The dividend yield on the S&P 500 is near its all-time low at around 1.1% these days. Rising stock prices and a reduced focus on paying dividends by many companies are two factors driving the market's paltry yield. However, there are some outliers in today's low-yielding environment. Here are three monster dividend stocks with yields of up to 12.5%. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the ...

Core Viewpoint - Enterprise Products Partners (EPD) is a strong income-generating investment with a current yield of 6.3%, significantly higher than the S&P 500's yield of 1.1% [1] Financial Performance - The company has increased its distribution for 27 consecutive years, indicating a strong commitment to returning value to investors [1] - The most recent quarterly distribution payment was set at $0.55 per unit, reflecting a 2.8% increase year-over-year [4] - In 2025, Enterprise Products Partners generated $7.9 billion in operational distributable cash flow, covering its distribution by 1.7 times and allowing for $3.2 billion in retained cash for reinvestment [7] Investment Requirements - To generate $1,000 in annual passive income, an investment of approximately $15,900 is needed at the current unit price of around $35, compared to over $87,700 required for an S&P 500 index fund [5] Growth Initiatives - The company invested $5 billion in expansion initiatives last year, including $4.4 billion on growth capital projects and $632 million on acquisitions, supported by a strong balance sheet [8] - Enterprise Products Partners plans to invest between $2.5 billion and $2.9 billion in growth capital projects this year and between $2 billion and $2.5 billion in 2027, which is expected to enhance free cash flow [9] Financial Stability - The company maintains a low leverage ratio of 3.3 times, contributing to its top-tier credit rating of A-, making it the only pipeline company with such a rating [8] - The strong financial profile allows the company to continue increasing its distribution and repurchasing common units, further strengthening its balance sheet [10]

Core Viewpoint - The article highlights three under-the-radar dividend stocks that offer attractive yields, significantly higher than the S&P 500's current yield of approximately 1.1% [1]. Group 1: Ares Capital - Ares Capital (ARCC) has a dividend yield of 9.5% and operates as a business development company (BDC), required to pay out at least 90% of its taxable income as dividends [2]. - The company has maintained stable-to-increasing dividends for 16 years, despite challenges faced by many BDCs [2]. - Ares Capital focuses on providing capital to middle-market companies with annual revenues between $100 million and $1 billion, generating income through direct loans and equity investments [3]. Group 2: Starwood Property Trust - Starwood Property Trust (STWD) leads with a dividend yield of 10.7% and has never cut its dividend since its IPO in 2009 [6]. - The REIT has maintained its dividend payout rate for over a decade, despite challenges faced by other REITs [6]. - Starwood has diversified its investments from commercial mortgages to high-quality real estate assets and infrastructure lending, which has reduced risk and provided new growth opportunities [9]. - The recent $2.2 billion acquisition of Fundamental Income Properties added 467 properties with long-term leases, enhancing its rental income stability [10]. Group 3: Western Midstream Partners - Western Midstream Partners (WES) offers a distribution yield of 9% and operates as a master limited partnership (MLP) [11]. - The MLP reset its distribution level in 2020 due to the pandemic but has since rebuilt its payout to above pre-pandemic levels [11]. - The company owns energy midstream assets that generate stable cash flow, which is used for distributions and growth investments [13]. - Western Midstream aims to increase its high-yielding payout at a low-to-mid single-digit annual rate and has recently closed a $2 billion acquisition of Aris Water Solutions [14].

Core Insights - Master limited partnerships (MLPs) provide significant yields, with Enterprise Products Partners yielding 6.7% and Energy Transfer yielding 7.4%, compared to the S&P 500's 1.1% dividend yield [1] Group 1: MLPs Overview - MLPs offer advantages such as high passive income but require investors to deal with Schedule K-1 tax forms, complicating tax filings [2] - The Alerian MLP ETF tracks the Alerian MLP Infrastructure Index, providing diversification across energy midstream sector MLPs and has an 8% distribution yield based on the last 12 months [4] Group 2: Alerian MLP ETF Details - The Alerian MLP ETF charges an expense ratio of 0.85%, which is higher than many oil stock ETFs, but offers tax simplicity by processing K-1s and providing a single Form 1099 to shareholders [5] - The fund's asset allocation includes 29.4% in petroleum pipeline transportation, 24.3% in natural gas pipeline transportation, and 21.1% in gas gathering and processing [7] Group 3: Top Holdings and Performance - The ETF has significant exposure to Energy Transfer, which constitutes 12.5% of its assets, and generates about 90% of its earnings from fee-based sources, ensuring stable cash flow for high-yield distributions [8]

