3 High-Yield Dividend Stocks to Buy Right Now to Boost Your Passive Income

Buying dividend stocks is one of many ways to generate passive income. Many companies offer attractive yields that are much higher than the S&P 500's average, which is currently below 1.5%.

Dominion Energy (NYSE: D), Western Midstream Partners (NYSE: WES), and Chevron (NYSE: CVX) stand out to a few Fool.com contributors for their higher dividend yields. Here's why they believe these stocks are great options for those seeking ways to boost their passive income.

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Dominion Energy is working back to dividend growth

Reuben Gregg Brewer (Dominion Energy): Some turnarounds are very risky, with companies working back from the brink of financial disaster. Then there are the turnarounds like the one Dominion Energy is undertaking. Dominion is basically a well-run utility that got over its skis because of an overly complicated business model.

It has been slimming down by selling assets such as pipelines and natural gas utilities. Now it is largely just a regulated electric utility operating in attractive regions. That makes the 4.8% yield on offer fairly attractive, noting that the average utility yields only around 2.9%.

Investors can buy for the yield, with management stating clearly that the dividend is safe at current levels as the turnaround progresses. What the dividend isn't doing, however, is growing. That will be a problem for some income-focused investors and really highlights the current turnaround effort.

D data by YCharts. EBITDA = earnings before interest, taxes, depreciation, and amortization. TTM = trailing 12 months.

Dominion is currently working on strengthening its financial position and trimming its payout ratio so that it's more in line with industry peers. Essentially, the heavy lifting here is on the balance sheet. Progress is being made, but it will probably take at least another few years before dividends are reliably growing again because the payout ratio remains elevated. But with earnings projected to grow between 5% and 7% a year, that, too, will change for the better in time.

A payout ratio below 70% will likely be a major dividend turning point. Meanwhile, while you wait for dividend growth to resume, you get to collect that well-above-average yield, which seems like a reasonable trade-off.

A high-octane income stream

Matt DiLallo (Western Midstream Partners): Western Midstream Partners is a master limited partnership (MLP) that owns and operates midstream assets that gather, process, and transport oil and natural gas for energy companies, including its parent company, Occidental Petroleum. Most of its assets generate stable fee-based cash flows, which support a cash distribution that yields nearly 9.5%.

More often than not, a payout approaching 10% is a red flag. However, that's not the case with Western Midstream Partners. The MLP expects to produce $1.3 billion to $1.5 billion in free cash flow this year. That's enough money to cover its lucrative distribution and planned capital expenditures to maintain and grow its business with room to spare.

Meanwhile, the company has a strong balance sheet, with its leverage ratio currently below its 3.0 times target. That gives it ample financial flexibility to make bolt-on acquisitions and approve additional growth capital projects as opportunities arise. It's targeting organic investments that deliver mid-teens returns and acquisitions that enhance its asset footprint.

Western Midstream's growth investments and financial flexibility fuel its view that it can grow its already monster distribution at a low- to mid-single-digit rate in the future. It recently hiked its payout by 4%. The company's high-yielding and growing distribution can boost your passive income as long as you're comfortable with receiving the Schedule K-1 federal tax form that the MLP sends its investors each year.

A proven dividend growth stock

Neha Chamaria (Chevron): With lower oil prices triggering a sell-off in oil stocks, shares of Chevron have slumped nearly 20% over the past month and a half as of this writing. The drop has pushed the oil stock's yield to 5%, making it an attractive dividend stock to buy now for years of passive income.

Chevron has been an incredible dividend stock when it comes to stability and dividend growth. It has increased its dividend for 38 consecutive years, including a 5% hike earlier this year. Chevron is on solid footing right now and should be able to continue its dividend increase streak for years to come. In 2024, the oil major returned a record $27 billion in cash to shareholders, including $11.8 billion in dividends.

Chevron expects to grow production by a compound annual rate of 6% through 2026 and could generate $9 billion in incremental free cash flow between 2024 and 2026 at a Brent crude oil price of $60 per barrel. Its cash flows could grow faster if Chevron wins the ongoing arbitration proceedings and acquires Hess to gain a stake in Guyana's oil-rich Stabroek Block. All that excess cash, with or without the Hess acquisition, should mean bigger dividends for Chevron shareholders. That makes Chevron a highly reliable, high-yield dividend stock to buy now.

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Matt DiLallo has positions in Chevron. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has positions in Dominion Energy. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Dominion Energy and Occidental Petroleum. The Motley Fool has a disclosure policy.