3 High-Yield Dividend Stocks With 5%+ Yields Analyzed

Dividend investing has long been recognized as a reliable strategy for generating passive income and building long-term wealth, particularly during periods of market stagnation or decline. The appeal lies in regular cash distributions that continue regardless of market direction, coupled with the powerful compounding effect when dividends are reinvested. However, the pursuit of high yields requires careful scrutiny, as yields above 5% often signal potential underlying issues such as declining earnings, excessive debt, or sector-specific pressures that could lead to dividend cuts.

The critical differentiator between sustainable high-yield opportunities and value traps lies in fundamental analysis. Investors must look beyond the headline yield number to assess payout sustainability through metrics like coverage ratios, balance sheet health, and business model durability. Companies with strong cash flow generation, manageable debt levels, and resilient business models can support attractive yields without compromising financial stability. The three stocks examined—Realty Income, Enterprise Products Partners, and Kenvue—each demonstrate how 5%+ yields can be both safe and attractive when backed by robust operational fundamentals.

Realty Income (NYSE: O) stands as a premier real estate investment trust (REIT) specializing in single-tenant retail properties leased to essential retailers including dollar stores, pharmacies, and convenience chains. The company’s business model centers on long-term net leases that require tenants to cover property taxes, insurance, and maintenance costs, creating highly predictable revenue streams. This structural advantage is reflected in the company’s impressive 98% occupancy rate maintained through the first half of 2025, demonstrating resilience even during economic downturns.

The REIT’s dividend credentials are exceptional, with 112 consecutive quarters of payout increases spanning three decades—earning it the nickname ‘The Monthly Dividend Company.’ With management guiding for adjusted funds from operations (AFFO) between $4.24 and $4.28 per share for 2025 and a planned $5 billion in new acquisitions, the foundation for continued dividend growth remains solid. The current 5.5% forward yield appears secure given the approximately 75% payout ratio relative to funds from operations and an investment-grade balance sheet. Trading at roughly 14 times AFFO—below its historical average—Realty Income offers value for income-focused investors seeking consistent, inflation-protected cash flow without the volatility typical of growth stocks.

Enterprise Products Partners (NYSE: EPD) operates as a leading midstream energy partnership with an extensive network of pipelines, storage terminals, and processing plants. Unlike upstream energy producers exposed to commodity price volatility, Enterprise derives approximately 82% of its revenue from fixed-fee contracts, providing remarkable stability during oil and gas market downturns. This business model has supported 27 consecutive years of distribution increases, making it one of the most reliable income generators in the energy sector.

The partnership’s financial strength is evident in its 1.6 times distribution coverage ratio in the most recent quarter, providing ample cushion for the current 6.9% forward yield. With a $6.7 billion project backlog scheduled to come online through 2027, management anticipates 4% to 5% annual distribution growth, further enhancing the income proposition. While the valuation at 10.8 times enterprise value-to-EBITDA aligns with sector peers, investors must consider the partnership structure’s tax implications, including K-1 form requirements, and potential energy sector volatility. For those comfortable with MLP mechanics and seeking high, growing income backed by critical infrastructure assets, Enterprise Products Partners represents compelling long-term value.

Kenvue (NYSE: KVUE), spun off from Johnson & Johnson in 2023, houses a portfolio of globally recognized consumer health brands including Tylenol, Neutrogena, Listerine, and Band-Aid. Despite challenging post-IPO performance with shares down approximately 15% from peak levels, the underlying business demonstrates resilience with second-quarter results showing 3.2% organic sales growth driven by pricing power and steady demand for everyday health products. Management’s reaffirmation of full-year guidance signals confidence in the operating model’s durability.

The company initiated an annual dividend of $0.80 per share, representing a 5.6% forward yield that is covered more than twice by free cash flow. With a conservative 48% payout ratio and net debt-to-EBITDA of approximately 2 times, the balance sheet provides strong support for continued dividend payments. Trading at 13 times forward earnings with a 7.1% free cash flow yield, the stock offers attractive valuation metrics. While legal risks from inherited talc litigation remain a concern, the core portfolio operates independently and maintains strong brand equity. Patient investors willing to look past near-term uncertainty can acquire a high-quality consumer staples company at a reasonable price with substantial income generation potential.

The combination of these three high-yield dividend stocks provides investors with diversified exposure across real estate, energy infrastructure, and consumer health sectors. Realty Income offers monthly dividend reliability from essential retail properties, Enterprise Products Partners delivers exceptional cash flow coverage from fee-based energy infrastructure, and Kenvue provides brand strength with growth potential in consumer staples. Each company maintains sustainable payout ratios and business resilience despite their above-average yields.

This diversified approach balances income generation with stability and recovery upside, addressing the core challenge of high-yield investing: identifying companies where attractive yields are supported by fundamental strength rather than masking financial distress. For income-focused investors, this trio demonstrates that careful fundamental analysis can uncover opportunities where 5%+ yields represent sustainable income streams rather than value traps, providing a foundation for long-term wealth building through dividend compounding and cash flow generation.