3 High-Yield Dividend Stocks I'd Buy for Their Cash Flow Alone

High-yielding dividend stocks need to generate substantial cash flow to support their payouts. The best ones generate excess cash flow after covering their dividends. That provides them with low-cost growth capital, which supports rising dividends and share prices.

Here are three top high-yield dividend stocks I'd buy for their cash flow alone.

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Brookfield Infrastructure

Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP) is a leading global owner and operator of economically essential infrastructure. It invests in high-quality utilities, transport, midstream, and data assets. These assets generate very stable cash flow, as 85% comes from long-term contracts or regulated rate structures.

The company generated $709 million in funds from operations (FFO) in the first quarter of this year, up 10% year over year. Brookfield paid out 65% of its FFO in dividends during the first quarter (in the middle of its 60% to 70% target range). That comfortable payout ratio enables the global infrastructure operator to retain meaningful cash flow to reinvest in expanding its operations.

Brookfield currently has over $9 billion of expansion projects in the backlog that it expects to complete over the next two to three years. Notable projects include data center developments, behind-the-meter power solutions for data centers and AI factories, and funding two U.S. semiconductor fabrication facilities. These expansion projects help support Brookfield's plans to grow its FFO per share by more than 10% annually, which should drive 5% to 9% annual dividend growth. Add that robust growth rate to its high-yielding payout, and Brookfield has high-octane total return potential.

Energy Transfer

Energy Transfer (NYSE: ET) is a master limited partnership (MLP) focused on owning and operating energy infrastructure. The MLP, which sends a Schedule K-1 Federal tax form each year, generates very stable cash flow, as 90% of its income comes from fee-based sources.

The energy midstream company generated $2.7 billion of distributable cash flow during the first quarter, up 17% year over year. The MLP distributed nearly $1.2 billion of that cash to investors to support its high-yielding payout (6.8% yield). It retained the rest to reinvest in the partnership.

Energy Transfer currently expects to invest $5.5 billion to $5.9 billion into organic expansion projects this year. That's part of a multi-year backlog of projects that include several large-scale gas pipelines ($2.7 billion Hugh Brinson and up to $5.6 billion Desert Southwest Pipeline). It currently has projects underway that should come online through 2030. These projects will support continued distribution increases (3% to 5% annual target range) and grow the value of its unit price, driving solid total returns.

Realty Income

Realty Income (NYSE: O) is a leading global real estate investment trust (REIT). It owns a globally diversified portfolio (retail, industrial, gaming, and other properties) secured by long-term net leases with many of the world's leading companies. Those net leases provide it with very stable cash flow to support its high-yielding monthly dividend (4.9% current yield).

The REIT generated nearly $1.1 billion of adjusted FFO during the first quarter. It paid out about 70% of its cash flow in dividends. It's on track to generate over $980 million in adjusted free cash flow this year to reinvest in new income-generating real estate.

Realty Income is using its free cash flow and other capital sources (private capital vehicles, stock sales, and debt) to fund new investments ($9.5 billion in investment volume expected this year). It has been capitalizing on several new growth opportunities, including its first investment in Mexico and a joint venture to invest in data centers. These investments should support continued dividend increases (135 raises and 4.1% compound annual dividend growth since its public market listing in 1994). That growth-and-income combo should support strong total returns.

Cash-generating machines

Brookfield Infrastructure, Energy Transfer, and Realty Income are money-printing machines. That's giving them the funds to pay high-yielding dividends while also investing heavily in their continued growth. Those growth investments will drive dividend growth and stock price appreciation, enhancing their total returns. That's why their cash flow alone makes these high-yielding dividend stocks worth buying.

Matt DiLallo has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, Energy Transfer, and Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.