3 High-Yielding Stocks That Investors Can Buy and Forget About

Key Points

• The stocks listed here pay more than 3% in dividends.

• Their payout ratios are sustainable, and these businesses have strong profit margins.

• These stocks have also all been increasing their dividend payments in recent years.

• 10 stocks we like better than Verizon Communications ›

Investing in a high-yielding stock can come with risks. While it's tempting to think of the dividend income you might generate from a stock that pays a high yield, there is the danger that a company slashes its dividend or suspends it, especially amid challenging economic conditions.

But there are at least three stocks out there offering above-average yields that are still safe options for income investors to consider today. They are: Verizon Communications (NYSE: VZ), Duke Energy (NYSE: DUK), and Kimberly-Clark (NASDAQ: KMB). Here's why you can safely hang on to these stocks for years, and why you should expect to see your dividend income from these three investments rise over time.

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Verizon Communications

At 6.3%, Verizon's dividend yield is well above average. By comparison, the S&P 500 average yield is just 1.2%. The big knock on Verizon today is that its business hasn't been growing much -- sales of $134.8 billion in 2024 were not a whole lot higher than the $133.6 billion it reported back in 2021.

But for dividend investors, there's good reason to stick with Verizon. It's a leading telecom provider, and over time, consumers will upgrade their phones and plans, which can spark more revenue growth in the future. However, with a strong profit margin of more than 13%, and the stock trading at just 10 times its trailing earnings, Verizon can be one of the better income investments to hang on to today. The company has also increased its dividend for 18 straight years, and its payout ratio remains sustainable at 64% of its earnings.

It may take some time for investors to warm up to the stock again, but that may happen if market conditions deteriorate and concerns rise about the overall economy -- this could be a safe-haven type of stock to hang on to. Buying Verizon stock today could prove to be a good move for the long term.

Duke Energy

Another attractive dividend stock to own is Duke Energy, whose payout yields 3.5%. The energy holding company manages multiple utilities that provide customers with electricity and natural gas, which are crucial services year-round. Investing in these types of businesses can give your portfolio a lot of long-term stability, and it's no surprise the stock has a fairly low beta of 0.36, which tells investors that this is a low-volatility investment to hang on to; it won't be as erratic as the overall market.

In the trailing 12 months, Duke has generated $30.9 billion in revenue with earnings on that totaling $4.7 billion, for a solid profit margin of 15%. With a stable business and high margins, this is an excellent example of a good stock to invest in for the long haul.

Duke's dividend only sweetens the deal, as the stock has paid dividends for 99 straight years. And in 10 years, its quarterly per-share dividend has risen by 31%, from $0.795 to $1.045. Meanwhile, its modest payout ratio of 69% suggests there's still room for more dividend increases ahead.

Whether you're looking for dividend income or stability, Duke Energy can make for a fantastic investment to consider for your portfolio today.

Kimberly-Clark

Investing in businesses which sell essential day-to-day products can also enable you to find a strong long-term stocks to hang on to. Kimberly-Clark owns many top and recognizable consumer brands such as Huggies, Kleenex, Scott, and many others.

The company's sales have hovered around $20 billion in each of the past three years. And its profit margins are typically around 10% or better. The dependency consumers have on its trusted brands should enable it to generate at least modest growth in the long run, particularly as the population grows.

Kimberly-Clark is a special income stock as it has raised its dividend payments annually for 53 consecutive years, making it a Dividend King. While that doesn't mean that it will continue increasing its dividend in the future, it does indicate a commitment to growing its payout. And with its payout ratio at around 67%, there's no reason to suspect the company won't be able to raise its dividend in the coming years.

With an already high yield of 3.9%, Kimberly-Clark is another low-volatility stock that you can feel comfortable putting in your portfolio for the long term.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Duke Energy and Verizon Communications. The Motley Fool has a disclosure policy.