My 3 Favorite High-Yield Dividend Stocks to Buy This September (1 Yields 6.4%)

Realty Income (NYSE:O), Verizon (NYSE:VZ), and Energy Transfer (NYSE:ET) are three of my favorite high-yielding dividend stocks. I personally own them all and would buy even more this September. They all currently offer attractive yields, with Realty Income recently at 5.2%, Verizon at 5.7%, and Energy Transfer leading the pack at 6.4%.

However, those big yields aren't the only reason they're my favorite high-yielding dividend stocks to buy in September.

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Realty Income

I think Realty Income is the best dividend stock you can buy. It offers a high yield (more than 5%, several times the S&P 500's 1% yield) and also pays its dividend monthly. Meanwhile, it has increased its payment 135 times since its NYSE listing in 1994 -- including the last 115 consecutive quarters -- growing it at a 4.1% compound annual rate.

The real estate investment trust (REIT) has a diversified real estate portfolio (retail, industrial, gaming, data center, and other properties) secured by long-term net leases with many of the world's leading companies. Net leases provide very stable rental income because tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. Meanwhile, Realty Income has a strong financial profile, including a conservative dividend payout ratio (less than 75% of its adjusted funds from operations) and a strong investment-grade balance sheet (A-rated credit).

There are about $15 trillion in real estate assets on U.S. and European companies' balance sheets, representing a massive investment opportunity for Realty Income. Data centers are a large and growing opportunity (over $1 trillion). It recently formed a joint venture to invest in data centers across the U.S. and Europe, with initial seed assets valued at over $6 billion. Realty Income has ample investment capacity and opportunities to support continued dividend growth.

Verizon

Verizon has increased its dividend for 19 straight years. The U.S. telecom giant has a massive recurring revenue base from its millions of wireless and broadband subscribers. That provides it with the cash flow to invest in maintaining and expanding its network, while returning cash to shareholders.

The company generated $18.4 billion in cash flow from operations during the first half of this year, easily covering its capital expenditures ($8.2 billion) and dividend ($5.9 billion). It used the remaining cash to repurchase shares ($3.5 billion) and strengthen its balance sheet. Verizon is on track to generate over $21.5 billion in free cash flow after capital expenditures this year, up more than 9% from last year. The company's growing free cash flow should support continued dividend increases, with its 20th consecutive annual raise likely to come this September.

Energy Transfer

Energy Transfer tops this group with the highest dividend yield. The master limited partnership -- it sends investors a Schedule K-1 Federal tax form each year -- aims to increase its distribution by 3% to 5% each year. It has raised its payment for 19 consecutive quarters.

The energy company operates an extensive midstream infrastructure network to support the flow of oil and gas from production basins to demand centers. Fee-based arrangements underpin about 90% of its earnings, providing it with stable cash flows. Energy Transfer generated nearly $5.3 billion of distributable cash flow during the first half of this year, easily covering the $2.3 billion distributed to investors.

Energy Transfer reinvests its retained cash flow to expand its energy midstream network. It currently plans to invest $5.6 billion-$5.9 billion into organic expansion projects this year, including new natural gas pipelines, oil pipeline expansions, and new natural gas liquids infrastructure. The MLP has secured projects that should enter commercial service through early 2030, providing strong visibility into future distribution growth.

This trio offers more than a high yield

Realty Income, Verizon, and Energy Transfer aren't three of my favorite high-yielding dividend stocks for their yields alone. They work together to provide sector diversification (real estate, telecom, and energy infrastructure) and differing yields and growth profiles. That helps lower the overall risk profile of my income streams, as each sector has specific risks (e.g., interest rate sensitivity for REITs, competition among telecoms, and commodity price volatility in the energy sector) that the others can help mitigate. They also have strong dividend growth track records, which should continue. This combination of features is why they're my favorite grouping of high-yield dividend stocks to buy this month.

Matt DiLallo has positions in Energy Transfer, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.