5 Defensive Dividend Stocks Yielding Up to 8.7% for Retirement Income
Recessions punish shaky payouts, but some companies keep collecting cash anyway. From power lines to pipelines to pill bottles, five low-beta names promise income, yet one of them runs coverage tighter than the rest. Which one deserves your trust?
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
When the economy weakens, the most resilient payouts come from businesses that keep taking in cash anyway. These five fit that description: regulated electric rates, long-term net leases, fee-based pipelines, blockbuster drug products, and a delivery network the economy can’t run without. Every one carries a beta below 1, and Bristol-Myers Squibb’s beta of 0.186 (NYSE:BMY | BMY Price Prediction) is the lowest. Forward yields run from roughly 3.1% to 8.7%. Below, dividend safety comes first and yield second.
| Company | Forward Yield | Annualized Dividend | Beta |
|---|---|---|---|
| American Electric Power (NASDAQ:AEP) | 3.1% | $3.88 | 0.442 |
| W. P. Carey (NYSE:WPC) | 5.8% | $3.80 | 0.766 |
| MPLX (NYSE:MPLX) | 8.7% | $4.8444 | 0.454 |
| Bristol-Myers Squibb | 4.1% | $2.52 | 0.186 |
| United Parcel Service (NYSE:UPS) | 6.1% | $6.56 | 0.948 |
American Electric Power: Data Center Demand Powers a Rising Payout
American Electric Power just raised its quarterly dividend to $0.97 from $0.95. That puts the annualized rate at $3.88, a forward yield of about 3.1% at the current $126.53. The stock goes ex-dividend on November 10, 2026, and the payment follows on December 10.
Dividend safety: The annual payout is about 62% of the low end of 2026 operating EPS guidance ($6.25 to $6.55), and management now expects to land at or above the high end of that range. AEP’s dividend record shows continuous quarterly payments going back to 1999. It raised the quarterly rate every year from 2020 through 2026, taking it from $0.70 to $0.97. Regulated rates make the earnings stream predictable, and a 0.442 beta shows the stock trades like it.
Bull case: In the third quarter, adjusted operating EPS came in at $2.23 versus the $2.04 estimate, and revenue rose 13.7% to $6.83 billion. AEP signed 15 GW of new load commitments in the quarter as data centers, hyperscalers and manufacturers lined up for power. Management expects 9% to 11% annual operating EPS growth through 2031 and a rate base of $162 billion by 2031. Take-or-pay contracts with large-load customers could provide up to $21 billion of fixed-cost offsets. Here is how the CEO framed it: “AEP is entering our next phase of growth from a position of strength.” The stock trades at a forward P/E of 18, and the consensus analyst target is $142.72.
Risk: The five-year capital plan has grown to $100 billion through 2031, so AEP will keep tapping debt and equity markets. If data center demand falls short or regulators push back on customer bills in rate cases, that spending could get ahead of earnings.
W. P. Carey: A Net-Lease Landlord Raising Its Payout Every Quarter
W. P. Carey pays $0.95 per quarter, or $3.80 annualized. At $65.05 a share, that works out to a high yield of about 5.8%.
Dividend safety: The payout uses about 73% of the low end of raised 2026 AFFO guidance of $5.23 to $5.29 per share, which is comfortable for a REIT. Occupancy stands at 98.6% across 1,755 properties and 383 tenants, with a weighted-average lease term of 12.0 years. Leverage stands at 5.5x net debt to EBITDA, and 95% of debt is fixed-rate at a 3.2% weighted average. On track record, W. P. Carey adjusted its dividend in 2023, cutting the quarterly payment from $1.071 to $0.86 after spinning off its office assets. Since then, it has raised the payout every quarter, to today’s $0.95.
Bull case: In the third quarter, AFFO rose to $1.33 per share from $1.25. The company has invested $1.6 billion year to date at a 7.5% going-in cap rate, well above its cost of debt. The CEO said, “AFFO per share growth will approach 6% this year.”
Risk: Refinancing now costs more. W. P. Carey issued 5.200% notes due 2036 to replace 4.250% notes, with one-time rent relief expected in the fourth quarter. Europe accounts for 33% of base rent, which adds currency risk.
MPLX: Ultra-High-Yield Distributions With 1.3x Coverage
MPLX raised its quarterly distribution 12.5% to $1.2111 per unit, or $4.8444 annualized. At $55.91, that’s a yield of about 8.7%, the fattest on this list.
