Investing

5 of the Safest High-Yield Dividend Stocks

Lee Jackson

Published: January 11, 2024 11:07 am

Last Updated: January 11, 2024 5:40 pm

After years of a low-interest rate environment, which has reversed in a big way over the last 22 months but is once again trending lower, many investors continue to turn to equities not only for the growth potential but also for solid and dependable dividends, which help to provide an income stream. This equates to total return, one of the most influential investment strategies.

We always like to remind our readers about the impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Again, total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

We screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay big dividends, are growing their business faster than the average company that is a competitor, and pay big and dependable dividends that are safe ideas for investors now. Five companies look like outstanding ideas now.

Altria

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This maker of tobacco products offers value investors a great entry point now and pays a massive 9.35% dividend. Altria Group Inc. (NYSE: MO)  Through its subsidiaries, it manufactures and sells smokeable and oral tobacco products in the United States.

The company provides cigarettes primarily under the Marlboro brand;

• Cigars and pipe tobacco, principally under the Black & Mild brand
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches.

The company enjoys a 51% share of the US cigarette market. It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria also owns over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer, which some feel is worth more than $10 billion and may be a segment of the company that could be sold.

Kohl’s

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This top retailer got hit in early October and still offers an excellent entry point, yielding 7.36%. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States. It provides private label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers. The company also sells its products online at Kohls.com and through mobile devices.

The company provides its products primarily under the brand names of:

• Croft & Barrow
• Jumping Beans
• SO
• Sonoma Goods for Life
• Food Network,
• LC Lauren Conrad
• Nine West
• Simply Vera Vera Wang.

Kohl has a partnership where Amazon customers can return items through the retailer. Some feel the deal should be expanded with a full partnership or even Amazon buying Kohl’s.

MPLX

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This company is one of the top holdings in the Alerian MLP energy exchange-traded fund, paying shareholders a strong 9.27% dividend. MPLX LP. (NYSE: MPLX) is primarily engaged in transporting crude oil and refined products and terminating in the US Midwest and Gulf Coast regions and natural gas gathering and processing in the northeast. Independent US refiner Marathon Petroleum Corp (NYSE: MPC) formed MPLX.

The company’s assets include:

• A network of crude oil and refined product pipelines
• An inland marine business
• Light-product terminals
• Storage caverns
• Refinery tanks
• Docks
• Loading racks and associated piping
• Crude and light-product marine terminals

MPLX also owns crude oil and natural gas gathering systems, pipelines, and natural gas and NGL processing and fractionation facilities in key U.S. supply basins.

Sabra Healthcare

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This is one of the larger companies in the industry and pays a massive 8.68% distribution. Sabra Healthcare REIT, Inc. (NASDAQ: SBRA) is an internally managed healthcare REIT that invests in skilled nursing (SNF) and senior housing.

Sabra’s investment portfolio included:

• 377 real estate properties held for investment
• 240 Skilled Nursing/Transitional Care facilities
• three senior housing communities
• Senior Housing – Leased 61 senior housing communities operated by third-party property managers under property management agreements
• Senior Housing – Managed 18 Behavioral Health facilities
• 15 Specialty Hospitals and Other facilities,
• 12 investments in loans receivable (consisting of two mortgage loans and ten other loans
• five preferred equity investments and two investments in unconsolidated joint ventures

As of September 30, 2023, Sabra’s real estate properties held for investment included 37,606 beds/units spread across the United States and Canada.

Western Union

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While the demand for telegrams is long gone, the demand to transfer money has exploded, and this famous company has grown as a result and pays a sweet 7.64% dividend. The Western Union Company (NYSE: WU) provides worldwide money movement and payment services.

The company operates in two segments:

• Consumer-to-Consumer
• Business Solutions

The Consumer-to-Consumer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations and through websites and mobile devices.

The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border and cross-currency transactions for small and medium-sized enterprises, other organizations, individuals, and foreign currency forward and option contracts.

Western Union also offers bill payment services that facilitate payments from consumers to businesses and other organizations, as well as money orders and other services.