Investing in high-yielding dividend stocks is one of my favorite ways to generate passive income. The best ones offer a stable and steadily rising payout.
There are lots of high-quality, high-yielding dividend stocks. Two that I wouldn't hesitate to buy this March are EPR Properties (EPR 0.86%) and Oneok (OKE +0.78%). Here's what makes them ideal passive income investments.
Image source: Getty Images.
Starting to accelerate
EPR Properties is a real estate investment trust (REIT) focused on investing in experiential properties, including movie theaters, eat-and-play venues, and attractions. It leases those properties to operating tenants, primarily under long-term triple net leases. Those leases provide it with very stable rental income because tenants cover all property operating costs.
The REIT grew its funds from operations (FFO) by 5.1% last year, driven by rent growth and investing $288.5 million in new properties. That enabled EPR Properties to raise its monthly dividend by that same rate this year (up from a 3.5% dividend increase last year). That pushed its yield up to around 5.9%.
NYSE: EPR
Key Data Points
EPR Properties expects to grow its FFO by more than 5% again this year at the midpoint of its guidance range. It plans to invest even more money into new properties this year ($400 million to $500 million), including $85 million into experiential development and redevelopment projects already underway. The REIT's growing portfolio should continue to support low-to-mid single-digit annual dividend growth.
The slowdown before the reacceleration
Oneok is a leading pipeline company. Long-term, fixed-rate contracts and government-regulated rate structures underpin the bulk of its energy midstream assets. As a result, Oneok generates very stable cash flows.
The pipeline giant delivered double-digit earnings growth last year, fueled by recently completed acquisitions, capturing merger synergies, and organic expansion projects. That gave the company the fuel to increase its dividend by another 4%, boosting its yield to 5%.
NYSE: OKE
Key Data Points
Oneok expects its growth rate to slow considerably this year due to fewer catalysts. However, its growth engine should rev back up as new expansion projects come online. Oneok has six high-return organic growth projects under construction, which will begin entering commercial service between mid-year 2026 and mid-year 2028. Meanwhile, it's pursuing additional expansion opportunities, notably to support growing gas demand by data centers, LNG export terminals, and industrial facilities. That should give Oneok the fuel to continue growing its dividend, which it aims to do at a 3% to 4% annual rate.
Rock-solid income stocks
EPR Properties and Oneok generate very durable cash flows. That gives them the funds to pay high-yielding dividends while also investing in expanding their operations. Those growth initiatives should support future dividend increases. This combination of income durability and growth is why I wouldn't hesitate to buy these high-yielding dividend stocks this month.
