For more than a century, stocks have stood at the top of the pedestal, in terms of annualized returns when compared to bonds, commodities, and real estate. But among the various strategies investors can employ on Wall Street, few have been as consistently profitable as buying and holding high-quality dividend stocks.
Companies that pay a regular dividend to their shareholders are often recurringly profitable, time-tested, and capable of providing investors with a transparent long-term growth outlook. But most importantly, income stocks have a history of outperforming those that don't offer a dividend.
In "The Power of Dividends: Past, Present, and Future," analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance and relative volatility of dividend stocks to non-payers over a 51-year stretch (1973-2024). Hartford Funds found that income stocks more than doubled the average annual return of non-payers (9.2% vs. 4.31%) and did so while being notably less volatile than the non-payers.
Image source: Getty Images.
Though there are quite a few dividend stocks with ultra-high yields -- those with yields that are four or more times greater than the yield of the S&P 500 (currently 1.14%) -- that are currently attractive, five stand out as being among the safest ultra-high-yield dividend stocks you can confidently buy in 2026.
Sirius XM Holdings: 5.27% yield
The first high-octane dividend stock that can deliver for income seekers in the new year is none other than satellite-radio operator Sirius XM Holdings (SIRI 0.56%). Sirius XM's steady quarterly payout and declining share price have pushed its annual yield to almost 5.3%.
What makes Sirius XM such a special stock to own is that it operates as a legal monopoly. While it still competes with traditional radio operators for listeners, it's the only U.S. company with satellite radio licenses. As a subscription-driven operator, this monopoly status affords it reasonably strong pricing power.
Beyond being a legal monopoly, Sirius XM brings an attractive revenue mix to the table for its shareholders. Whereas many of its peers rely almost exclusively on advertising to generate revenue, Sirius XM brings in only around 20% of its net sales from ads (via Pandora). More than three-quarters of its net revenue comes from subscriptions, which tend to be highly predictable in most economic climates.
Sirius XM also offers investors a very attractive value proposition amid a historically expensive stock market. Shares can be scooped up for less than 7 times forward-year earnings, which is practically an all-time low for a public company of 31 years.
NYSE: EPD
Key Data Points
Enterprise Products Partners: 6.78% yield
There's arguably not a safer ultra-high-yielding energy stock on the planet than midstream colossus Enterprise Products Partners (EPD 1.64%). Enterprise has increased its payout for 27 consecutive years and has a yield that's closing in on 7%.
While some investors may be leery about putting their money to work in oil and gas stocks, given the heightened volatility in commodities, Enterprise Products Partners' operating model cuts directly through this concern. It's an energy middleman that oversees more than 50,000 miles of transmission pipeline and can store in excess of 300 million barrels of liquids. Most of its contracts are long-term and fixed-fee in nature, removing inflation and commodity spot price fluctuations from the equation. In other words, its operating cash flow is highly predictable.
Cash flow predictability is especially important considering Enterprise Products Partners' strategy of undertaking big projects and making bolt-on acquisitions. It has more than $5 billion in significant projects in the works, many of which focus on expanding its exposure to natural gas liquids. Meanwhile, most of its bolt-on acquisitions become accretive to its bottom line in the first year.
Although Enterprise Products Partners isn't historically cheap like Sirius XM, its multiple of less than 8 times forecast cash flow for 2026 makes its stock a bargain.
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Realty Income: 5.62% yield
Another supercharged ultra-high-yield dividend stock that epitomizes safety on Wall Street is the premier retail real estate investment trust (REIT), Realty Income (O +0.35%). This is a company that pays its dividend monthly and has increased its payout 133 times since going public in 1994.
Realty Income's not-so-secret sauce is that it primarily leases its commercial real estate properties to well-known, stand-alone businesses that provide basic necessity goods and services. With an emphasis on leasing to grocers, drugstores, dollar stores, convenience stores, and so on, Realty Income has focused its efforts on tenants that are generally resilient to recessions and e-commerce pressures.
Although it's still the envy of the retail REIT industry, Realty Income has been spreading its wings beyond retail over the last few years. It's established a leasing presence in the gaming industry, and through a joint venture with Digital Realty Trust, it plans to lease build-to-suit enterprise data centers.
Best of all, there's an intriguing value proposition with Realty Income stock. Shares are currently valued at less than 13 times projected cash flow per share in 2026, equating to a 19% discount to its average multiple to cash flow over the last five years.
NYSE: PFLT
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PennantPark Floating Rate Capital: 13.09% yield
A publicly traded company doesn't need to have a brand name or be an industry leader to generate a safe ultra-high-yield payout. Business development company (BDC) PennantPark Floating Rate Capital (PFLT 1.23%), and its monthly dividend that currently works out to a 13.1% annual yield, is an example of this in action.
Though PennantPark holds approximately $241 million in common and preferred equity in its investment portfolio, it's predominantly a debt-focused BDC. Prioritizing financing had led to a supercharged weighted-average yield on its debt investments of 10.2%. Furthermore, 99% of its loan portfolio consists of variable-rate investments, which means that a higher interest rate environment will pad its bottom line.
In addition to generating outsize yields on its loans, PennantPark is protecting its invested principal in a variety of ways. More than 99% of its $2.53 billion in debt is first-lien secured notes. In the event of a default from one of its borrowers, first-lien secured debtholders are at the front of the line for repayment. PennantPark Floating Rate Capital also has an average investment size of only $16.9 million, meaning no single investment can sink the ship.
Keeping with the theme, there's a value proposition here, as well. BDCs usually hover close to their book value. As of this writing on Jan. 3, PennantPark is trading at a 13% discount to its book value.
NYSE: PFE
Key Data Points
Pfizer: 6.83% yield
The fifth safe ultra-high-yield dividend stock you can confidently buy in 2026 is one of the most recognizable names in the healthcare sector, Pfizer (PFE 1.65%). A declining share price in recent years has pumped Pfizer's dividend yield to nearly 7%.
The interesting thing about Pfizer is that it's been punished for its success during the COVID-19 pandemic. After generating over $56 billion combined from its COVID-19 vaccine (Comirnaty) and oral treatment (Paxlovid) in 2022, sales of both drugs have since plunged. But based on the company's full-year sales guide of $62 billion in 2025, sales have risen by roughly 48% since the end of 2020. The debut of new therapies, coupled with the organic growth from existing treatments, has only made Pfizer a stronger company.
Pfizer's acquisition of cancer-drug developer Seagen, which was completed in December 2023, also sets the company up for success. This deal vastly expanded Pfizer's oncology pipeline, added billions in annual cancer-drug sales, and enhanced its cost-synergy efforts, which can meaningfully improve margins in 2026 (and beyond).
To round things out, Pfizer is valued at 8.4 times forward-year earnings per share, representing a 14% discount to its average forward price-to-earnings multiple over the last half-decade.
