Buy These 3 High-Yield Dividend Stocks Today and Sleep Soundly for a Decade

Investing in dividend stocks can provide a steady income stream and capital appreciation over the long term. In today's uncertain market, focusing on reliable, high-yield dividend stocks can offer peace of mind and a solid foundation for your portfolio. Here are three high-yield dividend stocks that can help you sleep soundly for a decade.

1. AbbVie (ABBV)
AbbVie is a pharmaceutical company that has consistently increased its dividend since its 2013 spinoff from Abbott Labs. With a current dividend yield of 3.8%, AbbVie offers a high income stream supported by strong fundamentals. The company's earnings have grown at a 13.3% CAGR since 2013, and its debt-to-equity ratio of 0.64 indicates a healthy balance sheet. Free cash flow has grown at a 10.5% CAGR, covering the dividend 1.8x.


AbbVie's impressive dividend growth track record, coupled with its strong pipeline and acquisition strategy, suggests a sustainable long-term dividend growth rate. The company's dividend payout ratio of 60% is within the range of its peers and the broader market, indicating a stable and sustainable dividend policy.

2. AvalonBay Communities (AVB)
AvalonBay Communities is a real estate investment trust (REIT) that specializes in apartment ownership. With a current dividend yield of 3.7%, AvalonBay offers a high income stream backed by stable rental income and strategic expansion. The company's earnings have grown at a 9.2% CAGR, with a debt-to-equity ratio of 0.76. Free cash flow covers the dividend 2.5x.


AvalonBay has grown its dividend at a 5% annual rate since its 1994 IPO, raising it by 3.8% in early 2023. The company's dividend payout ratio of 75% is within the range of its peers and the broader market, suggesting a manageable and sustainable dividend policy.

3. Brookfield Infrastructure (BIP)
Brookfield Infrastructure is a global infrastructure company that owns and operates a diversified portfolio of assets. With a current dividend yield of 5.1%, Brookfield Infrastructure offers a high income stream supported by stable cash flow and organic growth. The company's earnings have grown at a 10.4% CAGR, with a debt-to-equity ratio of 0.56. Free cash flow covers the dividend 2.8x.


Brookfield Infrastructure has delivered its 14th straight yearly payout increase, with a dividend payout ratio of 65%. The company expects to increase its payout at an annual pace of 5% to 9% over the long term, driven by organic growth and acquisitions. Its organic growth drivers, such as inflation-linked rate increases, volume growth, and expansion projects, are expected to grow its funds from operations (FFO) by more than 10% per share over the next few years.


In conclusion, investing in high-yield dividend stocks like AbbVie, AvalonBay Communities, and Brookfield Infrastructure can provide a steady income stream and capital appreciation over the long term. These companies offer strong fundamentals, consistent dividend growth, and stable payout ratios, making them ideal investments for income-focused portfolios. By focusing on reliable, high-yield dividend stocks, you can sleep soundly for a decade, knowing that your investments are generating consistent returns and supporting your financial goals.