Investors Are Buying High-Yield Stocks Hand-Over-Fist: 5 Favorites That Yield 7% or More

Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.

The stunning fall of the S&P 500 into correction territory after two years of nonstop gains has surprised many market experts, and given the speed of the downturn, some feel that it could be closer to the end than the beginning. The reality is likely that the non-stop government spending and hiring over the past four years is over, and for the stock market to get back on the right track, earnings and forward guidance (which has been horrible for many companies) will have to improve, and that could take a few quarters. While the recession argument is a toss-up for now, the gross domestic product for 2025 could be a dismal 2% or lower if we are lucky.

As we mentioned, retail investors are the most exposed to equities ever, so they have been grabbing high-yield dividend stocks on sale. We screened our 24/7 Wall St. high-yield dividend stock database, looking for quality companies with 7% and higher dividends. Five make sense now, with two top chemical companies that are reasonably priced and have big upside potential.

Why do we cover high-yield dividend stocks?

High-yield dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

British American Tobacco

This British multinational company manufactures and sells cigarettes and other tobacco and nicotine products. European giant British American Tobacco PLC (NYSE: BTI) is a consumer-centric, multi-category consumer goods company.

The company provides tobacco and nicotine products. Its segments include:

• United States
• Asia Pacific
• Middle East
• Africa
• The Americas
• Europe

The company’s product categories include:

• Vapor
• Tobacco Heating Products (THPs)
• Modern Oral, Traditional Oral, and Combustible cigarettes

Vapor products are handheld, battery-powered devices that heat a liquid (called an e-liquid) to produce an inhalable aerosol known as vapor. THPs are a new category of tobacco product designed to heat rather than burn tobacco.

Modern Oral products are smoke-free oral nicotine products called nicotine pouches, designed for use in the mouth. Traditional oral products include snus and snuff.

British American Tobacco brands include:

• Vuse
• glo
• Velo
• Grizzly
• Dunhill
• Kent
• Lucky Strike
• Pall Mall
• Rothmans
• Newport
• Natural American Spirit
• Camel
• Vogue
• Viceroy
• Kool
• Peter Stuyvesant
• Craven A
• State Express 555
• Shuang Xi

Dow

This materials science company offers a wide range of products and services. It was spun out from DuPont in 2019, and the stock was removed from the Dow Jones industrial average last November. Dow Inc. (NYSE: DOW) is a leading materials science company formed by the merger of Dow and DuPont in 2017 and subsequent spin-off.

The company is organized into three principal divisions:

• Performance Materials & Coatings
• Industrial Intermediates & Infrastructure
• Packaging & Specialty Plastics

The company’s segments include Agricultural Sciences, which provides crop protection, seed/plant biotechnology products and technologies, urban pest management solutions, and healthy oils.

Consumer Solutions, which consists of:

• Consumer Care
• Dow Automotive Systems
• Dow Electronic Materials
• Consumer Solutions-Silicones businesses

Infrastructure Solutions, which consists of:

• Dow Building & Construction
• Dow Coating Materials
• Energy & Water Solutions
• Performance Monomers and Infrastructure Solutions-Silicones businesses

Performance Materials & Chemicals, which consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses.

Performance Plastics, which consists of:

• Dow Elastomers
• Dow Electrical and Telecommunications
• Dow Packaging and Specialty Plastics
• Energy and Hydrocarbons

Ford

Ford Motor Co. (NYSE: F) is an American automotive corporation founded in 1903 by Henry Ford and 11 associate investors. The company develops, delivers, and services a range of Ford trucks, commercial cars, vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.

It operates through five segments:

• Ford Blue
• Ford Model e
• Ford Pro
• Ford Next
• Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.

It also engages in vehicle-related financing and leasing activities through automotive dealers.

In addition, the company provides retail installment sale contracts for:

• New and used vehicles
• Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers

Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.

LyondellBasell

LyondellBasell Industries N.V. (NYSE: LYB) is a global leader in developing and supplying materials that enable packaging, health, and transportation solutions. This blue-chip chemical giant offers a very reasonable entry point. It operates as a chemical company in:

• The United States
• Germany
• Mexico
• Italy
• Poland
• France
• Japan
• China
• the Netherlands
• Internationally

The company operates in six segments:

• Olefins and Polyolefins-Americas
• Olefins and Polyolefins-Europe, Asia, International
• Intermediates and Derivatives
• Advanced Polymer Solutions
• Refining
• Technology

It produces and markets olefins and co-products, polyethylene and polypropylene, propylene oxide and derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.

In addition, the company produces and markets compounding and solutions, including:

• Polypropylene compounds
• Engineered plastics, masterbatches
• Engineered composites, colors, and powders
• Advanced polymers, including catalloy and polybutene-1
• Refines heavy, high-sulfur crude oil, other crude oils, and refined products, including gasoline and distillates

Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications.

USA Compression Partners

USA Compression Partners L.P. (NYSE: USAC) provides natural gas compression services under term customer contracts. While perhaps less known than their peers, this off-the-radar stock makes sense now.

The company offers compression services to:

• Oil companies and independent producers
• Processors
• Gatherers
• Transporters of natural gas and crude oil, as well as operating stations

USA Compression Partners primarily provides natural gas compression services to infrastructure applications, including centralized natural gas gathering systems, processing facilities, and gas lift applications for crude oil wells.

The 5 Highest-Yielding Monthly Dividend Stocks Deliver Gigantic Passive Income Streams

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