The stocks and investments that are right for you will largely depend on your personal circumstances. If you're young and have decades of work ahead, you may prefer very different stocks from someone who's retired or close to it.
If you're retired, you may be looking for dividend income to pay your bills with cash from your portfolio -- perhaps without having to sell your shares. Most retirees also want peace of mind so that they can spend their time doing things they enjoy, without financial stress.
Don't worry, I've got you covered. Here are three dependable high-yield dividend stocks, with dividend yields between 5.5% and 7.5% that will fill your pockets and give you the peace you deserve.
Image source: Verizon Communications
1. Verizon Communications
Wireless networks are a staple of modern life in the United States, and you may have used Verizon Communications (VZ +0.53%) at some point as your phone or internet provider. The company is one of just a few players in the U.S. telecommunications market, entrenched by its expansive infrastructure built over the course of decades. Today, Verizon has 146 million connected lines across its retail segment.
NYSE: VZ
Key Data Points
While Verizon must continually invest in infrastructure, it produces enormous cash flow, which has funded its dividend and enabled management to raise it for 19 consecutive years. Shares currently yield a juicy 7% at their current share price.
Fortunately, investors needn't stress about Verizon's ability to pay its shareholders. The company's free cash flow, guided for $19.5 billion to $20.5 billion this year, is easily enough to cover the dividend.
Retirees will also like the stock's docile nature. It has a stock beta of just 0.35, meaning it doesn't respond nearly as much to the broader market's ups or downs. Verizon's smooth share-price action, generous yield, and modest 58% dividend-payout ratio check all the boxes that retirees look for.
2. Altria Group
Most retirees grew up in a time when smoking was more accepted than it is today. Despite a steady decline in smoking rates, Altria Group (MO +1.33%), which sells Marlboro cigarettes in the United States, has continued to raise its dividend year after year by continuously hiking its prices.
The company has increased its dividend for 54 consecutive years. Tobacco stocks are famous for their high dividend yields, and Altria's 7.5% doesn't disappoint.
NYSE: MO
Key Data Points
More importantly, the dividend has solid backing, including a manageable payout ratio of 78% of 2025 earnings estimates and an investment-grade (BBB-rated) balance sheet. There are some legitimate long-term concerns about the company's inability thus far to capture meaningful market share in new smoke-free nicotine-product categories, but that's not as much of a problem for retirees. Marlboro has carried the company for years and probably won't fall off overnight.
Altria and other tobacco stocks are notoriously resilient. Shares currently have a beta of 0.51, so once again, investors face less risk of share-price swings that might raise their blood pressures to concerning levels. Wall Street still anticipates low-single-digit earnings growth over the next three to five years, so there isn't much near-term concern for the dividend unless Altria's earnings begin to drop unexpectedly.
3. Realty Income
Real estate is an old-school investment asset that's still a great source of passive income. Realty Income (O +0.88%) is one of the largest real estate investment trusts (REITs), companies that acquire and lease real estate and distribute their income to investors as dividends. The stock currently yields over 5.5% at its current share price, and retirees will love that the company pays dividends monthly.
NYSE: O
Key Data Points
Realty Income's strong consumer-facing tenant base, net-lease model, and astute management team have delivered 32 years of uninterrupted dividend growth. The only catch with the REIT's dividends is that they're nonqualified -- meaning the IRS may tax them as ordinary income unless you hold the stock in a tax-advantaged account.
The stock has languished amid rising rates and some hefty acquisitions over the past few years, but it could be poised to emerge from its slump with the Fed's recent rate cuts and strong profit guidance for this year.
Lastly, Realty Income is yet another stock that shouldn't keep you up at night. Shares currently have a beta of 0.77, so Realty Income, like the previous two stocks, is typically less volatile than the broader market.