Dividend safety: Distribution coverage is 1.3x on third-quarter distributable cash flow of $1.54 billion. Leverage of 3.8x is below management’s roughly 4.0x target, and $1.0 billion is still available under the buyback authorization. This is the third consecutive year of 12.5% hikes, and the quarterly payout has risen from $0.6875 in 2021 to the current level. The units carry a beta of 0.454.
Bull case: Adjusted EBITDA rose 5.3% to $1.86 billion. MPLX is putting $2.9 billion of growth capital to work, with more than 90% going into Permian and Marcellus gas and NGL infrastructure at expected mid-teens returns. The BANGL expansion, the Titan processing expansion, Blackcomb, and Bay Runner are all scheduled to enter service in 4Q26. The CEO pointed to the “durability of our cash flows” as the reason for the raise.
Risk: MPLX is a partnership, so unitholders get a K-1 instead of a 1099. It also depends heavily on its refining sponsor, which holds about 647 million of roughly 1,013 million common units. Net interest costs rose to $300 million from $243 million, and the units fell 5.05% over the past week.
Bristol-Myers Squibb: Big Pharma’s Lowest-Payout Income Play
Bristol-Myers Squibb pays $0.63 per quarter, or $2.52 a year. At $62.14, the forward yield is about 4.1%.
Dividend safety: Of the five picks, Bristol-Myers has the most room in its payout. The annual dividend is roughly 40% of the low end of 2026 non-GAAP EPS guidance of $6.35 to $6.55. Operating cash flow was $4.2 billion in the third quarter, and the company held $13 billion in cash against roughly $42.9 billion of total debt. The quarterly dividend has gone up every year from 2010 through 2026, rising from $0.32 to $0.63. At 0.186, its beta is the lowest in this group. The finance chief reaffirmed the company’s “commitment to the dividend” on the earnings call.
Bull case: Non-GAAP EPS of $1.35 beat the $1.23 estimate, the sixth consecutive beat. The Growth Portfolio rose 12% to $7.66 billion, and the company now has eight growth portfolio medicines each running at an annualized pace above $1 billion. Even after rising 20.3% this year, the shares trade at a forward P/E of just 9.
Risk: Management expects Eliquis revenue to drop by $1.5 billion to $2 billion in 2027 as its loss-of-exclusivity cycle begins. Legacy drugs are already contracting fast, with Revlimid down 47%, and third-quarter operating cash flow fell 33.5% year over year.
United Parcel Service: Ultra-High Yield With Coverage on the Mend
United Parcel Service pays $1.64 per quarter, or $6.56 annualized. At $108.29, the yield is about 6.1%, just over the ultra-high-yield line. The next payment is scheduled for December 3, 2026.
Dividend safety: Coverage is tighter here than anywhere else on the list, but it is getting better. UPS expects to pay about $5.4 billion in dividends this year against roughly $6.1 billion of free cash flow, which means dividends draw about 89% of it. That free cash flow figure already includes $1.4 billion spent on the Driver Choice buyout, and that cost disappears in 2027. The dividend is about 90% of the roughly $7.28 in adjusted EPS guided for 2026. UPS ended the quarter with $6.8 billion in cash and no outstanding commercial paper. The quarterly dividend has risen from $0.17 in 2000 but has stayed flat at $1.64 for the latest eight payments. The CEO told analysts, “Our dividend is safe and secure.”
Bull case: Package delivery is an essential service, and UPS is moving toward more profitable shipments. Healthcare revenue topped $3 billion for the third consecutive quarter. Third-quarter adjusted EPS of $1.69 beat the $1.62 estimate. U.S. revenue per piece rose 6.1%, and the domestic adjusted operating margin improved to 7.0% from 6.4%. Management targets about 10.5% domestic margin in the fourth quarter. The stock trades at a forward P/E of 14.
Risk: On GAAP trailing EPS of $5.19, the payout ratio is about 126%, so the recovery needs to keep working. Transformation costs of $1.4 billion to $1.6 billion are still ahead, and the Teamster contract ends August 1, 2028.
Five Payouts Built to Hold Up When Markets Get Rough
AEP and Bristol-Myers anchor this basket with conservative payout ratios and decades of quarterly dividends. W. P. Carey and MPLX add higher yields backed by contractual cash flow, and UPS rounds it out with a 6.1% yield whose coverage improves once restructuring cash costs fall away in 2027. The five companies earn their money from different sources, so no single slowdown threatens every payout at once. Safety screening matters most at the top of the yield table, which is why we laid out what to watch for when a big payout is about to be cut in a free dividend trap guide. Watch for MPLX’s fourth-quarter project startups, Bristol-Myers’ Eliquis transition, and UPS’s 2027 free cash flow.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
