Social Security doesn't provide enough income for most Americans to retire comfortably. It wasn't designed to do so. You need additional sources of retirement income.
Dividends can help supplement Social Security. But it can be difficult to pick from the thousands of stocks that offer dividends. Some especially stand out because of their high yields, though. Investing a total of $100,000 in these three dividend stocks could give you annual income of close to $6,300.
1. Enterprise Products Partners
Enterprise Products Partners (NYSE:EPD) ranks as one of the top midstream energy companies. The company's dividend yield currently stands at nearly 8.6%. If you invested one-third of an initial $100,000 in Enterprise stock, you'd receive annual income of a little over $2,850.
But is Enterprise's dividend reliable? My Motley Fool colleague Kody Kester views Enterprise as one of the safest high-yield dividend stocks on the planet. I think Kody is probably right.
Enterprise has increased its dividend for 23 consecutive years. Its near-term prospects appear to be solid as the global economy bounces back from the COVID-19 pandemic.
The company's long-term prospects are also better than you might think. Global energy demand will grow over the coming decades. Demand for oil and natural gas will likely increase even though there will be a shift toward renewable energy sources. Enterprise should be in a strong position to profit from this trend.
2. Medical Properties Trust
Medical Properties Trust (NYSE:MPW) stands out as another great alternative to generate retirement income. With its dividend yield of nearly 5.3%, an initial investment of $33,333 would provide more than $1,750 in annual income.
The real estate investment trust (REIT) owns around 440 hospital facilities, most of which are in the U.S. and Europe. It's the second-largest non-government owner of hospitals in the world.
MPT's portfolio is diversified across 52 hospital operators. Its largest property makes up only 2.6% of its total gross assets. The company's biggest tenant, Steward Health, maintains a strong liquidity position.
The hospital REIT has increased its dividend for eight consecutive years with a compound annual growth rate of 4.2%. Its stock has performed well also, jumping more than 80% over the last five years.
3. Verizon Communications
Between Enterprise Products Partners and Medical Properties Trust, you could make around $4,600 in annual income. That amount can be boosted to more than $6,300 by investing the remaining one-third of your initial $100,000 in Verizon Communications (NYSE:VZ) stock.
Verizon offers a dividend yield north of 5.1%. And that dividend is relatively safe. The telecommunications giant currently uses less than half of its earnings to fund the dividend program.
Don't expect Verizon to deliver jaw-dropping share appreciation. The stock's performance over the last five years is barely in positive territory. Next year could be tough for wireless carriers, in general, and Verizon could face challenges competing for customers.
However, the adoption of high-speed 5G networks should be a growth driver for Verizon over the rest of this decade. Even if the stock isn't a huge winner, its dividend will be.