Updated on November 8th, 2021 by Bob Ciura
Spreadsheet data updated daily
What are high dividend stocks?
They are stocks that pay out a dividend significantly in excess of market average dividends. The S&P 500 currently has a dividend yield of just 1.3%. The high dividend stocks in this article all have dividend yields of 5% or more.
High yield stocks can be very helpful to shore up income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.
We have created a spreadsheet of stocks (and closely related REITs and MLPs, etc.) with dividend yields of 5% or more…
You can download your full free list of all 92 securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:
Not all high yield stocks make equally good investments…
This article examines the 7 highest yielding securities in the Sure Analysis Research Database with Dividend Risk Scores of C or better, with a minimum yield of 5%.
Notes: We update this article near the beginning of each month so be sure to bookmark this page for next month. The spreadsheet uses the Wilshire 5000 as the universe of securities from which to select, plus a few additional securities we screen for 5%+ dividend yields.
With yields of 5% and greater, these securities all offer high dividends (or distributions). And with Dividend Risk Scores of C or better, they don’t suffer from the usual excessive riskiness of truly high yielding securities.
In other words, these are relatively safe, high dividend stocks for you to consider adding to your retirement or pre-retirement income portfolio.
Table Of Contents
All high dividend stocks in this list have dividend yields above 5%, making them very appealing in an environment of low interest rates. A maximum of three stocks were allowed for any single market sector to ensure diversification.
The 7 high dividend stocks with Dividend Risk scores of C or better are listed in order by dividend yield, from lowest to highest.
- High Dividend Stock #7: National Health Investors, Inc. (NHI)
- High Dividend Stock #6: Altria Group (MO)
- High Dividend Stock #5: AT&T Inc. (T)
- High Dividend Stock #4: British American Tobacco plc (BTI)
- High Dividend Stock #3: Sunoco LP (SUN)
- High Dividend Stock #2: Magellan Midstream Partners LP (MMP)
- High Dividend Stock #1: MPLX LP (MPLX)
High Dividend Stock #7: National Health Investors, Inc. (NHI)
- Dividend Yield: 6.5%
- Dividend Risk Score: C
National Health Investors is a REIT focused on healthcare facilities. Some of the healthcare facilities NHI invests in are independent living facilities, senior-living campuses, and medical office buildings.
NHI specializes in sale-leaseback, joint-venture, mortgage, and mezzanine financing.
Source: Investor Presentation
On December 31st, 2020, NHI had investments in 162 senior housing properties, 75 skilled nursing facilities, 3 hospitals, and 2 medical office buildings across 34 states run by 36 operating partners.
During 2020, rental income was $307 million and made up 92% of income.
Click here to download our most recent Sure Analysis report on NHI (preview of page 1 of 3 shown below):
High Dividend Stock #6: Altria Group (MO)
- Dividend Yield: 8.0%
- Dividend Risk Score: B
Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and a number of other non–smokeable brands, including Skoal and Copenhagen.
Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and a number of other non–smokeable brands, including Skoal and Copenhagen.
The company is aggressively expanding its IQOS brand of heated tobacco products.
Source: Investor Presentation
Altria also has a 10% ownership stake in global beer giant Anheuser Busch Inbev, in addition to large stakes in Juul, a vaping products manufacturer and distributor, as well as cannabis company Cronos Group (CRON).
Click here to download our most recent Sure Analysis report on Altria Group (preview of page 1 of 3 shown below):
High Dividend Stock #5: AT&T Inc. (T)
- Dividend Yield: 8.3%
- Dividend Risk Score: B
AT&T is a telecommunications giant, as its core Communications segment provides mobile, broadband and video to 100 million U.S. consumers and 3 million businesses.
On October 21st, 2021, AT&T reported Q3 2021 results for the period ending September 30th, 2021. For the quarter the company generated $39.9 billion in revenue, down –5.7% from $42.3 billion in Q3 2020, reflecting the separation of the U.S. video business, other divested businesses and lower Business Wireline revenues.
On an adjusted basis, earnings–per–share equaled $0.87 compared to $0.76 in the year ago quarter. AT&T’s net debt–to–EBITDA ratio was 3.17x.
Source: Investor Presentation
With a P/E below 10, AT&T is undervalued against our fair value estimate of 11. The combination of 3% expected EPS growth and the 8.2% dividend yield lead to total expected returns of 15.8% per year over the next five years.
Click here to download our most recent Sure Analysis report on AT&T (preview of page 1 of 3 shown below):
High Dividend Stock #4: British American Tobacco plc (BTI)
- Dividend Yield: 8.4%
- Dividend Risk Score: C
British American Tobacco is one of the world’s largest tobacco companies. British American Tobacco owns many tobacco brands, including Kool, Benson & Hedges, Dunhill, Kent, and Lucky Strike. The company also acquired the remaining 48% stake in Reynolds American Tobacco that it did not already own in July of 2017.
Although the company is incorporated in the United Kingdom and headquartered in London, American investors can purchase its stock through American Depository Receipts that trade on the New York Stock Exchange under the ticker BTI. Despite being headquartered in the United Kingdom, British American Tobacco triggers no dividend withholding tax for United States investors.
Click here to download our most recent Sure Analysis report on British American Tobacco (preview of page 1 of 3 shown below).
High Dividend Stock #3: Sunoco LP (SUN)
- Dividend Yield: 8.4%
- Dividend Risk Score: C
Sunoco is a Master Limited Partnership that distributes fuel products through its wholesale and retail business units. The wholesale unit purchases fuel products from refiners and sells those products to both its own and independently-owned dealers. Sunoco is the largest fuel distributor in the U.S, but also operates a small number of retail stores, and a terminal facility in Hawaii.
Click here to download our most recent Sure Analysis report on Sunoco (preview of page 1 of 3 shown below).
High Dividend Stock #2: Magellan Midstream Partners LP (MMP)
- Dividend Yield: 8.7%
- Dividend Risk Score: C
Magellan Midstream Partners is a Master Limited Partnership, or MLP. Magellan has the longest pipeline system of refined products, which is linked to nearly half of the total U.S. refining capacity.
Source: Investor Presentation
This segment generates ~65% of its total operating income while the transportation and storage of crude oil generates ~35% of its operating income.
MMP has a fee-based model; only ~10% of its operating income depends on commodity prices.
Click here to download our most recent Sure Analysis report on Magellan Midstream Partners (preview of page 1 of 3 shown below).
High Dividend Stock #1: MPLX LP (MPLX)
- Dividend Yield: 8.8%
- Dividend Risk Score: C
MPLX, LP is a Master Limited Partnership that was formed by the Marathon Petroleum Corporation (MPC) in 2012.
The business operates in two segments: Logistics and Storage – which relates to crude oil and refined petroleum products – and Gathering and Processing – which relates to natural gas and natural gas liquids (NGLs). In 2019, MPLX acquired Andeavor Logistics LP.
Click here to download our most recent Sure Analysis report on MPLX (preview of page 1 of 3 shown below).
Final Thoughts
The 7 high dividend stocks analyzed above all have dividend yields of 5% or higher. And importantly, these securities generally have better risk profiles than the average high-yield security.
That said, a dividend is never guaranteed, and high dividend stocks are potentially at risk of dividend reductions or suspensions if a recession occurs in the near future.
Investors should continue to monitor each stock to make sure their fundamentals and growth remain on track, particularly among stocks with extremely high dividend yields.
You can download the free spreadsheet below of 92 high dividend stocks below for more high yield investment ideas.