Investing in high-yielding dividend stocks has always been great way to grow your wealth.
Such stocks allow investors to profit in two ways: one, through potential appreciation of the stock price, and two, through dividend distributions.
In fact, here are seven of the top high-yielding stocks you may want to consider.
Better, many dividend paying companies also have a good amount of cash and hand, and are typically strong companies with good prospects for long-term growth.
Best of all, a dividend paying company often raises its dividend payout as it grows. High-yielding stocks tend to have slower growth, but for those who need income now, the cash comes in mighty handy.
Currently, the S&P 500 companies average a 1.5% yield. That averages both high payers as well as companies that pay no dividend at all.
We’ve narrowed the list of hundreds of dividend paying stocks to seven of the top high-yielding stocks you may want to consider buying now:
High Yielding Stock No. 1 – Verizon Communications (VZ) carries a dividend yield of 7.8%
Telecommunications stock Verizon Communications pays a dividend yield of 7.8%.
It’s one of a handful of U.S. cellular carriers. Generally, companies that have just a few competitors tend to be more profitable. And the cell networks are no exception.
However, shares of these companies dropped in July 2023, amid concerns that legacy landlines contained lead. While the environmental impact is unclear, typically companies dealing with these issues have years to resolve them, and often don’t have to carry the full costs.
In the meantime, that fear has sent Verizon to just 6 times earnings – and pushed the stock’s dividend yield to nearly 8 percent.
The company maintained its full-year earnings forecast in late July. So chances are today’s buyers can get a big payday and some upside in shares when the current environmental fears are resolved.
High Yielding Stock No. 2 – Williams Companies Inc. (WMB) has a dividend yield of 5.3%
With a yield of 5.3%, WMB operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments.
According to analysts at Clear Bridge Investments:
“We are meaningfully overweight energy, particularly within North American energy infrastructure. Enbridge and Williams, our two infrastructure holdings, possess crown jewel infrastructure assets. They each deliver meaningful proportions of the overall energy produced and consumed in North America.”
“Their revenues are backed by long-term contracts with high-quality counterparties and have little direct commodity price exposure. Their growth has been driven by the increasing production of North American energy. The advent of unconventional oil and gas production (oil sand and shale) has made North America a low-cost competitor on a global basis. We expect strong North American production to be an enduring feature of global energy supply for decades to come,” they added.
Energy infrastructure is crucial for the health of the economy. And it’s expected to grow in the U.S. by 2 percent annually through 2030, with above-average demand for natural gas. That fits in perfectly with Williams, and should allow the company to increase its already-high dividend payment.
High Yielding Stock No. 3 – NextEra Energy (NEE) has a dividend yield of 2.60%
Demand for utility services will always remain intact, even in the worst of times. Combined with a region with a growing population, however, and it can also be a growth play in addition to providing a steady source of income.
In this space, the top player may be none other than NextEra Energy.
Why? For starters, the company provides a basic need service – electricity. More importantly, the company operates primarily in Florida, a state with the largest population growth over the past decade. That creates rising demand for energy use.
Earnings have also been solid, with the utility trading at about 18 times earnings. That’s a slight discount to the overall market.
While NextEra’s dividend is a bit below average, rising demand on NEE’s network should lead to rising earnings – which can lead to dividend increases over time.
High Yielding Stock No. 4 – Iron Mountain (IRM) carries a dividend yield of 4.1%
With years of dividend increases, Iron Mountain carries a dividend yield of 4.1%.
Originally in the business of providing document destruction and shredding services, Iron Mountain has expanded into data storage, and even data center infrastructure.
That can allow the company to profit from the ongoing paperwork generated by corporations that need to be retained or destroyed, as well as digital data as well.
To that end, Iron Mountain has structured itself as a real estate investment trust (REIT). That allows it to pay out 90 percent of its earnings to its investors in the form of dividends, keeping their taxes low.
Given how much data continues to be created, Iron Mountain is likely to be a major beneficiary of that trend in the years ahead. So chances are the company’s dividend, while already above average, can continue to rise in time.
High Yielding Stock No. 5 – Universal Corp. (UVV) carries a dividend yield of 6.5%
Tobacco company, Universal Corp. carries a yield of 6.5% at the moment.
Typically, tobacco companies offer high yields. They produce a product with a high profit margin. While growth has slowed in recent decades given the health concerns over smoking, Universal has been able to still pay out handsomely for investors.
Today, shares trade under their book value, and at about half their price-to-sales ratio. So there could be some upside potential in addition to the big dividend payment now.
Plus, Universal has a history of growing its dividend payout over time. So those who buy today could see even more income coming in tomorrow.
High Yielding Stock No. 6 – Kinder Morgan (KMI) has a dividend yield of 6.35%
High dividend stocks like Kinder Morgan are a great way to offset inflation.
Kinder Morgan is one of the largest infrastructure companies in North America. It owns and controls thousands of miles of oil and gas pipelines, as well as terminals.
With a dividend yield of 6.35%, the company already pays well. But it’s also looking to increase its payout over time. A company that can grow its earnings and pay a higher dividend can likely see its share price appreciate as well.
The company also continues to be one of the most stable, with enough cash cover its dividend.
Also, much like the rest of the energy sector, it’s starting to pivot toward lower carbon energy sources, which could provide it with solid growth opportunities.
High Yielding Stock No. 7 – WP Carey Inc. (WPC) carries a dividend yield of 5.89%
WPC is a net lease real estate investment trust (REIT) that buys properties directly from companies, and then leases them back to an oftentimes reliable tenant.
It’s also called a lease-back. Under a leaseback, WP Carey extracts 100% of the property’s value and converts an otherwise illiquid asset into working capital. That way, they can reinvest in its business, pay dividends, or pay down debt. Plus, they still maintain operational control of the property.
It’s good for investors too, given the stock’s 5.9 percent yield.
Even better, nearly all of WP Carey’s rental agreements include contractual rent increases for inflation. About 60% of the agreements are tied to the consumer price index. That’s allowed the company to sidestep the sharp jump in inflation that hit many other real estate companies hard over the past few years.
Well diversified with industrial, warehouse, office, retail, and self-storage, the REIT can likely pay a growing dividend in addition to offering a current high yield now.