Three High-Yield Dividend Stocks Offering More Than 5% Return to Purchase for Enhanced Passive Revenue Source
Investing in high-yield dividend stocks might seem insignificant when major market indexes are smashing all-time highs. However, these passive income sources can significantly enhance your finances, regardless of equity prices' fluctuations. With the S&P 500 yielding a measly 1.2%, traditional index funds might not cut it if you crave meaningful dividend income.
Four noteworthy dividend stocks suitable for your portfolio include United Parcel Service (UPS), delivering a 5.6% yield at current prices, Brookfield Renewable, boasting a juicy 5.4% forward yield, and Conagra Brands, presenting a decade-high yield.
United Parcel Service (UPS)
The delivery giant UPS has had its fair share of challenges over the years, from overestimating small package delivery demand and costly contract renegotiations with employees, to a complicated 50% reduction in Amazon deliveries by the second half of 2026. Although management's new strategy faces execution hurdles, it deserves a warm welcome.
Upgrading its network to prioritize high-margin deliveries from targeted clients such as small businesses and healthcare companies while minimizing Amazon's costly residential deliveries promotes long-term profitability. The initiative aligns with its plans to invest in automation and smart facilities, hence closing less efficient facilities.
Brookfield Renewable
As President Trump expresses skepticism about supporting renewable energy expansion in the U.S., the renewable energy industry now faces a chilly investor climate. Yet, Brookfield Renewable's robust international operations and long-term power purchase agreements should maintain its dividend.
With 90% of its funds from operations stemming from long-term contracts, the 5.4% forward yield presents an excellent opportunity for patient investors. After the recent selloff, Brookfield Renewable now appears as an attractive renewable energy dividend stock to buy.
Conagra Brands
Now deep in the packaged food industry slump, Conagra brands hold a mixed bag of well-known brands like Slim Jim, Reddi-Wip, and Orville Redenbacher's. Though its sales remain steady, shrinking margins and delayed inflation relief threaten its upward trajectory.
Despite these challenges, Conagra's stock surprisingly offers a high yield due to its ongoing debt reduction and increased dividend since 2021. Commitment to growth, along with its current 2.35 adjusted earnings per share, makes Conagra Brands an enticing steep-value investment.
Some other alternatives for high-yield dividends include Real Estate Investment Trusts (REITs) such as Ready Capital Corp, International Seaways Inc, Two Harbors Investment Corp, Arbor Realty Trust Inc, Chicago Atlantic Real Estate Finance Inc, and Angle Oak Mortgage REIT Inc. For monthly dividend payouts, consider Dynex Capital.
To manage risk and diversify your portfolio, you can also invest in high-dividend-yield ETFs, such as Schwab International Dividend Equity ETF, Schwab US Dividend Equity ETF, Vanguard High Dividend Yield ETF, or Vanguard International High Dividend Yield Index ETF.
- Despite major market indexes reaching all-time highs, investing in high-yield dividend stocks like United Parcel Service (UPS) can be worthwhile, as they can significantly enhance your finance portfolio, even with fluctuations in equity prices.
- Overestimation of small package delivery demand and costly contract renegotiations with employees have been challenges for UPS, but upgrading its network to prioritize high-margin deliveries and investing in automation and smart facilities might lead to long-term profitability.
- With President Trump's skepticism towards renewable energy expansion in the U.S., the industry may face a chilly investor climate, but Brookfield Renewable's robust international operations and long-term power purchase agreements could maintain its dividend, making it an attractive renewable energy dividend stock to buy.
- Conagra Brands, with shrinking margins and delayed inflation relief, may face challenges, but its high yield is due to ongoing debt reduction and an increased dividend since 2021, making it a steep-value investment worth considering.
