% from the year-ago quarter. But the company said the costs should turn around later this year, and Iron Mountain's management still maintained its full-year guidance for 2019.

Investors looking for a stock with an impressive dividend, and one that still has lots of potential to tap into the growing data storage market, need to keep an eye on Iron Mountain.