Most stocks offer pretty pedestrian dividend yields these days. The S&P 500's dividend yield is near rock bottom at around 1.1%, a low it hasn't touched in over a quarter-century. That's making it more difficult to generate passive income from dividend stocks.
However, several companies offer big-time yields. Here are three intriguing options with yields as high as 10.3%.
Image source: Verizon.
Starwood Property Trust
Starwood Property Trust (STWD +0.00%) leads this group with a 10.3% dividend yield. The real estate investment trust (REIT) invests in a diversified portfolio of income-producing properties and real estate-backed loans. These investments generate interest and rental income to support its high-yielding dividend.
The REIT has built an increasingly diversified portfolio to sustain its dividend, which it has maintained for over a decade. Starwood recently expanded its platform to include investing in properties secured by long-term net leases through the $2.2 billion acquisition of Fundamental Income Properties. The portfolio comprises 467 properties secured by net leases, with a 17-year weighted average lease term and an average annual rent escalation of 2.2%. It should provide the real estate company with stable and steadily rising income to support its high-yielding dividend.
NYSE: STWD
Key Data Points
Starwood's diversification enables it to allocate capital toward its best investment opportunities. It has made $10.2 billion in new investments through the first nine months of 2025, including the acquisition of Fundamental Income and a record $800 million in infrastructure lending investments during the third quarter. The REIT's investment flexibility should support its ability to continue paying its monster dividend in the future.
Western Midstream Partners
Western Midstream Partners (WES 1.09%) yields 9.2%. The master limited partnership (MLP), which sends investors a Schedule K-1 Federal tax form each year, generates very stable cash flow. It owns energy midstream infrastructure, including pipelines and processing plants, backed by long-term, fixed-rate contracts and government-regulated rate structures.
NYSE: WES
Key Data Points
The MLP expects to produce between $1.3 billion and $1.5 billion of free cash flow this year. That's enough to cover its monster distribution payment and the capital expenditures to maintain and grow its operations with room to spare. It also has a rock-solid balance sheet, with its leverage ratio currently at 2.8 times, comfortably below its conservative target of 3.0 times. The company uses its financial flexibility to make acquisitions. It recently completed its $2 billion acquisition of Aris Water Solutions.
Western Midstream estimates that it can deliver low-to-mid single-digit annual distribution increases fueled by its organic growth drivers (volume and rate growth). Meanwhile, major growth capital projects and acquisitions can drive even faster distribution growth. Thanks in part to the Aris deal, Wester Midstream hiked its payout by 13% this year.
Verizon
Verizon (VZ +0.40%) yields 6.8%. The telecom giant produces recurring revenue from mobile and broadband contracts with consumers and businesses. It has increased its dividend for 19 straight years.
NYSE: VZ
Key Data Points
The company produces a prodigious amount of cash flow. Verizon generated $28 billion of cash flow from operations through the first nine months of the year. That was enough money to cover its capital spending ($12.3 billion) and dividend payments ($8.6 billion) with room to spare ($7.2 billion). The company is currently using its excess free cash flow to further fortify its rock-solid balance sheet.
Verizon anticipates generating even more free cash flow in 2026. It's working to close its $20 billion all-cash deal for Frontier Communications, which will enhance its ability to offer bundled mobile and broadband services to customers. That puts the company in a strong position to continue increasing its dividend payment.
Big-time passive income producers
Starwood Capital, Western Midstream Partners, and Verizon pay dividends that yield several times higher than the average stock. They also have rock-solid records of paying their lucrative dividends. As a result, they're ideal dividend stocks to buy to supercharge your ability to generate passive income next year.
