The stock market is experiencing turbulence, shaken by concerns over trade restrictions and the possibility of an economic slowdown. Amid trade war-related fears, dividend-paying stocks with high yields can be a solid option. These dividend stocks provide a steady income stream and act as a cushion against volatility.
Among the top dividend-paying stocks, Energy Transfer (ET) and Realty Income (O) stand out for their consistent dividend payments and growth histories. Their ability to generate steady cash flow, even during challenging market conditions, makes them attractive to investors. Further, these companies also offer attractive dividend yields exceeding 5%. Their resilient payouts make them reliable investments to generate steady yield amid trade war fears.
Dividend Stock #1: Energy Transfer
Energy Transfer (ET) is one of the most reliable high-yield dividend stocks, offering steady income amid market volatility. Thanks to its strong cash flows, solid fee-based earnings, and low exposure to commodity price fluctuations, this energy infrastructure company consistently delivers solid earnings, supporting its dividend growth and high yield.
Energy Transfer operates one of North America’s most extensive pipeline and storage networks. Its vast interstate pipeline system connects every major U.S. supply basin to key demand and export hubs, making it a critical player in the energy transportation sector. This expansive infrastructure ensures high utilization of its assets and helps generate a steady flow of revenue, largely insulated from the ups and downs of oil and gas prices.
Energy Transfer recently raised its quarterly cash distribution to $0.3250 per share ($1.30 per year) and is well-positioned to enhance shareholder value through steady dividend increases. It projects annual dividend growth of 3%-5%, supported by its ability to generate resilient earnings (about 90% of its earnings are derived from fee-based contracts).
Beyond traditional energy transportation, Energy Transfer is focusing on the rapidly growing artificial intelligence (AI) and data center markets. Data centers require reliable, large-scale energy sources, and ET is leveraging its natural gas infrastructure to cater to this demand.
A major step in this direction is its recent agreement with CloudBurst Data Centers, a long-term natural gas supply deal for an AI-focused data center project in Texas. This partnership is just the beginning as ET explores further collaborations with data center developers, tapping into one of the fastest-growing energy demand sectors.
Wall Street analysts remain bullish on ET, maintaining a “Strong Buy” consensus rating. Further, the recent dip in ET’s stock price has lifted its forward distribution yield to an attractive 7.6%, making it an excellent dividend play.
Dividend Stock #2: Realty Income
If you’re looking for a dependable dividend stock that can generate consistent income no matter what the market throws your way, Realty Income (O) should be on your radar. Known as “The Monthly Dividend Company,” this real estate investment trust (REIT) has built a strong track record of paying and growing dividends, making it a favorite among income-focused investors.
Since 1994, Realty Income has increased its dividend 129 times, with an impressive compound annual growth rate (CAGR) of 4.3%. This steady growth is fueled by a high-quality real estate portfolio that provides reliable earnings and cash flow.
The company owned or held stakes in 15,621 properties, leased to 1,565 tenants across various industries as of Dec. 31, 2024. Many of these are long-term net lease agreements. This structure provides stable rental income, supporting the company’s ability to offer consistent and growing dividends.
Another key advantage of Realty Income is the resilience of its rental income. A remarkable 91% of its total rent comes from properties either resistant to economic downturns or unaffected by e-commerce pressures. In other words, Realty Income’s tenants continue paying rent even during tough times.
Adding to its stability, the REIT boasts a portfolio occupancy rate of 98.7%, reflecting strong demand for its properties. Many of its tenants operate recession-resistant businesses, ensuring a steady stream of rental income that supports its high dividend yield.
Wall Street analysts have given Realty Income a “Moderate Buy” consensus rating. It offers an attractive forward dividend yield of 5.4%, making it a compelling choice for those seeking passive income in all market conditions.
