The stock market has slumped sharply this year due to concerns that tariffs could cause a recession. One positive from the sell-off is that lower stock prices cause dividend yields to rise. Because of that, investors can lock in dividend yields of 5% or more on some high-quality companies right now. That positions them to collect durable passive income streams even if there is an economic downturn.
Here are five safe dividend stocks to buy right now for resilient dividend income.
Dominion Energy (NYSE: D) currently yields 5.1%. The utility generates very stable cash flow by supplying electricity and natural gas to customers in Virginia and the Carolinas. Government regulators set rates, while demand for energy tends to be stable, even during a recession.
The company is investing heavily in building additional power generation to support the expected future surge in electricity demand from catalysts like AI data centers and the onshoring of manufacturing. It’s investing $50 billion through 2029, including building a massive wind farm off the coast of Virginia, which should grow its earnings per share by 5% to 7% per year. That growing earnings will support Dominion’s high-yielding dividend in the near term by steadily reducing its dividend payout ratio during the current heavy investment phase while powering growth over the long term once it achieves its targeted payout ratio.
NNN REIT‘s (NYSE: NNN) dividend yield is 5.8%. The real estate investment trust (REIT) collects very steady rental income. It owns a portfolio of single-tenant net lease retail properties that produce stable income because tenants cover all operating costs, including routine maintenance, real estate taxes, and building insurance.
The REIT pays out less than 70% of its cash flow in dividends each year. That has it on track to produce $200 million in post-dividend free cash flow this year to invest in additional income-generating retail properties. NNN REIT also has a conservative balance sheet, giving it additional flexibility to acquire more properties. The growing income from its portfolio has enabled the REIT to steadily increase its dividend. Last year was the 35th straight year that it hiked its dividend payment.
Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP) has a dividend yield of around 5%. The global infrastructure operator generates very stable cash flow. Government-regulated rate structures or long-term contracts support 85% of its funds from operations (FFO). Meanwhile, Brookfield only pays out 60% to 70% of its stable cash flow in dividends.
The company uses the cash it retains, its strong balance sheet, and its capital recycling strategy to invest in growing its business and upgrading its global infrastructure portfolio. Brookfield recently bought a leading U.S. pipeline system and is investing heavily in building additional data infrastructure, such as semiconductor fabrication facilities and data centers. These investments should grow its FFO per share by more than 10% annually, supporting 5% to 9% dividend growth each year.
Verizon‘s (NYSE: VZ) dividend yields 6.2% as I write this. The telecom giant produces recurring cash flow as consumers and businesses pay their wireless and broadband bills. The company uses that cash flow ($36.9 billion last year) to invest in maintaining and expanding its infrastructure ($17.1 billion in capital expenditures) and pay its high-yielding dividend ($11.2 billion) with room to spare ($8.6 billion in excess free cash). It uses its excess free cash to strengthen its balance sheet.
The telecom giant is using its strong balance sheet to acquire Frontier Communications in a $20 billion all-cash deal to further bolster its fiber network. Its investments in fiber and 5G should grow its cash flow, enabling Verizon to continue increasing its dividend. It extended its dividend growth streak to a sector-leading 18 years in a row last year.
Oneok (NYSE: OKE) has a 5% dividend yield. The pipeline giant produces very stable cash flow to support that payout. Government-regulated rate structures and long-term contracts back the bulk of its energy infrastructure assets. Because of that, it gets paid stable fees as volumes flow through its midstream systems.
Oneok has made several major acquisitions in recent years to further diversify and expand its midstream platform. It’s also investing heavily in organic capital projects to drive additional growth, with projects currently scheduled to come online through 2028. These investments position Oneok to grow its dividend by 3% to 4% per year while also strengthening its balance sheet and opportunistically repurchasing shares. That will continue the company’s more than quarter-century trend of dividend stability and growth.
One benefit of the recent stock market sell-off is that it has pushed up dividend yields. Many high-quality companies currently offer payouts of 5% and above. Because of that, investors can lock in some attractive income streams right now that should remain durable over the long haul.
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Matt DiLallo has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, and Verizon Communications. The Motley Fool recommends Brookfield Infrastructure Partners, Dominion Energy, Oneok, and Verizon Communications. The Motley Fool has a disclosure policy.
5 Safe Dividend Stocks Yielding 5% or More to Buy Right Now for Durable Passive Income was originally published by The Motley Fool
