What Are the 5 Safest High-Yield Dividend Stocks to Buy Right Now?

While growth stocks get most of the attention in the markets these days, investors shouldn't forget the fact that high-yield stocks with safe, attractive, and growing dividends can also be great investments. This is especially true if you want to help supplement your income later in retirement.

Five of the safest high-yield dividend stocks you can buy right now are: Verizon Communications (NYSE: VZ), Realty Income (NYSE: O), PepsiCo (NASDAQ: PEP), Enterprise Products Partners (NYSE: EPD), and MPLX (NYSE: MPLX).

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Let's take a look at why these five stocks have safe and growing dividends and high yields.

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1. Verizon Communications (6.5% yield)

Verizon has raised its dividend each year for the past 18 years. As the largest wireless carrier in the U.S., it has a nice steady business that generates a boatload of free cash flow, which is one of the keys to a safe and growing dividend.

Over the past 12 months, it's produced $18.7 billion in free cash flow and paid out $11 billion in dividends. That's good for a dividend coverage ratio of 1.8, giving the company plenty of cash to both invest in its business and increase its dividend. At the same time, Verizon's balance sheet is in good shape, with a leverage ratio on its unsecured debt (net unsecured debt divided by trailing-12-month adjusted EBITDA) of 2.3.

Given those factors, Verizon's dividend looks safe and poised to continue to grow.

2. PepsiCo (4.4% yield)

While its stock has struggled of late, PepsiCo has been able to increase its dividend each year for more than 50 years straight. The company's portfolio of drinks and snacks is generally pretty steady, though it's been looking to add more healthy snacks and recently acquired the fast-growing healthy soda brand Poppi.

Last year, the company generated $7.2 billion in free cash flow and paid out the same amount in dividends. While that doesn't leave much extra room, the company has stated that returning cash to shareholders is one of its biggest priorities. It has also had a few years of elevated capital expenditures (capex), including spending $5.3 billion last year to build out its IT infrastructure. As that begins to normalize, its coverage ratio will improve.

Look for the company to turn around its business and continue to raise its dividend.

3. Realty Income (5.6% yield)

Realty Income has increased its dividend regularly for the past 30 years. As an added bonus, it pays its dividends on a monthly basis.

The real estate investment trust (REIT) has a steady, resilient business. While it has expanded into other areas, it typically leases out its properties to economically resilient retailers, employing long-term triple net leases with 10- to 20-year initial terms and rent escalation clauses. This gives the company strong visibility into future cash flow.

For REITs, one of the best ways to determine the safety of their dividends is based on their adjusted funds from operations (AFFO). This is one of the main metrics REITs use to measure the cash flow generation of their ongoing business operations. Last quarter, Realty Income's AFFO rose 3% to $1.06 per share, which was well ahead of the $0.796 per share in dividends it paid out in the quarter. That equates to a coverage ratio of over 1.3.

Realty Income's stock went through a rough patch due to declining commercial property values, which can be sensitive to rising interest rates. However, with rates settling into a steady range, the REIT should become a solid performer with a rising dividend.

4. Enterprise Products Partners (6.9% yield)

Pipeline company Enterprise Products Partners has raised its distribution in each of the past 26 years. The company has a steady, predictable business model, as historically around 85% of its cash flow comes from fee-based operations that aren't exposed to energy prices or commodity spreads. Most of its contracts have inflation escalators, and it likes to tack on take-or-pay provisions, allowing it to get paid whether or not customers use its services.

Distributions are well covered by its distributable cash flow, which is operating cash flow minus maintenance capex. On this basis, it had a coverage ratio of 1.7 over the past 12 months. The midstream operator also has a strong balance sheet, with investment-grade debt ratings and low leverage for the industry.

With the company's increasing opportunities for growth, Enterprise Products Partners is one of the best high-yield stocks to buy right now.

5. MPLX (7.4% yield)

Not only does midstream operator MPLX have the highest yield on this list, but it's also grown its distribution the quickest. It increased its payout by 12.5% in 2024, marking the third straight year it has grown its distribution by double-digit percentages. Overall, the company has increased its distribution every year since it went public back in 2012. At the same time, it had a robust coverage ratio of 1.5 last quarter, based on distributable cash flow.

The company is seeing solid growth in its natural gas and NGL (natural gas liquids) segment, which handles around 10% of the natural gas produced in the U.S. Meanwhile, its crude oil logistics segment largely serves its parent company, refiner Marathon Petroleum, providing steady, reliable cash flow. Like Enterprise Products Partners, it also has one of the best balance sheets in the midstream space, with a leverage ratio (face value of total debt divided by trailing-12-month adjusted EBITDA) of only 3.3.

With an attractive yield and nicely growing distribution, MPLX is a great option for income-oriented investors.

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Geoffrey Seiler has positions in Enterprise Products Partners. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Enterprise Products Partners and Verizon Communications. The Motley Fool has a disclosure policy.