If You Have $5,000, Buy These 3 High-Yield Dividend Stocks Now

Investing in high-yield dividend stocks can produce plenty of cash flow, but that’s not the only thing that makes these stocks special. Many stocks with high yields also happen to be quite stable, so you’re less likely to see a sharp pullback in your portfolio when the market endures a correction.

While you can choose from several high-yield dividend stocks, you can find some high-yielders that still offer growth opportunities. These three high-yield dividend stocks have those desirable factors in full display and are worth considering for any dividend investor.

Cisco (CSCO)

Cisco’s (NASDAQ:CSCO) 2.43% yield may not be considered a high yield by every dividend investor. However, it’s still a respectable yield as Cisco enjoys an AI-fueled renaissance. After being a dead stock for more than five years, Cisco’s role in artificial intelligence has resulted in a strong 43% gain over the past year.

This movement reminds me of IBM (NYSE:IBM), which had a lost decade before artificial intelligence and cloud computing tailwinds propelled the stock to a shocking 158% gain over the past five years, with most of those gains occurring within the past three years.

Cisco still has momentum to go along with a reasonable P/E ratio and impressive financial growth. If the company continues its stretch and mirrors IBM — and its growth in AI infrastructure suggests that it’s possible — the stock will eventually have a yield below 2% due to appreciation. Investors can currently enter the stock at a more attractive 2.43% yield.

Verizon (VZ)

It’s hard to find a dividend stock that offers qualified dividends at 6.40%, but Verizon (NYSE:VZ) checks that key box. The telecom giant has a strong, mature business model. Revenue and net income growth are very low, but it’s enough to support the dividend. Furthermore, the company only trades at a 10 P/E ratio.

Investors who look at the chart may notice that Verizon is down by about 20% over the past five years. However, investors actually ended up ahead due to the stock’s tremendous yield. Verizon can also benefit from artificial intelligence since AI tools will require good 5G connections to work smoothly. 

Verizon can drum up more business for its 5G network as AI demand increases. The company already has a partnership with Nvidia (NASDAQ:NVDA) in a bid to capitalize on the AI boom.

PepsiCo (PEP)

PepsiCo (NASDAQ:PEP) is a defensive stock that offers a wide range of consumer staples. The company boasts an impressive 4.37% yield and has a 19 P/E ratio. People will continue to buy food and snacks in any economy, and that makes PepsiCo less volatile than other picks.

For instance, shares increased by 4% in 2022, when many growth stocks tumbled. PepsiCo withstood high inflation and soaring interest rates to deliver that return for investors plus the dividend. PepsiCo shares are in the middle of a correction right now that may prove to be a long-term buying opportunity. The stock is currently down by roughly 15% year-to-date.

PepsiCo still has opportunities to grow in international markets. If the company continues to expand in these markets, it can bring the company back to respectable low to mid single digit year-over-year revenue growth.

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