Finding attractive dividend yields has become increasingly challenging for investors. The S&P 500’s average dividend yield sits at a paltry 1.2%, hovering near a record low. Against this bleak backdrop, a trio of U.S. stocks—Verizon (VZ), Healthpeak Properties (DOC), and Energy Transfer (ET)—stand out by offering compelling yields between 6.8% and 8%, averaging a robust 7.2%. These companies present a rare opportunity for income-focused investors.
What makes these stocks particularly noteworthy is their combination of high yields, stable cash flow generation, and solid financial health. This blend offers a potential balance of income and relative safety in a low-yield environment. Furthermore, all three companies possess the fundamental strength to support future dividend growth.
Verizon offers a 6.8% dividend yield and recently raised its payout, marking a sector-leading 19 consecutive years of dividend growth. The telecom giant generates substantial, recurring cash flow from its extensive wireless and internet subscriber base.
For the current year, Verizon is projected to produce $19.5-$20.0 billion in free cash flow after capital expenditures of $17.5-$18.5 billion. This comfortably covers its annual dividend obligation of approximately $11.5 billion. Strategic acquisitions, including the purchase of Frontier Communications’ fiber assets and Starry Group, are accelerating the expansion of its fiber and fixed wireless broadband networks, positioning the company for sustained cash flow and dividend growth.
Healthpeak Properties, a specialized healthcare Real Estate Investment Trust (REIT), provides a 6.8% dividend yield with the added appeal of monthly payments. The company owns a diversified portfolio of healthcare properties, including medical office buildings, life science labs, and senior housing communities. Its long-term leases often include annual rental escalation clauses, creating a stable and growing income stream.
The REIT maintains a conservative payout ratio, distributing about 75% of its stable income as dividends and reinvesting the remainder. Recent investments, such as the $148 million commitment to develop two outpatient medical facilities in Atlanta, are funded from retained cash. A strong balance sheet provides further flexibility to pursue new income-generating investments, supporting future dividend increases.
Topping the list with an 8% yield is Energy Transfer, a master limited partnership (MLP). This high payout is supported by a highly stable, fee-based business model. Approximately 90% of its earnings are derived from government-regulated rates and long-term, fixed-rate contracts.
In the first half of the year, the partnership generated approximately $4.3 billion in distributable cash flow, far exceeding the $2.3 billion distributed to unitholders. This excess cash is being reinvested into growth projects, with $5 billion planned for this year. With a leverage ratio in the lower half of its 4.0x-4.5x target range—its strongest financial position in history—Energy Transfer is well-equipped to fund these projects and pursue acquisitions. This disciplined growth strategy underpins its plan to increase its distribution by 3% to 5% annually.