Core Viewpoint - Energy Transfer is positioned as a leading energy midstream company with a strong cash flow and growth potential, making it an attractive investment opportunity [1]. Group 1: Financial Performance - Energy Transfer generates substantial cash flow, with nearly $6.2 billion of distributable cash flow in the first nine months of the previous year, allowing for a distribution payout of almost $3.4 billion to investors [3]. - The company maintains a strong balance sheet with a leverage ratio within the target range of 4.0-4.5 times, marking its strongest financial position in history [4]. Group 2: Growth Prospects - The company plans to invest between $5 billion and $5.5 billion in growth capital projects this year, an increase from $4.6 billion last year, supporting various capital projects including the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion [5][6]. - Energy Transfer is actively pursuing additional growth opportunities to meet rising energy demand, particularly for natural gas supply to power plants and AI data centers [6]. Group 3: Distribution and Demand - The high-yielding distribution is supported by a sustainable foundation, with the potential for healthy annual growth in earnings and distribution [7]. - Increased demand for gas is enhancing the value of existing assets, allowing Energy Transfer to negotiate new gas transportation contracts at higher rates as older agreements expire, contributing to revenue growth [8].

Core Viewpoint - Western Midstream is positioned as an attractive passive income investment due to its stable cash flows and high dividend yield supported by long-term contracts with major energy companies [1][10]. Group 1: Financial Performance and Structure - Western Midstream operates essential energy midstream assets that generate stable cash flow, supporting an 8.8% cash distribution yield [1]. - The company has a market capitalization of $17 billion, with a gross margin of 53.34% and a dividend yield of 8.86% [6]. - The restructured contracts with Occidental Petroleum will not impact Western Midstream's free cash flow, as the company expects to offset reduced near-term cash flows with distribution savings and cost-saving initiatives [6][7]. Group 2: Contractual Agreements - Western Midstream has renegotiated natural gas gathering and processing contracts with Occidental Petroleum, transitioning to a simplified fixed-fee structure that reduces Occidental's near-term costs and enhances production growth [3]. - Occidental will transfer 15.3 million common units of Western Midstream, valued at $610 million, resulting in a decrease of Occidental's interest in the MLP from 42% to 40% [3]. - A new gas-gathering and processing agreement with ConocoPhillips will further diversify revenue, reducing related party revenue from Occidental by over 10% [4]. Group 3: Growth Prospects - The company anticipates maintaining a net leverage ratio near 3.0 times, even after a recent acquisition and planned capital spending of $1.1 billion in 2026, indicating a conservative financial strategy [7]. - Western Midstream's growth capital spending plan includes projects like the North Loving II gas processing plant and Pathfinder Pipeline, which are expected to fuel cash flow growth in the coming years [9]. - The MLP aims to deliver low-to-mid single-digit annual distribution growth, supported by predictable cash flows from long-term contracts [9].

Core Viewpoint - MPLX offers a high distribution yield of 7.7%, significantly higher than the S&P 500's 1.1% dividend yield, making it an attractive option for generating passive income [1][3]. Financial Performance - MPLX currently pays a quarterly distribution of $1.0765 per unit, which annualizes to $4.31, reflecting a 12.5% increase from previous levels [3]. - To generate $1,000 of annual distribution income, an investor would need to own 232 units, costing approximately $13,000 at the current price of about $56 per unit [3][4]. - In contrast, an investment in an S&P 500 index fund would require nearly $88,500 to achieve the same annual income [4]. Stability and Growth Potential - MPLX's midstream operations provide stable cash flow supported by long-term contracts and regulated rate structures, with a cash coverage ratio of 1.3 times for its current distribution payments [5]. - The company's leverage ratio stands at 3.7 times, below the 4.0 times threshold that its cash flows can support, indicating a conservative financial profile [5]. - MPLX has a significant backlog of organic capital projects expected to come online through 2029, which should facilitate continued distribution growth [6]. - The company has consistently raised its distribution since its formation in 2012, with an 11.6% compound annual growth rate since 2022 [6]. Investment Consideration - MPLX's high current yield is backed by stable cash flows and a solid financial profile, positioning it well for future distribution growth [8].

