3 High-Yield Dividend Stocks for 5-Year Portfolio Growth

Energy Transfer (NYSE:ET) stands out as a dominant force in midstream energy infrastructure, operating over 120,000 miles of pipelines that transport natural gas, crude oil, and refined products across key U.S. regions. This positioning makes ET a critical link in North America’s energy supply chain, serving utilities, refiners, and producers with essential transport and storage services. The company’s current dividend yield of approximately 7.7% is supported by adjusted funds from operations that comfortably cover payouts, with the stock trading at roughly 9 times forward AFFO.

Recent strategic expansions, including the Lake Charles LNG project and acquisitions like Crestwood Equity, have diversified ET’s revenue streams while locking in long-term contracts that shield against commodity price volatility. Analysts project 7% to 8% annual distribution growth through 2030, driven by rising U.S. natural gas exports and renewable integrations such as carbon capture pipelines. With over 90% of earnings derived from stable, fee-based contracts, ET’s business model ensures resilience even during energy transition periods, while potential upside exists from Permian Basin output surges.

Trading at a forward P/E of 11, Energy Transfer stock represents a discount to sector peers, offering compelling value for income-focused investors. For those maintaining positions through 2030, the combination of substantial yield and modest appreciation could deliver compounded annual returns exceeding 10%, making ET a cornerstone holding for dividend portfolios seeking energy sector exposure.

Pfizer (NYSE:PFE), the global pharmaceutical leader, maintains a robust portfolio spanning oncology, immunology, vaccines, and rare diseases, with over 100 programs in clinical development stages. The company’s blockbuster products, including Eliquis and Prevnar, generate billions in annual sales, providing a solid foundation for its approximately 6.4% annual dividend yield. Despite post-pandemic challenges in the COVID-19 vaccine market, Pfizer’s dividend enjoys strong free cash flow support, with a healthy payout ratio that has stabilized following the revenue normalization.

The company’s strategic $43 billion acquisition of Seagen significantly bolsters its oncology focus, with treatments like Padcev showing strong growth potential. Wall Street analysts forecast 4% to 6% annual earnings growth, driven by new product launches in areas including RSV vaccines and weight-loss candidates. Pfizer’s substantial scale—evidenced by $22 billion in full-year operating cash flow—combined with its defensive healthcare exposure makes it an attractive hold candidate for the next five years.

Trading at just 8 times forward earnings, Pfizer appears undervalued relative to its 15% return on equity. Regulatory tailwinds and biosimilar opportunities could help offset generic competition pressures, while potential future buybacks could enhance shareholder value. Investors can expect consistent dividend increases alongside total returns potentially maintaining mid-single-digit compounded rates, prioritizing stability over high-risk growth bets in the evolving healthcare landscape.

Realty Income (NYSE:O), famously known as ‘The Monthly Dividend Company,’ owns an extensive portfolio of over 15,000 commercial properties leased to recession-resistant tenants including dollar stores, pharmacies, and grocers across the U.S., U.K., and Europe. The company’s net lease model—which shifts insurance, maintenance, and tax responsibilities to tenants—ensures predictable rental income streams. With a current yield of 5.3%, Realty Income’s monthly distributions are covered 1.4 times by adjusted funds from operations, supported by 31 consecutive years of dividend increases that affirm its Dividend Aristocrat status.

The REIT’s impressive 98% occupancy rate and relatively short eight-year average lease terms provide substantial downside protection, while strategic acquisitions totaling $3 billion in 2024 continue expanding its 100 million square foot property footprint. Analysts project 3% to 5% FFO growth, supported by inflation-linked rent escalators averaging 1.5% annually. Realty Income’s essential-retail focus has consistently outperformed broader real estate investment trusts during e-commerce transitions, demonstrating the durability of its business model.

Geographic diversification and creditworthy tenants like Walmart (NYSE:WMT) further mitigate investment risks, creating potential for 7%+ total returns through the combination of yield and 2% to 3% annual appreciation. Trading at 14 times AFFO, Realty Income offers a compelling entry point for passive income investors seeking steady compounding through monthly dividends and moderate capital appreciation over a five-year horizon.

The combination of Energy Transfer, Pfizer, and Realty Income provides investors with strategic exposure to three non-correlated sectors—energy, healthcare, and real estate—creating a diversified foundation for income generation and capital preservation. Each company offers distinct advantages: Energy Transfer’s critical infrastructure assets, Pfizer’s defensive healthcare positioning, and Realty Income’s recession-resistant property portfolio collectively create a balanced approach to high-yield investing.

All three dividend stocks share common strengths that make them suitable for five-year holding periods, including strong payout coverage, analyst buy ratings, and business models designed to withstand economic volatility. Their yields ranging from 5.3% to 7.7% provide substantial income buffers against market fluctuations, while their underlying fundamentals support both dividend sustainability and potential distribution growth. For investors focused on total returns through dividend reinvestment, these picks represent carefully vetted opportunities to build resilient portfolios capable of delivering consistent performance across various market conditions.