3 Dividend Stocks with Fat Yields Above 5% to Buy Now

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Dividend stocks with fat yields are compelling investments for investors seeking regular income. Beyond just receiving steady payouts, reinvesting these dividends can significantly grow your holdings and enhance your overall returns. However, it’s important to focus on companies known for their consistent payments and a history of increasing dividends. The high yield and resilient payouts of these stocks make them appealing, especially in times of economic uncertainty or when interest rates decline.

Among the top dividend stocks, Enterprise Products Partners (EPD), Altria (MO), and Realty Income (O) appear attractive. These companies have fat yields of over 5%. Further, these companies have consistently paid and increased their dividends for years. This reflects the sustainability of their payouts, making them solid choices for generating a steady income.

Dividend Stock #1: Enterprise Products

Enterprise Products Partners (EPD) is a reliable, high-yield dividend stock. The company specializes in midstream energy services and offers gathering, transportation, and processing of crude oil (CBJ25), natural gas (NGH25), and natural gas liquids. The company’s energy infrastructure assets witness solid demand. Moreover, about 90% of its long-term contracts include provisions that safeguard against inflation, ensuring stable cash flow and consistent distribution growth.

Enterprise Products has consistently rewarded its shareholders by increasing its dividend for more than 25 years. In 2024 alone, the company distributed approximately $4.6 billion to investors, marking a total return of $56 billion since its IPO in 1998 through distributions and buybacks.

Looking forward, Enterprise Products remains focused on enhancing cash flow per unit and expanding its midstream energy infrastructure, including recent acquisitions and new processing plants. These strategic moves are poised to bolster future dividend payouts.

Further, Enterprise Products is well-positioned for continued growth with a strong balance sheet and solid liquidity. Wall Street recommends a “Moderate Buy” on Enterprise Products stock. It offers a forward yield of 6.4%.

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Dividend Stock #2: Altria

Altria (MO) is a reliable, high-yield dividend stock. The tobacco giant continues to reward shareholders with higher dividends and share buybacks. Moreover, it continues to pursue growth opportunities, which will drive its future payouts.

Altria’s payouts are supported by the strength in its core smokable products segment, which consistently delivers strong operating income growth. Meanwhile, its oral tobacco segment, particularly its moist smokeless tobacco (MST) brands, remains a steady source of profitability. Together, these divisions provide the foundation for Altria’s ability to pay — and raise — dividends.

It has a history of generous dividend increases. Altria announced a 4.1% dividend increase last year, marking its 59th hike in the past 55 years. Further, it projects mid-single-digit annual dividend growth through 2028.

Altria is well-positioned for future growth. It plans to double its U.S. smoke-free product revenue from $2 billion in 2022 to $5 billion by 2028. This expansion into high-margin, smoke-free products will significantly boost its earnings. Further, its focus on streamlining operations and reducing costs will enable it to maximize shareholder value.

While Wall Street analysts rate Altria as a “Hold,” its 7.6% dividend yield and visibility over future dividend growth make it an attractive option for income investors.

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Dividend Stock #3: Realty Income

Realty Income (O), famously known as “The Monthly Dividend Company,” is a top bet for generating worry-free income. The real estate investment trust (REIT) is a Dividend Aristocrat and pays a monthly dividend of $0.264 per share.

Thanks to its resilient real estate portfolio and high occupancy rate, Realty Income has raised its dividend 126 times in the past 30 years. Moreover, the REIT increased its dividend at a compound annual growth rate (CAGR) of 4.3% during this period.

Realty Income’s payouts are supported by the company’s extensive portfolio of 15,457 real estate properties, which generate strong and stable cash flows. Additionally, the majority of these properties are secured under long-term net lease agreements, providing predictable revenue streams and enhancing financial stability.

Realty Income’s commercial real estate holdings are well diversified, ensuring consistent income generation. Notably, 90% of its rental revenue is either resilient to economic downturns or insulated from disruptions caused by e-commerce trends. The company maintains a high occupancy rate of 98.7% and continues to expand internationally, which will support its future payouts.

The stock has a “Moderate Buy” consensus rating and a compelling forward yield of 5.7%.

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On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.