分组1 - High-yield energy midstream partnerships have faced a challenging year, with key ETFs in this sector yielding mid-single-digit total returns since mid-January 2025, contrasting with a strong rally in global equities since April [1] - The S&P 500 ETF has significantly outperformed these midstream partnerships during the same period, indicating a divergence in performance between these asset classes [1] 分组2 - The article emphasizes the importance of analyzing stock market sectors, ETFs, and economic data to identify potential investment opportunities and risks [1]

Core Insights - Dividend growers are considered some of the best long-term investments due to their ability to provide a lucrative and growing income stream alongside rising share prices, historically outperforming non-dividend payers and companies that do not increase dividends significantly [1] Company Summaries - **Brookfield Asset Management**: - A leading alternative investment manager with over $1 trillion in assets under management (AUM) and a current dividend yield of 3.3%, which is approximately three times the S&P 500's level [4] - The company has demonstrated strong dividend growth, increasing its payout by 19% in early 2024 and by another 15% the following year, with expectations of around 20% annual earnings growth over the next five years [5][6] - Brookfield is capitalizing on trends such as the shift towards alternative investments and AI infrastructure, supporting continued dividend growth of over 15% annually [6][8] - **MPLX**: - A master limited partnership (MLP) focused on energy midstream assets, currently yielding 8.1% [7] - MPLX has consistently raised its distribution by 10% or more for four consecutive years, with stable cash flow supported by long-term contracts and a conservative leverage ratio of 3.7 times [8] - The company generates enough cash to cover its payout comfortably by 1.3 times, providing flexibility for acquisitions and organic expansion projects [9] - **Prologis**: - Has delivered a compound annual dividend growth of 13% over the past five years, making it another strong candidate for dividend growth investment [8]

分组1: Energy Transfer - Energy Transfer distributes around half of its stable cash flow to investors while retaining the rest for expansion projects, positioning itself in the strongest financial state in its history [1] - The company has a multi-billion-dollar backlog of expansion projects expected to enter commercial service by the end of the decade, supporting an anticipated annual distribution increase of 3% to 5% [1][2] 分组2: Ares Capital - Ares Capital, a business development company (BDC), must distribute 90% of its income to investors via dividends and has maintained a stable to increasing quarterly dividend for 16 years [3] - The company primarily makes senior secured loans to private middle market companies, with 71% of its portfolio in less cyclical industries, and has invested $28.7 billion across 587 portfolio companies [4] 分组3: Starwood Capital - Starwood Capital, a real estate investment trust (REIT), has diversified its investments to maintain its dividend for over a decade, despite real estate market fluctuations [5][6] - The REIT recently acquired a $2.2 billion net lease platform, which includes 467 properties with a 17-year weighted average lease term and 2.2% annual rent escalations, expected to provide durable income [6] 分组4: UPS - UPS has faced challenges leading to a share price decline of over 50% from its peak, resulting in a high dividend yield [7] - The company has not generated enough cash to cover its dividend this year but is targeting $3.5 billion in cost savings and expects to maintain its dividend commitment, which has been upheld since going public in 1999 [8] 分组5: Verizon - Verizon generates substantial recurring revenue and cash flow, allowing it to cover capital expenditures and dividend payments comfortably [9][10] - The company has heavily invested in expanding its 5G and fiber networks, which is expected to enhance revenue and free cash flow, supporting continued dividend increases [10] 分组6: Dividend-Paying Stocks - Ares Capital, Energy Transfer, Starwood Capital, UPS, and Verizon are noted for their lucrative dividends and solid records of stable or growing dividends, making them attractive for passive income generation [11]