The S&P 500's dividend yield is currently around 1.4%, which isn't very attractive if you desire to collect passive income. However, many stocks offer much higher yields, with several presently paying dividends yielding 5% or more. Here are five stocks with payouts above that level that should generate income for their investors for years to come.
Agree Realty
Agree Realty (ADC 0.24%) yields 5.3% these days. Even better, the real estate investment trust (REIT) pays a monthly dividend. Those two characteristics make it great for those seeking to collect passive income.
NYSE: ADC
Key Data Points
The REIT supports that dividend with a portfolio of income-producing retail properties. It focuses on owning properties net leased or ground leased to financially strong national and super-regional retailers resistant to disruption from e-commerce. It therefore collects very durable and stable rental income. It pays out about 75% of that income in dividends and uses the rest to help fund new acquisitions. Its steadily expanding portfolio has supplied it with the rising income to grow its dividend at a 6.1% annual rate over the last decade. With a strong balance sheet and long growth runway, Agree Realty should be able to continue increasing its dividend in the years ahead.
Clearway Energy
Clearway Energy (CWEN +0.48%)(CWEN.A +0.64%) offers a 7.7% dividend yield. The clean power producer backs that payout with very stable income generated by selling electricity to utilities and large corporate buyers under long-term contracts.
The company expects to increase its already attractive payout by 5% to 8% annually over the long term, with growth likely toward the upper end through at least 2026. Clearway has already secured the funding and investments to deliver on that target. It sold its thermal assets in 2022, which gave it the cash to invest in several high-return renewable energy acquisitions. Those deals will close over the next few years as the projects enter commercial service. Meanwhile, Clearway should have ample power to continue growing its portfolio and payout in the future, given the country's massive need for new renewable energy investment.
Oneok
NYSE: OKE
Key Data Points
Oneok's (OKE 0.97%) dividend yields 5.9%. The pipeline giant supports that payout with steady cash flow backed by long-term, fee-based contracts. The company aims to increase that payout by 3% to 4% annually.
Acquisitions and organic expansion projects will fuel that growth. Oneok closed its needle-moving acquisition of Magellan Midstream Partners last year, which will help fuel double-digit earnings growth this year. It has the financial flexibility to make more deals as compelling opportunities arise. On top of that, the company has several organic expansion projects under construction and in development to support the country's growing oil and gas production. Those projects will grow its cash flow as they come online. While the country is slowly transitioning to lower carbon energy, it will need fossil fuels for decades, which should give Oneok plenty of fuel to continue paying dividends.
Vici Properties
Vici Properties (VICI +0.92%) pays a 5.7% yielding dividend. The REIT focuses on gaming and experiential properties net leased to high-quality operators. That allows it to collect very stable rental income to support that payout.
The company has increased its dividend in all six years since its formation, including by 6.4% last September. Acquisitions are its main growth driver. It invested nearly $2 billion across various transactions last year, including its first international investments and several new experiential categories. It has continued to secure new investments this year, including funding the development of a Margaritaville Resort in Kansas City, which includes options to buy that resort and other experiential properties developed in the city by the operator. The company continues to extend its growth runway by expanding into new categories and developing new relationships with operators. Given its strong balance sheet and access to capital, Vici Properties should be able to continue expanding its portfolio and dividend for years to come.
Verizon
NYSE: VZ
Key Data Points
Verizon (VZ 0.10%) pays a 6.7% dividend yield. The telecom giant supports that payout with stable and recurring cash flows as customers pay their broadband and wireless bills.
The company is a cash flow machine. It produces enough cash to invest in its network, pay a growing dividend, and strengthen its already solid balance sheet. The company's investments in 5G should help increase its cash flow in the coming years. Meanwhile, cost-cutting efforts (Verizon aims to shave $2 billion to $3 billion in operating costs by 2025 while reducing capital expenses by over $5 billion from its peak) and debt reduction will enable it to produce even more free cash flow. That will allow Verizon to continue increasing its dividend, which the telecom company has done for 17 straight years. While Verizon won't grow its payout at blazing speeds (it has averaged about 2% annually in recent years), its high-yielding dividend should continue to rise gradually.
Growing income streams
Agree Realty, Clearway Energy, Oneok, Vici Properties, and Verizon all pay dividends yielding more than 5%. Those companies should be able to sustain and grow their high-yielding dividends over the long haul. That makes them great stocks to buy for a potential lifetime of dividend income.
