3 Ultra-High Yield Dividend Stocks to Buy Now and Hold for at Least a Decade

It will be over a decade before I start relying on dividend income from my stock portfolio. These days, I spend my time looking for businesses that pay juicy dividends, but it takes more than a high yield to get my attention.

I like to invest in successful businesses that provide a high upfront yield and can increase dividend payments over time. These three stocks stand out because they offer very high yields up front, and there’s an excellent chance that their payouts will continue to grow steadily once I’m ready to retire.

WP Carey (WPC -1.14%), Pfizer (PFE -1.93%)and Verizon (See -0.25%) all offer dividend yields of over 5% at recent prices and would do well in the portfolio of any income-seeking investor. Here’s how buying them now could lead to a ton of passive income for patient investors.

1. WP Carey

WP Carey is a real estate investment trust (REIT), which means it can avoid paying income taxes by distributing almost everything it earns to shareholders as a dividend. This REIT used to lease a lot of office buildings, but spun off that operation last year and cut its dividend payout accordingly.

On September 25, WP Carey raised its payout by 1.7% to $0.875 per share. At recent prices, it offers a juicy 5.5% yield, and its dividend program is on a more stable footing than you might think.

Funds from operations (FFO) are a proxy for earnings used to value REITs. In each of the past three quarters, WP Carey has generated adjusted FFO of $1.14 per share or more. That’s less than he reported before he spun Office properties net of rentbut much more than it needs to meet its current dividend obligation.

Now that WP Carey is out of the office building business, warehouses and industrial properties account for 64% of the rent it expects to receive over the next year. The portfolio is well diversified, with the largest tenant responsible for just 2.5% of the annual base rent.

Most of WP Carey’s leases do not expire until after 2034. With annual rent increases written into those long-term leases, investors can look forward to steady earnings over the next decade.

2. Pfizer

Pfizer’s shares have been under pressure due to rapidly contracting sales of its COVID-19 vaccine and antiviral treatment. The company has increased its dividend every year since 2009. At recent prices, it offers a high dividend yield of 5.7%.

In the first half of the year, total revenue fell 11% year over year, but investors can look forward to sales growth in the coming years. Disregarding COVID-19 products and foreign exchange rates, Pfizer reported second-quarter sales that were up 14% year-over-year.

Today, COVID-19 products are responsible for only 3% of the company’s total revenue. Without this headwind, Pfizer can continue to raise its dividend for another 15 years. More than a dozen of its products grew sales in the second quarter by 10% or better.

In addition to growing sales of drugs that are already well-established, Pfizer is launching more new treatments than any of its peers. In 2023, the company received US Food and Drug Administration (FDA) approval for a record nine new drugs.

3. Verizon

Verizon recently announced its 18th consecutive annual dividend increase. At recent prices, it offers a yield of 6.1%.

Verizon is the largest American telecommunications business by revenue. The barriers to entry are so high in this industry that it is likely to remain one of only three companies with a nationwide 5G network.

Internet and phone plans are Verizon’s main business, but it also sells a lot of smartphones. Equipment sales, which are responsible for about 15% of total revenue, fell 6.1% in the first half of 2024.

Despite equipment sales, total revenue rose 0.4% in the first half of the year. In the second quarter, broadband sales rose 12.3% year over year, which helped offset a decline in equipment sales.

Verizon’s broadband success could soon get a boost. The company recently revealed an acquisition plan Border communicationswhich has approximately 2.2 million fiber subscribers spread across 25 states. Millions of new broadband subscribers making regular monthly payments are exactly what Verizon needs to keep growing its dividend payout for the next decade.