Buying and holding high-quality stocks is an excellent way to build wealth over the long term. Stocks represent an ownership, or equity, stake in a company. When the company does well, over time, the shareholders do well. Buying stocks is a tangible way to benefit from the success of some of America’s best companies.
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Over the long run, stocks have provided higher total returns compared to more conservative investments like bank savings vehicles or government bonds. Stocks are considered more aggressive because they fluctuate up and down based on market factors and company performance, but historically they are a good bet over long time horizons.
Capital appreciation, however, is not the only way to make money from stocks. Many stocks pay dividends as well. Dividends are cash payments regularly distributed to shareholders. Some investors use dividends to supplement their incomes and defray current expenses. Others save their dividend income for the future. Many take advantage of compounding by reinvesting their dividends back into the market.
Because dividend income is an important part of a stock’s total return and is usually paid on a predetermined schedule without regard to market fluctuations, dividends can offset temporary downturns. Holders of dividend-paying stocks, in other words, continue to earn even when the market is down.
In short, dividend stocks provide smart investors with a good mix of growth potential, current income, and consistency. Here is a list of seven high-yield dividend stocks to buy today:
| Stock | Forward Dividend Yield* |
| MPLX LP (ticker: MPLX) | 7.6% |
| AllianceBernstein Holding LP (AB) | 8.3% |
| OneMain Holdings Inc. (OMF) | 7.3% |
| Annaly Capital Management Inc. (NLY) | 13.2% |
| Altria Group Inc. (MO) | 7.2% |
| Vale SA (VALE) | 15.2% |
| Verizon Communications Inc. (VZ) | 6.2% |
*As of Dec. 3 close.
MPLX LP (MPLX)
MPLX is an energy company organized as a master limited partnership (MLP). MLPs are partnership units that trade on all major stock exchanges just like shares of common stock do. An MLP avoids taxation on the corporate level by distributing most of its taxable income to shareholders — technically called unitholders — as dividends.
MPLX operates in the midstream segment of the hydrocarbon energy industry. Its main business is storing and transporting liquid natural gas but it also deals in crude oil, heavy oil and other hydrocarbon energy products. The company operates an extensive network of rail lines, shipping tankers, barges and pipelines to accomplish its goals. MPLX is majority-owned by Marathon Petroleum Co. (MPC), a nearly $50 billion company.
MPLX has a current yield of 7.6%.
AllianceBernstein Holding LP (AB)
AB is a publicly traded money manager with a market cap of $4 billion. The company operates through two divisions, asset management and private wealth management.
The firm provides consulting services, wealth management, estate planning, investment research and strategic philanthropy services to businesses, institutions and ultra-high-net-worth individuals through a network of 22 branch offices in the U.S. and Israel.
AB has approximately $725 billion in assets under management, mostly in separately managed client accounts. The company invests in equities, fixed-income securities, derivatives, real estate securities and more. It also has a robust trading operation that trades foreign currencies, options and agricultural and natural resource commodities.
TD Cowen and Goldman Sachs both maintain a “buy” rating on the stock.
The current dividend yield for AB is 8.3%.
OneMain Holdings Inc. (OMF)
OMF is a specialty consumer finance company that offers credit cards and personal loans to clients with subprime credit. The company serves deserving borrowers who generally can’t get traditional loans or credit cards from banks or other financial institutions.
OMF has a market cap of $6.8 billion. It operates through an extensive national network of more than 1,400 branch offices all over the U.S. The firm secures its credit facilities and loans by requiring substantial collateral. Many of its loans are collateralized by personal autos. The company often secures the credit cards it issues by requiring a cash deposit that is refundable as long as the card remains current.
OMF also provides credit counseling, debt consolidation and financial education to its clients and offers only responsible lending solutions.
The stock has a current yield of 7.3%.
Annaly Capital Management Inc. (NLY)
NLY is an $11 billion mortgage real estate investment trust (mREIT) involved in many aspects of the commercial and residential mortgage markets.
NLY invests in agency and non-agency commercial mortgage-backed securities, called CMBS, and residential mortgage-backed securities, called RMBS. It also owns a large portfolio of mortgage servicing rights and invests in derivative mortgage securities such as forward mortgage commitments and credit risk transfer contracts.
Like all REITs, NLY is required to distribute at least 90% of its taxable income to shareholders as dividends. That fact coupled with the company’s impressive revenue growth — analysts expect revenue to grow from $1.25 billion in 2024 to $1.7 billion in 2025 — makes NLY a superior high-yield dividend stock for income-oriented investors.
At the close of business on Dec. 3, NLY had a yield of 13.2%.
Altria Group Inc. (MO)
While some investors may be uncomfortable investing in a tobacco and alcohol company, MO nonetheless belongs on this list of high-yield dividend stocks. The company has increased its annual dividend for 54 consecutive years and has been paying a regular dividend for even longer.
In 2008 cigarette maker Philip Morris International Inc. (PM) spun off its U.S. operations and created MO. Today MO is a $96 billion stock that offers many brands of cigarettes, cigars, pipe tobacco, smokeless tobacco and vaping products to U.S. smokers and tobacco users. In addition to its tobacco holdings, MO owns about 8% of Anheuser-Bush InBev (BUD), the largest beer brewer in the world.
Although cigarette and tobacco consumption has decreased dramatically in the U.S. over the last several decades, there is still a strong demand for MO’s products. The company’s alternative products, like e-cigarettes and vaping devices, have gained a large and loyal following which, to an extent, have made up for slowing tobacco sales.
MO shareholders enjoy a current yield of 7.2%.
Vale SA (VALE)
Vale is an established leader in the production of iron ore and nickel. This $41 billion metals and mining firm also produces significant quantities of copper, manganese and coal.
In addition to its industrial metals business, Vale has interests in several gold, silver and platinum mines, giving the firm meaningful exposure to the precious metals markets.
Vale is unique in the mining industry because it has successfully combined its extraction and mining operations with an extensive transportation infrastructure. In other words, it doesn’t just mine for metals, it distributes them worldwide. Vale operates in more than 30 countries around the globe.
With that kind of market presence and its well-diversified commodities portfolio, Vale should remain a strong industry player for many years to come. The stock is currently yielding 15.2%.
Verizon Communications Inc. (VZ)
VZ is a $180 billion provider of wireless communication devices, equipment and services to individual customers in the U.S. and enterprise clients all over the world. The company was created 24 years ago when the Regional Bell Operating Company, Bell Atlantic, merged with GTE. True to its roots, VZ still provides wired phone service to customers along the Eastern Seaboard of the U.S.
A key advantage for VZ is its extensive network infrastructure that includes more than 1 million miles of fiber optic cable globally and an equally impressive network of traditional coaxial cable. VZ is also aggressively involved in the development and rollout of 5G technology.
Analysts estimate that VZ will report revenue of $134 billion for 2024 and are expecting that figure to grow by about 2% to $137 billion in 2025. The stock currently boasts a dividend yield of 6.2%
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7 Best High-Yield Dividend Stocks to Buy Now originally appeared on usnews.com
Update 12/04/24: This story was previously published at an earlier date and has been updated with new information.
