As a long-term income investor, I’ve always enjoyed quality, high-yield dividend stocks. Dividend stocks offer the rare combination of income and capital growth that compensates for the missing realized income you might have if you did sell the stock.
A portfolio containing high-yield dividend stocks ensures that even during retirement, as long as the company pays dividends, you will still have some spending power.
To come up with the three companies on this list, the companies will all have the following criteria:
- Operating in defensive sectors like healthcare, utilities, and consumer staples,
- Offering dividend yields of >7%, and
- Have a market cap of at least $2 billion.
The high-yield dividend stocks on this list are organized by the dividend yield in descending order.
NextEra Energy Partners (NEP)
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Known for its work in the renewable energy sector, NextEra Energy Partners (NYSE:NEP) has also built a reputation as a solid dividend stock to invest in, thanks to its exemplary history of returning cash to its shareholders.
The utility company has continuously expanded its renewable energy footprint through NEP OpCo’s investments in wind facilities. NextEra Energy Partners, a limited partnership, owns 48.6% of NEP OpCo. In addition, its portfolio of energy assets includes solar, wind, a stand-alone battery storage project, and natural gas assets.
NextEra Energy Partners offers a 11.35% dividend yield with a forward annual dividend of $3.57 — pretty solid compared to other utility stocks.
On the financials side, the company recently reported a Q1’24 revenue growth of 4.90% compared to the same quarter last year. In addition, NextEra Energy Partners reported a turnaround in its net income, rising to $70 million from its net loss of $14 million. With its growing revenue and increasing dividends, NEP is a strong contender for safe dividend stocks.
Altria Group (MO)
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Tobacco stocks may carry some stigma with some investors, but those looking into Altria Group Inc. (NYSE:MO) might think twice before passing on this Dividend King.
Altria is mainly known as the maker of tobacco brands like Marlboro and Philip Morris and operates as a holdings company in the consumer staples sector. It holds a record of 54 years of consistent dividend increase, ranking it among Dividend Kings.
As per financials, revenue shrank by 2.5% in Q1FY’24. However, basic EPS grew 21% in the same period. CEO Billy Gifford highlighted progress toward the company’s vision and promising early momentum from NJOY, Altria’s e-cigarette subsidiary.
The company continues its commitment to enhancing shareholder returns by selling a portion of its investment in ABI, expanding its share repurchase program, and consistently paying dividends.
Altria offers an 8.73% dividend yield and an annual dividend rate of $3.92, a rare feat for a Dividend King. So, if you want to invest in high-yield dividend stocks that offer consistent income, check out MO.
Atlantica Sustainable Infrastructure (AY)
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Sustainable infrastructures have become an important industry for transitioning to a clean energy economy. Companies like Atlantica Sustainable Infrastructure (NASDAQ:AY) are utility companies that provide the clean energy market with operating facilities for renewable energy assets. These assets are categorized into four main segments:
- Efficient natural gas and heat
- Renewable energy
- Transmission lines
- Water
The company has facilities and development projects in various regions, such as South America, North America, and EMEA.
Atlantica ended FY’23 with a turnaround profit of $43.4 million, compared with a loss of $5.4 million in FY’22. This earning came despite annual revenue decreasing slightly to $1.1 billion.
Atlantica has $235.7 million cash available for distribution and currently pays a forward dividend rate of $1.78, translating to an 8% yield.
With ongoing development projects like the Power Purchase Agreement for a 150 MW PV project in California and a 12% increase in the renewable generation pipeline, AY offers investors the perfect balance for potential capital growth and income for anyone trying to build their portfolios.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
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