Three high-dividend stocks offering an average yield of 6.72%, making them strong investment options for August.
In the world of investing, high-yield dividend stocks have long been a popular choice for those seeking stable returns and a reduced risk profile. These stocks, such as Pfizer, Realty Income, and Enterprise Products Partners, offer a range of benefits that make them attractive to investors.
Pfizer, a leading pharmaceutical company, boasts a yield of 7.39%, with its yield soaring to almost 7.4% due to weakness in its shares over the last three years. The company's success can be attributed to its ability to develop a vaccine (Comirnaty) and oral therapy (Paxlovid), which led to more than $56 billion in combined COVID-19 therapy sales in 2022. Despite a decline in sales from these two drugs in 2023, total sales, including COVID-19 treatments, surged by 52% between 2020 and 2024.
Realty Income, a premier retail real estate investment trust (REIT), is another high-yield dividend stock worth considering. The company is trading at 12.4 times estimated cash flow for 2026, representing a 22% discount to its average multiple to cash flow over the past five years. Realty Income leases to stand-alone businesses that drive foot traffic in any economic climate, and 91% of the total rent derived from its commercial real estate (CRE) assets is "resilient to economic downturns and/or isolated from e-commerce pressures."
Enterprise Products Partners, an energy giant, offers cash flow predictability due to its fixed fee contracts. The company is currently yielding 7.03% and has raised its payout in each of the last 27 years. Enterprise Products Partners also has several major projects under construction, totaling $5.6 billion in expenditures, which are expected to be operational by the end of 2026 and be accretive to the company's cash flow.
The historical success of high-yield dividend stocks compared to nonpayers can be attributed to several key factors. These include consistent profitability and recurring earnings, reduced volatility, superior total returns, time-tested business models, the reinvestment effect, and lower payout risk with management discipline. According to research in The Power of Dividends: Past, Present, and Future, dividend-paying stocks averaged a 9.2% annual return between 1973 and 2024, outpacing nonpayers’ 4.31% annualized returns while being less volatile.
In conclusion, Pfizer, Realty Income, and Enterprise Products Partners are prime examples of high-yield dividend stocks that offer investors a range of benefits, including steady earnings, lower volatility, and the potential for long-term growth. As always, it's essential to conduct thorough research and consider your investment goals before making any decisions.
- Investing in Pfizer, Realty Income, and Enterprise Products Partners, all known for their high-yield dividends, might provide a stable financial return for those seeking lower risk profiles in personal-finance decisions due to their consistent profitability and reduced volatility.
- Finance experts often recommend considering Realty Income as a valuable choice for investors due to its low trading price relative to estimated cash flow for 2026, offering potential return on investment and a stable income source even in economic downturns.
- If you're looking to diversify your investment portfolio in money management, you might find interest in Enterprise Products Partners, an energy company with a long-standing tradition of consistent payouts, fixed fee contracts, and major projects under construction that promise further growth and increased cash flow.
