7 High-Yield Dividend Stocks for the Ultimate Retirement Portfolio
Retirement planning is a vital phase of life (the climax) that demands careful strategic investment decisions. Among vast investment options, high-yield dividend stocks for retirement are ideal for stability and consistent income. The article explores seven high-yield dividend stocks for retirement. The listed stocks could lead to predictable retirement income from telecommunications and hospitality to pharmaceuticals and real estate investment trusts (REITs).
On the list, three stocks in the telecommunications industry are based on their services’ finesse, moderate dividend yields, and robust revenue growth. Meanwhile, the second one on the list, with its diversified portfolio and solid revenue uptrend, is promising a return from the booming hospitality pie. Whereas the fifth and seventh ones offer stability in industrial conglomerates and pharmaceuticals, their dividends are dependable every season. Finally, the sixth one, focusing on dividend growth and financial fortitude, offers a cash flow sanctuary in real estate.
Read more to learn about these high-yield dividend stocks for retirement.
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Vodafone (VOD)
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Vodafone (NASDAQ:VOD) offers a dividend yield (trailing 12 months) of 12% with an annual payout of $0.99. Better, the company has delivered revenue growth in Europe and Africa as of the third quarter of the fiscal 2024 trading update. This highlights the maintenance of good service revenue momentum across these regions. The acceleration of Vodafone’s business supports this momentum, particularly in cloud and Internet of Things (IoT) services, which grew by over 20%. In Q3. The company reported a total service revenue of €9.383 billion.
Additionally, Vodafone has achieved broad-based service revenue growth, with 14 out of 17 markets growing. This is demonstrating the edge of its business model across different regions. Germany, one of its key markets, experienced service revenue growth of 0.3% in Q3. These developments reflect stability despite challenges like non-recurring revenue from service providers and fluctuating IoT revenue.
Finally, Vodafone Business has significantly accelerated service revenue growth to 5% in Q3. This growth is based on performance in digital services. This suggests the solid execution of Vodafone’s strategic initiatives. The company’s partnerships with Microsoft (NASDAQ:MSFT) and Accenture (NYSE:ACN) highlight its focus on the business segment. Hence, these developments may continue to boost its competitiveness and sustain dividends.
Park Hotels And Resorts (PK)
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Another one of the top high-yield dividend stocks for retirement is Park Hotels And Resorts (NYSE:PK), which carries a dividend yield (forward) of 25% with a payout of $3.72. Park Hotels And Resorts delivers edgy top-line growth based on trends in core market segments and geographic.
For instance, Park Hotels And Resorts operates a diversified portfolio across various locations, including urban hubs like New York City and leisure destinations like Hawaii. Also, San Francisco’s removal from the portfolio reduces exposure to just 3% of rooms, strengthening the balance sheet and credit metrics.
Additionally, in Q3 2023, revenue per available room(RevPAR) increased by 3% year-over-year. This demonstrates sustained growth in revenue metrics. Also, excluding Casa Marina Resort’s suspension, RevPAR increased by 4.8%, indicating operational and revenue enhancement strategies.
Finally, group revenue for the comparable portfolio improved by 12% year-over-year to over $95 million. This was based on strong banquet catering results and a solid short-term pickup. The full-year 2023 comparable group revenue pace increased by nearly 1.8% relative to 2019. Thus, this indicates sustained demand and revenue growth potential.
Verizon (VZ)
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Verizon (NYSE:VZ) has a forward dividend yield of around 7%, with an annual payout of $2.66, sustained by a 19-year dividend growth history despite a payout ratio of 56%.
Verizon’s capability to consistently add postpaid phone customers can be observed in the 318K net additions in Q4 2023. This reflects the company’s strong market position and customer appeal. These positive net gains suggest Verizon’s edge in attracting and retaining customers. Also, this fundamental is vital considering the intense competition in the wireless telecom industry.
Similarly, the growth in postpaid phone subscribers is a key driver of revenue growth and profitability for Verizon. In detail, the company’s lead in adding postpaid phone customers is based on various factors. This includes myPlan, segmented market approaches, and strategic partnerships.
For instance, Verizon’s myPlan was introduced based on extensive customer research. The plan offers consumers flexibility and value, leading to its widespread adoption. Similarly, Verizon’s segmented market approach supports the customization of its offerings to different customer verticals. This maximizes its appeal and competitive edge.
