Five Reliable High-Dividend Stocks with Strong Yields, Employing Confidence, for Investment in 2025
Investing in the stock market presents countless avenues for individuals looking to grow their wealth, with Wall Street boasting thousands of publicly traded companies and exchange-traded funds (ETFs). Among the myriad options, buying and holding high-quality dividend stocks has a storied track record of success.
These companies, which consistently provide regular dividends to their investors, tend to demonstrate profitability on a recurring basis. Many also offer a clear, long-term growth trajectory. What's more, dividend stocks have historically demonstrated their ability to navigate economic downturns, making them a trustworthy choice for long-term investors.
Strikingly, dividend stocks have outperformed their non-paying counterparts over the past 50 years. As outlined in the report "The Power of Dividends: Past, Present, and Future," dividend stocks delivered an annual average return of 9.17% from 1973 to 2023—an impressive figure achieved while displaying 6% less volatility than the S&P 500. By contrast, non-payers could only muster an annualized return of 4.27%, and displayed 18% more volatility than the benchmark index.
However, not all dividend stocks are created equal. While there are numerous companies that offer regular dividends, only a select few provide a secure payout and yield well above the average S&P 500 yield (1.24%). The following are five secure high-yield dividend stocks that should be on every investor's radar for 2025:
Enterprise Products Partners: 6.28% yield
Despite being in the ultra-high-yield category (with yields greater than four times the average S&P 500 yield), energy company Enterprise Products Partners stands out for its income security. With a yield nearly six times the S&P 500's, and a 26-year history of increasing its base annual distribution, Enterprise is undeniably a worthy contender.
As a midstream operator—essentially an energy middleman that oversees transmission pipelines and storage facilities—Enterprise is less susceptible to market fluctuation than traditional oil and gas companies. With predominantly fixed-fee contracts, the company benefits from reduced exposure to inflation and spot price volatility, leading to highly predictable operating cash flow.
This predictability allows Enterprise to invest aggressively in new energy infrastructure, making strategic bolt-ons and capital projects. One such project is its focus on natural gas liquids, which has prompted a $6.9 billion investment in a dozen major capital projects.
Coca-Cola: 3.11% yield
The consumer staples giant, Coca-Cola, is poised to increase its base annual payout for a 63rd consecutive year in February 2025. With a forward-looking yield of 3.11%, and a rich history of delivering consistent profits and cash flow, Coca-Cola is a solid choice for income-focused investors.
Coca-Cola's product portfolio is vast and diverse, with more than two dozen items generating over $1 billion in annual sales. This geographic diversity extends beyond the U.S., with strong revenue contributions from both emerging and developed markets.
The company's marketing prowess cannot be understated. Leveraging artificial intelligence (AI) and well-known brand ambassadors, Coca-Cola successfully connects with multiple generations of consumers. According to the annual "Brand Footprint" report from Kantar, Coca-Cola has been the most-chosen product from retail shelves for 12 consecutive years.
Realty Income: 5.74% yield
Realty Income is a retail real estate investment trust (REIT) that focuses on standalone, resilient retailers and offers an attractive dividend yield of 5.74%. Boasting an impressive track record of 30 consecutive years of dividend increases, Realty Income pays its investors monthly, ensuring a steady income stream.
The REIT's focus on standalone retailers, such as grocery stores, drug stores, and dollar stores, ensures that its funds from operations remain stable and predictable, regardless of market conditions. With median occupancy rates of 98.2% proving consistently high, Realty Income offers investors a reliable source of income over the long term.
The company has also been aggressive in expanding its horizons. Its recent acquisition of Spirit Realty Capital for $9.3 billion positions Realty Income to tap into new verticals and grow its customer base, boosting its long-term profit potential.
York Water: 2.8% yield
York Water is a water utility company that has been continuously paying dividends to shareholders for over 208 years. With a dividend yield of 2.8% and a market cap of just $452 million, this stock may fly under the radar for many investors, but its long-term income potential cannot be ignored.
As a regulated utility, York Water is insulated from price fluctuations, offering investors a stable source of income. Its monopoly or duopoly status in the areas it serves reduces the risk of losing customers, further bolstering the reliability of its income stream.
With a focus on maintenance and new infrastructure, York Water has been proactive in growing its customer base and improving its long-term profit potential. Its recent acquisitions reflect its commitment to expansion and growth, making it an attractive choice for income-focused investors.
Johnson & Johnson: 3.35% yield
Healthcare conglomerate Johnson & Johnson, also known as J&J, boasts a forward-looking dividend yield of 3.35%. With a 62-year history of dividend increases, J&J should be a staple in any income investor's portfolio.
Home to numerous well-known brands, such as Band-Aid, Tylenol, and Neutrogena, J&J has a strong presence in the pharmaceutical and medical device industries, providing investors with consistent profits and income.
During economic downturns, healthcare stocks have often proven to be resilient, as there is always a demand for prescriptions and medical devices. Plus, the company's shift towards higher-margin drug development in recent years has further bolstered its financial performance and income potential.
In summary, while the performance of dividend stocks may vary depending on market conditions and economic cycles, these five high-yield dividend stocks offer investors a reliable source of income and strong potential for long-term growth. By focusing on companies that consistently deliver profits and offer secure, growing dividends, investors can build a stable, diversified portfolio that weather economic downturns with confidence.
Investors interested in long-term growth might consider these high-yield dividend stocks, such as Enterprise Products Partners with a yield of 6.28%, as they typically demonstrate profitability and resilience during economic downturns. Similarly, Johnson & Johnson, with a yield of 3.35%, has a 62-year history of dividend increases and is often resilient in economic downturns due to the demand for healthcare products.
