I Can't Wait to Buy More of These 3 Top High-Yield Dividend Stocks in October

As a lifelong growth investor, I find myself stopping at yield signs these days. My affinity for disruptive companies posting monster growth will never truly go away, but this is also a great time to warm up to promising turnaround stories that also happen to be cutting chunky dividend checks for their investors.

I already own shares in Sirius XM Holdings (NASDAQ: SIRI), Target (NYSE: TGT), and Realty Income (NYSE: O). They are all currently yielding more than the country's top money market funds. Throw in a history of rising distributions, fixed income rates likely heading lower in the coming months, and the goal of capital appreciation, and you have three high-yielding stocks that I can't wait to buy more of later this month. Let's take a closer look.

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1. Getting serious about Sirius XM

Satellite radio may have been a booming business 20 and possibly 10 years ago, but it's marching to the beat of a different drummer these days. Sirius XM -- the country's lone player in this space after the corporate combination of XM and Sirius 17 summers ago -- has gone from growing pains to slowing pains. Revenue is declining slightly for the third year in a row.

This may seem like a lousy way to start a stock pitch, but hear me out. There's more to this story than you probably think.

Sirius XM has seen a gradual decline in its premium subscribers, but it's still treating 33 million accounts to engaging audio content accessible through a mobile app or a car's built-in satellite receiver. Sirius XM remains highly profitable, trading for just eight times this year's projected earnings. It's generous with returning money to its investors through stock buybacks and rising payouts. It's currently yielding 4.8%, having boosted its quarterly distribution rate every year since initiating a dividend policy eight years ago.

Its recent meandering performance is more a matter or attraction than retention. It has a loyal fan base, and its monthly churn rate of 1.5% is near a historic low. Bringing in new subscribers -- particularly young ones -- has been the rub. This headwind could become a tailwind soon. Sirius XM has been striking deals with podcasters and radio show hosts who are magnetic to millennials. Low gas prices, companies calling employees back to in-office work, and a lot of old cars on the road ripe for replacing should jump-start the surge in auto usage that is the bloodline to new Sirius XM sign-ups.

Sirius XM sees better days ahead. It's targeting $1.5 billion in free cash flow come 2027, comfortably ahead of the $1.15 billion it's modeling for this year. The stock upticks should outpace the distribution hikes, making this a win-win play through capital appreciation and rising dividends. Want one final nudge? Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has been adding to its sizable stake in Sirius XM. It now owns more than 37% of the radio operator.

2. Right on Target

Target may not seem so chic these days, but the stock itself certainly qualifies as cheap. The mass market retailer is trading for a mere 11 times the midpoint of its 2025 profit guidance. Investors are worried about Target giving up some market share lately, a new look for the discount department store chain that routinely feasted at the expense of other outlets.

The stock's hearty 5.1% yield is sustainable, even if it may seem like a bad look with comps recently clocking in negative at Target. The aspirational retailer is also a Dividend King, having boosted its distributions for 54 straight years. There have been some fumbles, but this is also why you can buy the stock near its lows with a yield north of 5%.

Target is making the necessary changes to regain relevancy. Like an obedient driver on a highway, Target's run of hikes will probably hit 55 next year. The retail stock is a strong "buy low" candidate here for the opportunistic stock shopper.

3. From kings to Realty royalty

Finally we have a company that sends you monthly love letters in the form of steadily rising distributions. Realty Income has come through with 132 hikes since going public 31 years ago. Put another way, Realty Income has come through with 112 quarters of increased payouts with a handful of bonus boosts along the way.

As a real estate investment trust (REIT), Realty Income isn't a household name for most people. You probably know many of the tenants in its portfolio of more than 15,600 commercial real estate properties.

Nearly 80% of its geographically diversified tenants fall into the retail category, but don't assume that these long streaks of hikes will end the moment that the economy runs into some turbulence. There has been plenty of that over the past three decades, and Realty Income is still going strong. Its largest industry concentrations are in supermarkets and convenience stores that offer non-discretionary goods.

Its tenants stick around. Its occupancy rate is currently 98.6%, and even during the Great Recession or the more recent COVID-19 crisis, Realty Income has never closed out a year with occupancy below 96.6%. Its yield stands at 5.5% after last month's hike, and investors can expect another increase before the end of this year.

Rick Munarriz has positions in Realty Income, Sirius XM, and Target. The Motley Fool has positions in and recommends Berkshire Hathaway, Realty Income, and Target. The Motley Fool has a disclosure policy.