Make money while you sleep. Or while you watch your favorite show. Or while you go out with friends. Or while...you get the picture. I'm talking, of course, about generating passive income.
There are plenty of ways to make passive income. One of the best is to buy stocks of great companies that pay attractive dividends. Here are my top three dividend stocks right now for generating passive income.
1. Devon Energy
Devon Energy (DVN 0.84%) offers a sky-high dividend yield of nearly 8.8%. That's more than 6x greater than the S&P 500's dividend yield. Devon's dividend is also one you can count on. The oil and gas company has paid a dividend for 29 consecutive years.
I think that Devon ranks as one of the best high-yield dividend stocks on the market right now. Its dividend is only one factor in my opinion, though. The stock has also trounced the overall stock market, jumping more than 30% year to date.
Devon is rewarding shareholders through stock buybacks as well. The company has repurchased $891 million worth of its shares so far in 2022. Its board of directors recently expanded the stock buyback program to $2 billion.
Sure, the current tailwinds for Devon won't last forever. However, I think the company should continue to be a winner for investors for a while to come.
2. Enterprise Products Partners
Enterprise Products Partners (EPD -0.31%) stands out as another great source of passive income in the energy sector. The midstream oil and gas company's distribution yield tops 7.6%. Enterprise has increased its distribution for 23 consecutive years.
Like Devon, Enterprise Products Partners has handily beaten the major market indexes so far this year. Its shares are up nearly 20% year to date.
Increased demand for crude oil and natural gas has benefited Enterprise. The company's assets include more than 50,000 miles of pipelines and 24 natural gas processing facilities, as well as 19 deepwater docks.
But as a leader in the midstream market, Enterprise isn't dependent on high fuel prices like oil and gas producers are. The company's business model helps ensure that the stock will hold up no matter the market conditions.
3. Medical Properties Trust
Medical Properties Trust (MPW 2.65%) has increased its dividend for 10 consecutive years. The healthcare-focused real estate investment trust (REIT) offers a dividend yield that now stands above 7.9%.
The bad news is that Medical Properties Trust stock hasn't performed well in 2022. Shares are down close to 40%. But it's not because the company's underlying business is struggling.
Medical Properties Trust's normalized funds from operations jumped 15.6% year over year in the first quarter to $282 million. Net income nearly quadrupled to $632 million, driven largely by acquisitions.
Chairman and CEO Ed Aldag stated in Medical Properties Trust's first-quarter conference call in April that the company "is in the strongest position in its history." That's not an exaggeration.
Medical Properties Trust has a healthy balance sheet that's been fortified even more by recent property divestitures. It's also well positioned to handle high inflation rates with the annual cash rent increases built into its leases. Investors should easily generate significant passive income with this high-yield dividend stock.
