Want Nearly $1,000 in Annual Income? Investing $15,000 Into These High-Yield Dividend Stocks Could Deliver That … – The Motley Fool – CROCODOM.com

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Investing in dividend-paying stocks is an easy way to start making some extra income. And if you pick companies with attractive yields, the income can really add up as you grow your portfolio.
For example, investing $15,000 evenly across these five high-quality, high-yielding dividend stocks would, at their current payout rates, generate almost $1,000 of annual dividend income.
Dividend Stock
Investment
Current Yield
Annual Dividend Income
MPLX
$3,000
9.04%
$271.20
Clearway Energy
$3,000
6.79%
$203.70
Realty Income
$3,000
5.73%
$171.90
MAA
$3,000
4.68%
$140.40
Verizon
$3,000
6.45%
$193.50
Total
$15,000
6.54%
$980.70
Data source: Google Finance and author’s calculations.
That’s a lot more dividend income than the $210 you’d have if you invested the same amount in an S&P 500 index fund, with its current yield of 1.4%.
Here’s why these dividend stocks stand out as great ones for those seeking to generate a growing stream of passive income.
Realty Income (O 0.60%) is a diversified real estate investment trust (REIT). It owns high-quality retail, industrial, gaming, and other properties that are leased to tenants under triple net (NNN) leases. Those agreements supply it with predictable rental income because the tenants cover the variable expenses associated with the properties they occupy (real estate taxes, building insurance, and maintenance). It pays out about three-quarters of that stable income in dividends.
The REIT retains the rest of its cash flow to help fund the acquisition of additional income-producing properties. Realty Income believes it has the financial resources to grow its cash flow by 4% to 5% each year. That should enable it to continue increasing its dividend. It has done that 123 times since its public market listing in 1994, growing its payout at a 4.3% compound annual rate.
MPLX (MPLX 0.42%) is a master limited partnership focused on the energy midstream sector. It operates pipelines, processing plants, and storage terminals that generate stable income backed by long-term contracts and government-regulated rate structures.
Last year, MPLX produced nearly $5.4 billion in cash, more than 7% above 2022’s level. That gave it the money to cover its monster cash distribution by a comfy 1.6 times, even though it increased its payout by 10% for the second straight year. It used the cash it retained to invest in expansion projects and maintain its fortress-like balance sheet. The company has several projects slated to come online over the next two years. Meanwhile, it recently made a small acquisition. These growth-related investments will increase its cash flow, giving MPLX more fuel to increase its already hefty payouts.
Clearway Energy (CWEN -0.43%) (CWEN.A 0.09%) is a clean energy-focused infrastructure company. It operates environmentally sound natural gas power plants and renewable energy projects. It sells the electricity these assets produce to utilities and large corporate buyers under long-term power purchase agreements that supply it with the predictable cash flows it uses to pay its generous dividend.
The company has set a target of increasing its already sizable payouts by 5% to 8% each year, and management expects its hikes will come in toward the upper end of that range through 2026. Powering that growth are its investments in expanding its renewable energy portfolio. Clearway sold its thermal assets a couple of years ago and is recycling the proceeds from that transaction into higher-returning renewable energy investments. It has already signed deals to invest the proceeds into new projects that should close over the next few years as they go into commercial service. Those new investments give it lots of visibility into its future earnings and dividend growth.
MAA (MAA -0.10%) is a REIT that primarily owns apartment communities in the fast-growing Sunbelt region. That geographic concentration enables MAA to benefit from strong demand, which keeps occupancy levels high while driving healthy rental growth rates. Its durable and growing rental income supports the REIT’s attractive dividend.
After paying dividends and ensuring it’s maintaining a strong balance sheet, the apartment landlord invests its remaining cash in enhancing its portfolio. It routinely redevelops older properties by renovating units to capture higher rental rates. It will also invest in new developments and acquire additional properties. For example, MAA in October spent $102 million to buy a recently completed apartment community in Phoenix. Meanwhile, it’s investing nearly $650 million to develop five new communities it expects to complete over the next two years. These investments help grow its cash flow, enabling the REIT to steadily increase its dividend. It gave investors a 5% raise at the end of last year.
Verizon (VZ -0.39%) operates a leading telecom network. It generates significant cash flow as businesses and consumers pay their wireless and broadband bills. That gives it the money to invest in enhancing its network, paying dividends, and strengthening its balance sheet.
The telecom giant has increased its dividend annually for 17 straight years, the longest current streak in the U.S. telecom sector. Verizon is in an excellent position to continue increasing its payouts. Its investments in 5G should contribute to growing cash flow over time. Meanwhile, it expects its capital spending to decline in 2024 after it completed a major capital outlay early last year. That growing free cash flow will enable Verizon to pay down its debt faster, saving it money on interest expenses. It should also allow the telecom to continue increasing its big-time dividend.
Realty Income, MPLX, Clearway Energy, MAA, and Verizon are all great dividend stocks for those seeking to generate income. They offer much higher-yielding payouts than most other stocks. Meanwhile, they should continue to increase those dividends in the future. Because of that, they will enable investors to make more money now and supply them with growing income streams over time.

Matthew DiLallo has positions in Clearway Energy, Mid-America Apartment Communities, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Mid-America Apartment Communities and Realty Income. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
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