Getting a Tax Refund? 3 High-Yield Stocks to Buy With Your Refund Check.

It's that time of year again when many of us are expecting a tax refund. While it can be tempting to splurge on that windfall, investing your refund in high-yield dividend stocks can provide a more sustainable and lucrative return. Here are three standout picks that offer attractive yields and dividend growth prospects.

1. Enterprise Products Partners (EPD)
- Forward Dividend Yield: 6.59%
- Payout Ratio: 55% (against adjusted cash flow from operations)
- Enterprise Products Partners is a midstream energy company that operates pipelines, storage facilities, and processing plants. The company's diversified portfolio of assets and customers reduces exposure to any single commodity or market. With a strong balance sheet and investment-grade credit rating, EPD maintains a low payout ratio, allowing it to reinvest in growth opportunities while returning cash to shareholders. The company has increased its distribution for an impressive 26 consecutive years, demonstrating its commitment to growing its dividend.

2. Clearway Energy (CWEN.A & CWEN)
- Forward Dividend Yield: 6.58%
- Payout Ratio: 80% to 85% of cash flow
- Clearway Energy is a renewable energy company that owns one of the country's largest clean power generation portfolios. Its wind, solar, battery storage, and natural gas assets produce stable cash flows backed by long-term, fixed-rate power purchase agreements with utilities and large corporate customers. The company aims to grow its high-yielding payout by about 6.8% in 2025 and another 6.5% in 2026. Clearway's strategic relationship with a renewable energy development company supplies it with a steady stream of new investment opportunities, supporting its dividend growth prospects.

3. Brookfield Infrastructure (BIP & BIPC)
- Forward Dividend Yield: 5.12%
- Payout Ratio: 5% (for BIP) and 4% (for BIPC)
- Brookfield Infrastructure is an essential infrastructure company that operates utilities, transport, midstream, and data businesses. The company's diversified portfolio of assets reduces exposure to any single market or commodity. With a strong financial position, Brookfield Infrastructure maintains a low payout ratio, allowing it to reinvest in growth opportunities while returning cash to shareholders. The company has increased its dividend every year since its formation in 2008, growing it at a compound annual rate of 9%. This consistent dividend growth, along with its attractive yield, makes Brookfield Infrastructure an appealing choice for income investors.

Investing your tax refund in these high-yield dividend stocks can provide a steady stream of income and potential long-term capital appreciation. However, it is essential to conduct thorough research and consider your risk tolerance and investment goals before making any investment decisions. Diversifying your portfolio across various sectors and asset classes can help mitigate risk and maximize returns.

In conclusion, investing your tax refund in high-yield dividend stocks like Enterprise Products Partners, Clearway Energy, and Brookfield Infrastructure can provide a lucrative income stream and potential long-term capital appreciation. By carefully selecting stocks with attractive yields, sustainable dividend growth prospects, and strong financial fundamentals, you can build a diversified portfolio that generates consistent income and long-term wealth.