Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and substantial total-return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. For example, 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%. That is, 10% for the stock price increase and 3% for the dividends paid. Baby Boomers seeking dependable passive income and some growth to combat inflation can rely on five strong companies, all of which still offer compelling entry points.
We screened our 24/7 Wall St. high-yield dividend stock research database for companies trading below $20 that offer investors enormous total return potential. While better suited to growth- and income-oriented investors with a higher risk tolerance, all five of these stocks look like solid ideas for cost-conscious investors as we head into 2026. All are rated Buy at top Wall Street firms.
Why do we cover high-yield dividend stocks?
Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations.
AES
AES Corp. (NYSE: AES) is an American utility and power generation company. This conservative utility stock offers a 4.52% dividend yield and considerable upside potential, as it remains expected to be a takeout candidate for Global Infrastructure Partners (GIP), a BlackRock division. AES and its subsidiaries operate as a diversified power generation and utility company in the United States and internationally.
The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.
It uses various fuels and technologies to generate electricity, such as:
- Coal
- Gas
- Hydro
- Wind
- Solar
- Biomass
- Renewables, comprising energy storage and landfill gas
AES owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.
Argus has a Buy rating on the shares with an $18 price target.
Energy Transfer
This is one of North America’s largest and most diversified midstream energy companies. Energy Transfer L.P. (NYSE: ET) is a safe option for investors seeking energy exposure and income, as the company pays a 7.16% distribution yield. This top master limited partnership owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint across all major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
- Complementary natural gas midstream, intrastate, and interstate transportation and storage assets
- Crude oil, natural gas liquids (NGL), and refined product transportation and terminalling assets
- NGL fractionation
- Various acquisition and marketing assets
Following the acquisition of Enable Partners in December 2021, Energy Transfer owns and operates over 114,000 miles of pipelines and related assets in 41 states, spanning all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco L.P. (NYSE: SUN), and the public partner interests and 39.7 million standard units of USA Compression Partners L.P. (NYSE: USAC).
J.P. Morgan has an Overweight rating for the shares with a $21 price target.
Host Hotels & Resorts
Host Hotels & Resorts Inc. (NASDAQ: HST) is the world’s largest publicly traded lodging REIT. This stock will remain in demand as travel continues to pick up in 2026, and investors will receive a 4.13% dividend. This S&P 500 company is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels.
The company owns 76 properties in the United States and five internationally, totaling approximately 43,400 rooms. It also holds non-controlling interests in seven domestic and one international joint venture. A disciplined approach to capital allocation and aggressive asset management guides the company.
Host Hotels & Resorts partners with premium brands such as:
- Marriott
- Ritz-Carlton
- Westin
- Sheraton
- W
- St. Regis
- The Luxury Collection
- Hyatt
- Fairmont
- 1 Hotels
- Hilton
- Four Seasons
- Swissôtel
- ibis
Compass Point has a Buy rating on the stock with a $22 price target.
Plains All American Pipeline
This stock has been locked in a tight trading range and appears poised to break out, while offering a dependable 7.68% dividend yield. Plains All American Pipeline L.P. (NYSE: PAA), through its subsidiaries, engages in the pipeline transportation, terminalling, storage, and gathering of crude oil and natural gas liquids (NGLs) in the United States and Canada.
The company operates in two segments:
- Crude Oil
- Natural Gas Liquids (NGL)
The Crude Oil segment offers:
- Gathering and transporting crude oil through pipelines
- Gathering systems
- Trucks, barges, or railcars
- Terminalling, storage, and other facilities-related services and merchant activities
The Natural Gas Liquids segment provides:
- Gathering
- Fractionation
- Storage
- Transportation
- Terminalling activities
- Ethane, propane, normal butane, iso-butane, natural gasoline, and crude oil refining processes
Weiss has a Buy rating, but no target price was available.
Rithm Capital
With a strong, secure dividend, this stock is a favorite among top Wall Street analysts, offering a hefty 9.32% yield. Rithm Capital Corp. (NYSE: RITM) is a global asset manager focused on real estate, credit, and financial services. The company makes direct investments and operates several wholly owned operating businesses.
Its segments include:
- Origination and Servicing
- Investment Portfolio
- Residential Transitional Lending
- Asset Management
The company’s businesses include Sculptor Capital Management, an alternative asset manager, as well as Newrez and Genesis Capital mortgage origination and servicing platforms.
Sculptor Capital Management offers asset management services and investment products across credit, real estate, and multi-strategy platforms through commingled funds, separate accounts, and other alternative investment vehicles.
Genesis Capital specializes in originating and managing a portfolio of primarily short-term business-purpose mortgage loans to fund single-family and multi-family real estate developers, offering construction, renovation, and bridge loans.
Piper Sandler has an Overweight rating and a $15.50 target price for the shares.
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