3 High-Yielding Dividend Stocks That Retirees Can Rely on for Recurring Income

If you're in retirement or approaching it, and are looking for some relatively safe income stocks to hold, I've got three excellent ones to consider. Verizon Communications (NYSE: VZ), Home Depot (NYSE: HD), and Duke Energy (NYSE: DUK) all pay high dividends, with their payouts being well above the S&P 500 average of 1.1%. Not only do their dividend payments look safe, but they have been rising over the years.

Here's a closer look at these stocks and why they can be ideal investments to put in your portfolio if your priority is to collect some recurring cash flow.

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Verizon Communications

It's not easy to find a stock that pays 6.1% in dividends, and that's also a fairly safe buy, but Verizon definitely fits the criteria. What retirees will love about this stock is its consistency and reliability. It generates modest single-digit growth, but it's enough to ensure that its dividend continues to grow.

Verizon has raised its payout for 20 consecutive years, which is crucial for income investors, as that commitment to growth can help at least offset some of the effects of inflation. The company's current quarterly dividend is $0.7075, and it has risen by 25% over the past decade, which averages out to a compounded annual growth rate (CAGR) of 2.3%.

Shares of Verizon have risen by 15% this year, but with the stock trading at 11 times trailing earnings, it's not a terribly expensive investment to own. This is a great example of a blue chip dividend stock that retirees can confidently hang on to for the long haul.

Home Depot

Concerns around slowing economic conditions and a pullback on discretionary spending have been weighing on Home Depot's stock over the past year, as it's down 21%. The home renovation giant thrives when people are buying and renovating homes, and unfortunately, the real estate market just isn't that strong these days.

But over time, that's likely to change. Home Depot has a robust business, and its stores are often the go-to places for people taking on home repair and renovation projects. While it's struggling to generate much growth these days, that's more to do with the economy than anything else. In its most recent fiscal year (which ended on Feb. 1), its sales rose by just over 3%. Over time, conditions will improve, and Home Depot should get back to generating stronger growth.

In the meantime, it's still an excellent dividend stock. It yields 3.1%, and the company has more than tripled its dividend over the past decade, as the quarterly payout has gone from $0.69 to $2.33. That averages out to a CAGR of 12.9%.

Duke Energy

Rounding out this list is Duke Energy stock, which pays 3.5%. Duke is a leading energy company in the country that serves millions of people. Utility companies can be highly valuable income investments to own because they generate stable and predictable income, which, in turn, allows them to provide their shareholders with stable dividend payments.

The company has been steadily growing its business over the years, with revenue rising from just under $29 billion in 2022 to more than $32 billion this past year. While it's by no means a growth machine, that type of steady growth enables it to support and grow its dividend. Over the past 10 years, the company's dividend has increased by 29%, averaging a CAGR of 2.6% during that stretch.

The stock trades at 19 times its trailing earnings, which is well below the S&P 500 average of 27. In addition to being a modestly priced stock, it's also a good option if you want stability, with Duke's stock averaging a beta of just 0.40 over the past five years, indicating that it doesn't follow the market's movements too closely. Whether you want to reduce risk or just collect a great yield, Duke Energy can be a top stock to add to your portfolio for the long term.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Duke Energy and Verizon Communications. The Motley Fool has a disclosure policy.