The 10-Year Treasury Yields 4.91%. These 4 Dividend Stocks Pay More

Income stocks now have to beat a 10-year Treasury yielding 4.91%, a payout with no credit risk and no fuss. The four names below pay more than that today. Each one also supports its payout with real coverage and cash flow, and each has a history of raising it, which a fixed Treasury coupon never does. Two are master limited partnerships that send K-1 tax forms instead of 1099s, one is a casino and experiential REIT, and one is a tobacco company that throws off huge amounts of cash. All four just reported quarterly results that support the next check.

Enterprise Products Partners: Fortress Coverage From a Midstream Giant

Enterprise Products Partners (NYSE:EPD | EPD Price Prediction) trades at $37.34 per unit and pays an annualized distribution of $2.24. That works out to a yield of about 5.99%, which puts this high-yield partnership comfortably ahead of the 10-year.

Dividend safety: Coverage is where Enterprise stands out. Distributable cash flow from operations rose 27% year over year to $2.3 billion, covering the distribution 1.9x and leaving $1.1 billion of retained cash for reinvestment. Over the past 12 months, distributions plus buybacks totaled $5.3 billion, just 54% of adjusted cash flow from operations. Net leverage stands at 2.9x, inside the partnership’s target of 2.7x to 3.25x, and about 96% of debt is fixed rate. The quarterly distribution has stepped up every year in the available record, from $0.425 in 2018 to $0.56 now, and the latest payout is 2.8% higher than a year ago.

Bull case: Enterprise has $6.3B of growth projects under construction through 2028, and Permian processing intake volumes reached a new high of 4.6 Bcf/d. Asked about the Houston Ship Channel LPG expansion, management said: “It is full. We have contracted it.” That backlog supports the edge these units hold over a Treasury: a rising payout plus price gains. The units are up 29.72% over the past year.

Risk: Part of Enterprise’s earnings comes from marketing margins that move with commodity prices, and mark-to-market hedging losses can make quarterly results uneven.

Altria: Six Decades of Raises Backed by Tobacco Cash Flow

Altria (NYSE:MO) trades at $78.15 and pays an annualized dividend of $4.44, a yield of about 5.68%. The stock has gained 42.11% year to date, which has pulled the yield down. It still tops the Treasury bar.

Dividend safety: Altria raised its full-year adjusted EPS guidance to $5.66 to $5.74, which comfortably covers the $4.44 annualized dividend. Debt-to-EBITDA was 1.9x, in line with the company’s target of about 2x. Shareholders’ equity is negative $2.23B, reflecting years of buybacks. Solvency looks sound, since the company generated enough cash to return $5.3 billion in dividends and $735 million in buybacks over the first nine months of the year. The board’s latest hike raised the quarterly dividend 4.7% to $1.11 per share, which the company calls its 61st dividend increase in 57 years.

Bull case: Pricing power keeps margins high. Smokeable adjusted operating companies’ income margins reached 64.5%, and on! pouch volume rose 13.3%. Equity income from Altria’s beer interest jumped to $228M from $123M. Management also reaffirmed its goal of mid-single-digit annual dividend-per-share growth through 2028. That growth is Altria’s main advantage over a Treasury, since a bond coupon stays flat while this dividend has risen every year for decades. The company’s CFO, Heather Newman, said on the call: “We remain committed to providing significant cash returns to our shareholders as demonstrated by our recent dividend increase.”

Risk: Cigarette volumes keep shrinking. Domestic cigarette shipments fell an estimated 4% on an adjusted basis, and Marlboro’s retail share slipped 1.0 pt to 39.5% as smokers traded down to discount brands.

VICI Properties: Inflation-Linked Rent and an Ultra-High Yield

VICI Properties (NYSE:VICI) trades at $24.85 and pays an annualized $1.84, an ultra-high yield of about 7.40%. Part of that yield comes from a share price that is down 6.93% year to date.

Dividend safety: Management calls the dividend “very well covered,” with an AFFO payout ratio of about 75% based on the midpoint of its guidance. VICI raised that full-year AFFO guidance to $2.47 to $2.48 per diluted share. Third-quarter AFFO of $0.62 missed the $0.72 estimate but still rose 4.3% year over year. Net debt to adjusted EBITDA is about 4.8x, below the REIT’s 5x to 5.5x target, and VICI holds investment-grade ratings from Moody’s, S&P, and Fitch. The latest raise to $0.46 per quarter marked its ninth consecutive year of dividend growth, up from $0.2875 in 2019.

Bull case: VICI’s properties are 100% occupied under triple-net leases with a weighted average term of 39.4 years. Those leases include 2.0% annual escalators and CPI-linked bumps, which gives this payout a built-in inflation hedge that a Treasury coupon can’t match. VICI’s board authorized its first buyback, for up to $2 billion. Chief executive Ed Pitoniak said on the call, “We do believe that there is great value in having that amount of free cash flow in and around the 75% level.”

Risk: Two tenants dominate the rent roll, at 38% and 32% of annualized rent. Of the quarter’s $458 million non-cash credit loss allowance, $313 million was tied to the largest tenant, and management is reviewing that tenant’s regional lease.

MPLX: Double-Digit Raises at the Top of the Yield Table

MPLX (NYSE:MPLX) trades at $57.50 with an annualized distribution of $4.8444. That’s an ultra-high yield of about 8.43%, the highest in this group.

Dividend safety: Distribution coverage is 1.3x, supported by $1.54B of quarterly distributable cash flow and adjusted EBITDA of $1.86B. Leverage is 3.8x, below the partnership’s target of about 4.0x. Its sponsor, Marathon Petroleum (NYSE:MPC), holds about 647 million of the roughly 1,013 million common units, so the sponsor’s interests line up with unitholders’. The quarterly payout rose to $1.2111 from $1.0765, up from $0.705 in 2022. Chief executive Maryann Mannen said the hike “marks the fifth consecutive year of double-digit increases.”

Bull case: MPLX is putting $2.9B of growth capital to work, with more than 90% aimed at Permian and Marcellus gas and NGL infrastructure at expected mid-teens returns. Blackcomb Pipeline, the BANGL expansion, the Titan Complex and Bay Runner are all scheduled to come online in the fourth quarter, and management expects “2027 EBITDA growth to be stronger than 2026.” For an income investor, that means a payout growing far faster than inflation, with a starting yield well above the 10-year.

Risk: MPLX is selling the logistics assets tied to two refineries for $750 million, and management acknowledged that “the loss of this EBITDA may impact another year of 12.5% distribution growth.” However, it still expects a significant increase.

Four Ways to Beat Treasuries Without Chasing Risky Yield

All four companies pay more than the 4.91% 10-year, and each covers that payout with real buffer: 1.9x coverage at Enterprise, EPS guidance well above Altria’s dividend, roughly 75% AFFO payout at VICI, and 1.3x coverage at MPLX. What sets them apart from a Treasury is growth, driven by signed midstream projects, decades of tobacco dividend raises, and CPI-linked casino rents. A bond pays a fixed coupon until maturity, while all four of these companies have raised their payouts this year.

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