Income investors often have to make trade-offs. They might give up a more attractive dividend yield for lower portfolio risk or vice versa. But such trade-offs aren't always necessary.
Some stocks offer great yields and aren't inordinately risky. Here are three of the best high-yield dividend stocks to buy in February.
1. Easterly Government Properties
When I think of low-risk dividend stocks, Easterly Government Properties (DEA -1.42%) immediately comes to mind. The company is a real estate investment trust (REIT) that leases nearly all of its properties to the U.S. government.
Easterly's dividend yield currently stands above 6.7%. The company's dividend should be easily sustainable. A whopping 98% of Easterly's lease income is paid by federal agencies. There's arguably no better tenant in the world to have than Uncle Sam.
It's important to watch how much debt a REIT has, especially with interest rates now higher than they've been in years. Easterly should be in good shape on this front. The company's debt totaled $1.37 billion at the end of the third quarter of 2022. This amount is likely to decrease, though, with Easterly's sale of 10 properties for gross proceeds of $205.3 million.
The Federal Reserve appears to be easing up on interest rate hikes as inflation moderates. That's great news for Easterly because it means the company's borrowing costs to fund future expansion shouldn't be as high as they might have been. Positive moves by the Fed could cause Easterly stock to deliver solid gains this year.
2. Enterprise Products Partners
Enterprise Products Partners (EPD -0.42%) is a leading midstream energy company. It owns more than 50,000 miles of pipelines that transport natural gas liquids, natural gas, crude oil, petrochemicals, and refined products. Enterprise also operates 24 natural gas processing facilities as well as other facilities for processing oil and gas products.
Income investors should love Enterprise Products Partners' dividend. The company has increased its dividend for 24 consecutive years. Its dividend yield is now nearly 7.4%.
Enterprise's ability to pay its dividend doesn't depend on oil and gas prices. Instead, the company can rely on steady cash flow from the fees it charges to use its pipelines.
But could the shift to renewable energy sources threaten Enterprise Products Partners over the longer term? The company actually isn't worried about clean energy's impact on its business. Enterprise is reducing carbon emissions at its facilities. However, it also expects that the demand for its pipelines will grow in the future rather than decline.
3. Medical Properties Trust
Medical Properties Trust (MPW -2.32%) is a REIT that leases facilities to hospital operators. It currently owns 435 facilities with around 44,000 licensed beds in the U.S., Australia, Colombia, and seven European countries.
The hospital REIT offers an especially juicy dividend yield of nearly 8.9%. Medical Properties Trust has also increased its dividend for eight consecutive years, while several of its peers cut their dividends.
Last year was challenging for Medical Properties Trust. The stock plunged more than 50% due to investors' worries about the financial stability of several key tenants. Indeed, one of the REIT's tenants (Pipeline Health) declared bankruptcy.
But Medical Properties Trust recently received some good news. Pipeline will pay all of the rent owed for the properties it leases from Medical Properties Trust. Also, the REIT's other tenants should benefit from increased reimbursement from Medicare and private payers. With these developments improving Medical Properties Trust's own financial outlook, this high-yield dividend stock appears to be a great pick to buy in February.
