My 3 Favorite High-Yield Dividend Stocks to Buy in February (1 Currently Yields 6.8%)

I love investing in income-generating assets. The passive income they produce provides me with a sense of financial independence. My long-term financial goal is to grow my sources of passive income to the point where they cover my basic living expenses, enabling me to reach financial freedom.

While I like most of my passive income investments, I have a few favorites. Brookfield Renewable (NYSE: BEPC)(NYSE: BEP), Main Street Capital (NYSE: MAIN), and Realty Income (NYSE: O) are my current favorite high-yielding dividend stocks to buy. Here's why I like them the most this month.

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Ample power to continue growing its payout

Brookfield Renewable recently increased its dividend by another 5%. The leading renewable energy dividend stock has grown its payout by at least that annual rate since 2011. It currently offers a 3.7% dividend yield, more than triple the S&P 500's level of 1.1%.

The company expects to deliver annual dividend growth of 5% to 9% going forward. It's in a strong position to achieve that target, given its outlook. Brookfield expects to grow its cash flow per share by more than 10% annually through at least 2030.

Several growth catalysts power that plan. Brookfield's vast renewable power platform generates steadily growing cash flow, underpinned by long-term contracts, most of which link revenues to inflation. Meanwhile, power prices are rising faster than inflation, enabling the company to lock in even more lucrative rates as legacy agreements expire. Additionally, Brookfield has a burgeoning backlog of renewable energy capacity under development and the financial flexibility to continue making value-enhancing acquisitions.

Dual sources of passive income

Main Street Capital is a business development company (BDC) that provides debt and equity capital to smaller private companies. Those investments generate interest and dividend income. As a regulated investment company, Main Street must distribute at least 90% of its taxable net income to shareholders to comply with IRS regulations.

The BDC does that through two dividend streams. It pays a monthly dividend set at a sustainable level. Main Street has never reduced or suspended its monthly dividend payment. Quite the contrary, it has grown its payments by 136% since its IPO in 2007, including a 4% increase over the past year. At its current payment level, Mainstreet's monthly dividend yields 5%.

Additionally, the BDC periodically pays supplemental quarterly dividends to achieve its minimum payout level. It has paid the same rate for the past few years. When adding these supplemental quarterly payments to the monthly dividend, Main Street Capital's total income yield increases to 6.8%.

A steadily rising income stream

Realty Income is a real estate investment trust (REIT) with a remarkable track record of dividend payments. It has declared 667 consecutive monthly dividends since its formation over 50 years ago. Meanwhile, the REIT has raised its dividend payment 133 times since its public market listing in 1994, including delivering 113 consecutive quarterly increases. Overall, it has grown its payout at a 4.2% compound annual rate over the last three decades. Realty Income's dividend currently yields 5.3%.

The REIT owns a diversified real estate portfolio secured by long-term net leases with many of the world's leading companies. These leases provide it with very stable rental revenue because tenants cover all property operating costs.

Realty Income has one of the strongest financial profiles in the REIT industry. That enables it to grow its portfolio of income-producing properties. With a $14 trillion total addressable market opportunity across the U.S. and Europe, Realty Income has plenty of room to continue growing its portfolio and dividend payment.

High-yielding and steadily rising payouts

Brookfield Renewable, Main Street Capital, and Realty Income pay high-yielding dividends backed by strong financial profiles. They also have an excellent track record of increasing their payments, which should continue. Because of that, they can supply me with lucrative and growing streams of passive income, which is why they're my favorite income stocks to buy this month.

Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, Main Street Capital, and Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.