The stock market has experienced a significant decline this year as concerns about tariffs potentially leading to a recession have arisen. However, a favorable outcome of this downturn is that decreased stock prices have led to an increase in dividend yields. This situation offers investors an opportunity to secure dividend yields of 5% or more from some high-quality companies, providing them with stable passive income streams even in the event of an economic downturn.
Here are five dividend stocks considered to be safe investments for those seeking resilient dividend income:
Dominion Energy
Dominion Energy, trading under the ticker symbol (D), is currently offering a dividend yield of 5.1%. This utility company, which provides electricity and natural gas in Virginia and the Carolinas, generates consistent cash flow. The stability in demand for energy and government-regulated pricing contribute to this steady cash flow. Dominion is making significant investments, approximating $50 billion through 2029, to meet future energy demands driven by AI data centers and onshoring of manufacturing. This includes the development of a wind farm off Virginia’s coast. These investments are anticipated to grow earnings per share by 5% to 7% annually, supporting the company’s high dividend yield in the short term and fueling long-term growth.
NNN REIT
NNN REIT, known by its ticker (NNN), offers a dividend yield of 5.8%. This real estate investment trust holds a portfolio of single-tenant net lease retail properties, generating stable income as tenants handle all operating costs. NNN REIT distributes less than 70% of its cash flow as dividends, allowing it to invest about $200 million annually in acquiring additional income-generating properties. Its conservative balance sheet facilitates further property acquisitions. The steady growth in its portfolio has enabled NNN REIT to increase its dividend for 35 consecutive years.
Brookfield Infrastructure
Brookfield Infrastructure, listed as (BIPC) and (BIP), has a dividend yield of about 5%. This global infrastructure operator relies on stable cash flow, with 85% of its funds from operations (FFO) supported by government-regulated rates or long-term contracts. Brookfield pays out 60% to 70% of its cash flow as dividends. Recently, the company acquired a leading U.S. pipeline system and is investing significantly in data infrastructure, including semiconductor fabrication facilities. These initiatives aim to boost FFO per share by over 10% annually, supporting dividend growth of 5% to 9% per year.
Verizon
Verizon, with the ticker (VZ), currently offers a dividend yield of 6.2%. The telecom giant’s steady cash flow stems from consumer and business payments for wireless and broadband services. Last year, Verizon reinvested its $36.9 billion in cash flow into infrastructure expansion and dividends, while still having excess free cash of $8.6 billion. The company is leveraging its strong balance sheet to acquire Frontier Communications for $20 billion in cash, enhancing its fiber network. Verizon’s investments in fiber and 5G aim to grow cash flow, furthering its 18-year dividend growth streak.
Oneok
Oneok, trading under (OKE), presents a 5% dividend yield. This pipeline company supports its stable payout with government-regulated rates and long-term contracts for its energy infrastructure assets. Oneok has diversified its portfolio through strategic acquisitions and significant investments in organic capital projects, scheduled to become operational through 2028. These efforts position Oneok to achieve dividend growth of 3% to 4% annually, maintain balance sheet strength, and potentially buy back shares, continuing its long-standing trend of dividend stability and growth.
The recent downturn in the stock market has resulted in higher dividend yields, with many high-quality companies now offering yields of 5% or higher. This scenario presents investors with an opportunity to secure reliable income streams that are expected to remain stable over time.
