3 High-Yield Dividend Stocks I'd Buy With $5,000 Right Now

My top financial goal right now is to grow my passive income. I'm approaching the point where I can coast into an early retirement. However, I need to build a bridge until I can tap into my retirement accounts. My strategy is to grow my passive income to the point where it can cover my basic living expenses, allowing me to work less until I retire.

Investing in high-yield dividend stocks is core to my strategy. Here are three income stocks that I'd buy if I had $5,000 to invest right now.

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Ares Capital

Ares Capital (NASDAQ:ARCC) currently yields almost 10%. That's about 10 times higher than the S&P 500's 1% yield. Its monster dividend is a passive income maximizer.

The business development company (BDC) has an exceptional track record of paying dividends. It has delivered a stable-to-growing dividend for 17 straight years. That's a testament to its strong underwriting capabilities. It has achieved an average annual realized gain of 1% in excess of losses since its IPO. As a result, its direct loans and other investments have provided it with a durable, growing income stream to cover its dividend.

Ares Capital currently has more than adequate dividend coverage. Through the first half of this year, it has recorded $0.94 per share of core earnings and $0.14 per share in net realized gains, more than covering the $0.96 it paid in dividends. It also entered the year with a solid cushion of $1.38 per share of excess taxable income from last year, which it carried forward for distribution in 2026. With a healthy portfolio and balance sheet, Ares' dividend remains on a rock-solid foundation.

Energy Transfer

Energy Transfer (NYSE:ET) currently yields around 6.5%. The master limited partnership (MLP) -- which sends a Schedule K-1 Federal tax form each year -- has increased its distribution for 19 straight quarters. It aims to grow its high-yielding payout by 3% to 5% each year.

The MLP is in a strong position to achieve that target. It generated nearly $5.3 billion in distributable cash flow during the first half of this year, more than covering the $2.3 billion it paid in distributions. That's enabling it to retain billions of dollars for reinvestment.

Energy Transfer currently expects to invest $5.5 billion to $5.9 billion into growth capital projects this year, including oil and gas pipelines, new processing plants, and export terminal capacity expansions. It currently has projects underway that it expects to complete through early 2030. That adds significant visibility to support its distribution growth plan.

VICI Properties

VICI Properties (NYSE:VICI) yields almost 7%. The real estate investment trust (REIT) focused on experiential real estate, such as gaming, entertainment, and hospitality properties, has increased its dividend every year since its IPO in 2018. It has grown its payout at a 7% compound annual rate during that period, much faster than other REITs focused on triple-net-leased real estate (2.4% peer average).

The REIT's long-term, triple-net leases provide it with stable income that grows with inflation. About 45% of its leases feature inflation escalators this year, rising to 87% by 2035. Meanwhile, VICI Properties has a conservative dividend payout ratio (75% of its cash flow) and a solid investment-grade balance sheet, giving it the funding to invest in additional income-producing properties.

VICI Properties routinely makes sale-leaseback transactions to grow its portfolio. It recently bought seven casino properties in Nevada through a $1.2 billion sale-leaseback deal. The REIT also invests in development and expansion projects to support its tenants. For example, it recently secured a build-to-suit transaction to acquire and redevelop a resort in St. Croix ($75.5 million total investment). Additionally, it will invest in real estate-backed loans, providing a stable additional source of income.

Turning $5,000 into a meaningful income stream

If you split a $5,000 investment equally across this trio of high-yield dividend stocks, they'd generate nearly $400 in annual passive dividend income (7.7% blended yield). For comparison, a $5,000 investment in an S&P 500 index fund would only produce about $50 of annual dividend income.

What I like about this group is that this income should be durable and steadily rising. All three have grown their dividends over the years and should continue to do so. That's why I wouldn't hesitate to invest $5,000 into them right now.

Matt DiLallo has positions in Ares Capital, Energy Transfer, and Vici Properties. The Motley Fool has positions in and recommends Ares Capital. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.