Buy These 3 High-Yield Dividend Stocks Today and Sleep Soundly for a Decade
AInvestSunday, Nov 3, 2024 1:42 pm ET
2min read
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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.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.