Want Another $500 in Annual Dividend Income? Invest $6,900 in These 3 High-Yield Stocks.

Key Points

• Altria Group's cigarette sales are in decline, but smokeless options are picking up the slack.

• Healthpeak Properties is a leading healthcare-related real estate investment trust.

• Ares Capital is an enormous business development company with a 16-year history of steady-to-rising dividend payouts.

• 10 stocks we like better than Altria Group ›

Would your budget benefit from a significantly larger stream of passive income? There are many ways to make that happen, but I don't know of any that are easier than buying high-yield dividend stocks.

Shares of Altria Group (NYSE: MO), Healthpeak Properties (NYSE: DOC), and Ares Capital (NASDAQ: ARCC) have been offering an average yield of 7.3% at recent prices. With such high yields, folks who invest $6,900 evenly among these three stocks could receive over $500 in annual dividend payments.

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Here's a closer look at each company to see how they could make excellent additions to an income-generating portfolio.

Image source: Getty Images.

1. Altria Group

Shares of the company that sells Marlboro brand cigarettes in the U.S. have risen about 15% over the past 12 months. Cigarette volumes are down, but investors have been encouraged by results for its smokeless-product offerings.

Disposable vaporizers that deliver lots of nicotine for a fraction of the price of a pack of Marlboros have been a challenge. Marlboro shipment volume dropped by 11.4% year over year in the second quarter.

The company lost a lot of market share to disposable e-vapor products that evade the regulatory process. Despite that, second-quarter revenue -- net of excise taxes -- declined by just 0.4% year over year. Top-line sales have been declining slowly, but margin expansion has allowed Altria Group's bottom line to grow. Second-quarter operating income climbed by 4.4% year over year.

Altria stock has been rising because it looks like the company's other nicotine-delivery products can offset Marlboro losses. Oral tobacco product sales rose by 6% year over year, net of excise taxes.

The company could also see a tailwind from increasing oversight of unauthorized nicotine products. Over the past 90 days, the Food and Drug Administration (FDA) has issued 58 warning letters to importers and retailers who sell Geek Bar and similar unauthorized e-vapor products.

Altria Group shares offer a 6.7% yield at recent prices, and another dividend raise is probably around the corner. The company raised its dividend payout last August, which was the 59th payout raise announced in 55 years.

2. Healthpeak Properties

If there's one thing you can count on, it's rising healthcare needs. Healthpeak Properties is a real estate investment trust (REIT) focused on outpatient medical buildings, laboratories used by drug developers, and retirement communities. Buying shares of this company is an easy way for income-seeking investors to follow the unstoppable healthcare trend.

Shares of Healthpeak offer a 6.9% dividend yield at recent prices.

Following the COVID-19 pandemic, institutional investors' enthusiasm for biotechnology start-ups fell off a cliff. Healthpeak rents labs to established pharmaceutical companies, start-up biotechs, and everything in between. Lack of demand for lab space from start-ups is a challenge this REIT fought by merging with Physician's Realty, an owner of medical office buildings, last year.

Healthpeak acquired Physicians Realty in an all-stock transaction and had to reduce its dividend payment due to the creation of new shares. Investors can reasonably expect significant dividend payout raises in the years ahead.

In the second quarter, adjusted funds from operations (FFO), a proxy for earnings used to evaluate REITs, rose to $0.44 per share. This is more than enough to keep up with monthly dividend payments, which are currently set at $0.305 per share per quarter.

3. Ares Capital

Ares Capital is a business development company (BDC). These special entities exist to fill the hole left by traditional banks, which hardly ever give direct loans to businesses anymore.

Starved for capital, businesses with millions in annual revenue are eager to borrow at interest rates that you might find surprising. During the third quarter, the BDC reported a 10.9% average yield on the debt securities in its portfolio.

Shares of Ares Capital offer an 8.4% yield at recent prices. One-time, extra dividend payments in past years make the stock look more unpredictable than it is. Investors seeking a reliable income stream will be glad to know this company's quarterly payout has risen or remained stable since 2009.

Lending directly to midsize businesses isn't the easiest banking operation, but Ares Capital has more resources than most of its peers. It's externally managed by a subsidiary of Ares Management, a leader in the alternative investment space, with about $546 billion in assets under management.

Ares Capital can boast a highly experienced team of underwriters. Just 1.2% of its loans were on non-accrual status at the end of June. Adding some shares to a diversified portfolio now looks like a great way to build up your passive-income stream.

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Cory Renauer has positions in Ares Capital. The Motley Fool recommends Healthpeak Properties. The Motley Fool has a disclosure policy.