Looking ahead, Verizon targets maintaining positive postpaid phone net adds in 2024. Again, this is by executing its customer-centric strategies while maintaining solid financials. Despite potential challenges, such as pricing actions impacting churn rates, the company may sustain growth in subscriber numbers.
AT&T (T)
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AT&T (NYSE:T) offers a dividend yield (forward) of nearly 7%, with an annual payout of $1.11 and a payout ratio of 46%. Similar to Verizon, AT&T has also experienced continued growth in its wireless subscriber base. Particularly in the postpaid phone segment, with low churn rates.
In numbers, over 2023, AT&T added more than 1.7 million postpaid phone net additions. Postpaid phone churn remained historically low at 0.84% for Q4, indicating high customer satisfaction and loyalty.
Additionally, the company’s postpaid phone base grew by more than 10% to over 71.2 million subscribers. This suggests AT&T’s best three-year stretch of postpaid phone net-added growth over a decade. Fundamentally, the sustained growth in the postpaid phone segment demonstrates AT&T’s edgy go-to-market approach.
Overall, despite competitive pressures, AT&T has managed to attract quality customers. Meanwhile, it maintains low churn rates based on a solid brand image and user satisfaction scores.
3M (MMM)
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3M (NYSE:MMM) has a forward dividend yield of over 6.5% and an annual payout of over $6. A lengthy 65-year dividend growth history also supports this. 3M delivers robust performance and holds cash flow generation capabilities to support its dividend aristocrat.
To begin with, 3 M’s operational solid performance drives earnings growth, with adjusted EPS increasing by 11% in 2023. The company prioritizes cash flow generation, achieving a 30% increase in free cash flow and a conversion rate of 123%. Cash flow is primarily utilized for strategic investments, debt reduction, and shareholder returns through dividends. In detail, the adjusted free cash flow of $6.3 billion in 2023 breached the expected initial range. Net debt was reduced by $2 billion (17% year-on-year), and about $3.3 billion was returned to shareholders through dividends.
Finally, the impending spin-off of the healthcare business is expected to strengthen the balance sheet further. Overall, edgy cash flow generation supports 3M with the flexibility to pursue strategic initiatives and counter adversities.
Realty Income (O)
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Realty Income (NYSE:O) is labeled with a forward dividend yield of 6% and an annual payout of $3.08, though its payout ratio is relatively high at 74%. Realty Income has shown a commendable 5-year growth rate of 3.66% and a history of dividend growth spanning 26 years.
Realty Income’s solid financials also represent its edgy approach to supporting performance and dividends. The company may continue to derive adjusted funds from operations (AFFO) per share growth. Also, Realty Income delivers attractive total operational returns that reflect the strength of its business model. Also, Realty Income has demonstrated the consistency of its earnings profile. The company is based on the attractive internal growth of its high-quality real estate portfolio.
For instance, in Q3, the AFFO per share grew by 4.1% year-over-year to $1.02 per share. Also, the company focuses on maintaining an A3/A-credit rating that further boosts its stability and access to capital on favorable terms.
Finally, a systematic reduction of net debt improves fixed charge coverage ratios. Therefore, the company’s strong liquidity position, with $4.5 billion of liquidity at the end of Q3, provides flexibility to pursue growth in an adverse operating environment.
Pfizer (PFE)
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Pfizer (NYSE:PFE) provides a dividend yield of over 6%, with an annual payout of $1.68, but with a notably high payout ratio of 89.62% and a 5-year growth rate of 4.77%, backed by 13 years of dividend growth.
Pfizer targets oncology leads, leveraging the acquisition of Seagen to bolster its oncology research and related resources. Seagen’s in-line medicines are expected to enhance Pfizer’s top-line growth immediately. Also, Pfizer anticipates delivering at least eight potential edgy products by 2030 in oncology. Furthermore, the company’s combined portfolio may lead to genitourinary cancer and breast cancer.
At its core, Pfizer focuses on maximizing the performance of new products through efficient commercial strategies. For instance, revenue of $59 billion was attained in 2023, with operational growth of 7%. Also, Pfizer maintains a 96% market share in the adult Prevnar franchise. Interestingly, revenue guidance is from $58.5 billion to $61.5 billion for 2024, with 8%–10% operational revenue growth, excluding certain products. The company targets at least $4 billion in net savings from cost-realignment programs by the end of 2024.
Finally, these fundamentals boost Pfizer’s capability to drive top-line growth and market edge, maintaining its dividend sustainability.
As of this writing, Yiannis Zourmpanos held long positions in VZ, T, MMM, and PFE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.
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