High dividend yields are often a red flag. They can indicate that the company might not be able to maintain its payout in the future.

However, not all high-yielding stocks are high risk. Enterprise Products Partners (EPD -1.51%) and Realty Income (O -1.16%) stand out for their high-quality financial profiles and business models. Because of that, income-seeking investors can buy them without hesitation right now.

A well-oiled dividend machine

Enterprise Products Partners currently yields 7.4%. That's several times higher than the dividend yield on the S&P 500 (1.6%).

The master limited partnership (MLP) generates very steady cash flow to support that payout. About 75% of its earnings come from fee-based sources like long-term contracts and government-regulated rate structures.

Meanwhile, the pipeline company distributes slightly more than half that steady cash to investors. That enables it to retain lots of cash to fund expansion projects, repurchase units, and strengthen its already elite balance sheet.

The company ended the first quarter with a leverage ratio of 3. That's in the middle of its target range of 2.75-3.25. This low leverage ratio supports the MLP's strong investment-grade bond rating (A-1/Baa1), the highest in the midstream sector. That gives it tremendous financial flexibility to fund growth.

Enterprise Products Partners currently has $6.1 billion of commercially secured expansion projects under construction. It expects to complete $3.8 billion of those projects this year, which will boost its cash flow. Meanwhile, it has several more expansions under development. The midstream giant also has the financial flexibility to make acquisitions as it finds accretive opportunities.

The company's expansion-related investments should give it more fuel to pay distributions. The MLP has increased its payout for 24 straight years.

Living up to its name

Realty Income pays a 5.2%-yielding dividend. The real estate investment trust (REIT) has an excellent track record of paying dividends and recently declared its 636th consecutive monthly dividend. The company has increased its payout 121 times since its public market listing in 1994.

The REIT backs its payout with a strong portfolio and balance sheet. It owns a large and growing portfolio of income-producing real estate. It primarily owns properties leased to high-quality tenants in industries resistant to economic downturns and e-commerce pressures, like industrial, gaming, and non-discretionary retail.

Realty Income signs long-term triple net leases (NNN) that make the tenants responsible for variable costs like maintenance, real estate taxes, and property insurance. That provides it with very stable rental income.

Meanwhile, Realty Income pays out a reasonable percentage of its cash flow to investors via dividends (76.7% of its adjusted funds from operations in the first quarter). That gives it a big cushion while allowing it to retain some cash to fund new investments. 

The company further supports its payout with an elite balance sheet. Realty Income is one of only a handful of REITs with A-rated credit. That allows it to borrow money at a lower rate, enhancing its ability to make acquisitions. The company expects to acquire over $6 billion of real estate this year.

Realty Income's growing real estate portfolio will increase its cash flow, giving it more money to pay dividends. The REIT has given its investors a raise in each of the last 29 years, including nudging the payment up a few times already this year.

Elite income stocks

Enterprise Products Partners and Realty Income are low-risk, high-yield stocks. They generate lots of steady cash flow, have relatively conservative dividend-payout ratios, and high-quality balance sheets. That gives them the financial flexibility to continue expanding their operations while also steadily increasing their dividends. These features make them stocks that income-seeking investors should consider buying without hesitation right now.