3 Magnificent High-Yield Dividend Stocks to Buy and Hold

Should income investors worry about the increased market volatility and uncertainty? Not if you own the stocks of companies that are built to last and offer dependable dividends.

If you're looking for such stocks, you have plenty of great alternatives. Some of them pay especially juicy dividends. Here are three magnificent high-yield dividend stocks to buy and hold.

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1. Ares Capital

Ares Capital (NASDAQ: ARCC) is the largest publicly traded business development company (BDC). It provides financing to middle-market businesses and has generated total returns since its initial public offering in 2004 that are roughly 40% higher than those of the S&P 500 (SNPINDEX: ^GSPC).

BDCs must return at least 90% of their profits to shareholders as dividends to be exempt from federal income taxes. Ares Capital's forward dividend yield is a lofty 10.5%. The company typically pays a high yield. It's even higher than normal, though, because BDC stocks are under significant pressure, in part because of concerns that artificial intelligence (AI) will disrupt the business models of software companies in its portfolio.

Around 24% of Ares Capital's portfolio companies operate in the software and services industry. However, management remains confident that its clients are "highly resistant" to AI disruption. Ares Capital President Jim Miller stated in the fourth-quarter earnings call that "there really would have to be a whole lot of value destruction that would occur before we as a lender lose a dollar."

I think the sell-off of SaaS stocks is overdone. The good news, though, is that it has created a tremendous opportunity to buy Ares Capital at a discount and lock in a fantastic yield.

2. Enbridge

Enbridge (NYSE: ENB) ranks among the most intriguing energy stocks, in my view. The company operates 18,085 miles of crude oil pipeline and 19,373 miles of natural gas pipeline. It's also the largest natural gas utility in North America by volume, serving around 7.1 million customers in five U.S. states.

Income investors should really like Enbridge's forward dividend yield of 5.3%. Even better, though, the company has increased its dividend for 31 consecutive years. That isn't the only impressive streak for Enbridge. The company has also met or exceeded its financial guidance for 20 consecutive years.

Enbridge's management team describes the business as "low-risk" and "utility-like." I agree with that characterization. After all, we're talking about a company that transports 30% of the crude oil produced in North America and 20% of the natural gas consumed in the U.S.

Will Enbridge deliver jaw-dropping growth? Probably not. However, management has identified roughly $50 billion of growth opportunities through 2030. That should translate to around 5% average annual earnings growth over the long term -- an attractive level factoring in Enbridge's high yield.

3. Realty Income

Realty Income (NYSE: O) is the sixth-largest global real estate investment trust (REIT). It owns 15,511 properties spread across all 50 U.S. states, the U.K., and eight other European countries.

Like Enbridge, Realty Income has a sterling dividend track record. The REIT has increased its dividend for 31 consecutive years. Its forward dividend yield tops 5%. One bonus of Realty Income is that it pays monthly dividends.

This REIT stock is also remarkably resilient. Realty Income has outperformed the S&P 500 during 11 of the 13 drawdowns of 10% or more since its shares began trading on the New York Stock Exchange in 1994. The company has delivered positive total operational returns (adjusted funds from operations growth plus dividend yield) for 30 years.

Want more good news? Realty Income's growth prospects are strong, especially in the U.K. and Europe, where the market is largely unpenetrated.

Keith Speights has positions in Ares Capital, Enbridge, and Realty Income. The Motley Fool has positions in and recommends Ares Capital, Enbridge, and Realty Income. The Motley Fool has a disclosure policy.