Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.
The recent sell-off was the worst downturn for the market since 2020.
While the financial press points to tariffs and recession, the reality is the total return of the S&P 500 for the past five years is up 117%.
An average annual year total return for the S&P 500 is 10%, when adjusted for inflation 6% to 7%.
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Dividend stocks are similar to bonds that pay interest income. As the price increases, since the dividend or interest rate is fixed, the yield decreases. For investors who have witnessed the massive selling since the implementation of the tariffs and the surrounding hysteria, those who have adhered to our advice since the beginning of 2025 and focused on moving some assets to cash are now poised to reap the benefits. When dividend stocks decline in price, their dividend yield increases, and some top companies look very enticing now. While nobody can be 100% sure when the selling will pause, starting to put your toe in the water now may be an excellent idea for growth and income investors.
We screened our 24/7 Wall St. high-yield dividend stock database, seeking large and mega-cap dividend stocks that have been beaten down following the recent selling. We identified five well-known stocks that now yield over 7% and as high as 9+%. All these top companies will remain attractive long after the tariff selling and profit-taking are over.
Dividend stocks offer investors a reliable source of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
This British multinational company manufactures and sells cigarettes and other tobacco and nicotine products. European giant British American Tobacco PLC (NYSE: BTI) is a consumer-centric, multi-category consumer goods company that pays shareholders a hefty 7.52% dividend.
The company provides tobacco and nicotine products. Its segments include:
The company’s product categories include:
Vapor products are handheld, battery-powered devices that heat a liquid (called an e-liquid) to produce an inhalable aerosol known as vapor. THPs are a new category of tobacco product designed to heat rather than burn tobacco.
Modern Oral products are smoke-free oral nicotine products, also known as nicotine pouches, designed for use in the mouth. Traditional oral products include snus and snuff.
British American Tobacco brands include:
Energy Transfer L.P. (NYSE: ET) is one of North America’s largest and most diversified midstream energy companies. This top master limited partnership is a safe option for investors seeking energy exposure and a huge 8.04% dividend. It owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.
The company is a publicly traded limited partnership with core operations that include:
Following the acquisition of Enable Partners in December 2021, Energy Transfer owns and operates over 114,000 miles of pipelines and related assets in 41 states, spanning all major U.S. producing regions and markets. This further solidifies its leadership position in the midstream sector.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, the general partner interests, the incentive distribution rights, and 28.5 million standard units of Sunoco, and the public partner interests and 39.7 million standard units of USA Compression Partners.
Franklin Resources Inc. (NYSE: BEN), more commonly known as Franklin Templeton, is one of the world’s largest investment management firms and among the most prominent global money managers. This company is a mutual fund powerhouse that pays a safe and secure 7.31% dividend. The firm markets mutual funds and institutional separate accounts under the Franklin, Templeton, and Mutual Series brands. At times, 50% of its sales are from outside the United States, an advantage given the maturing U.S. market.
Franklin Resources offers its products and services under these brands:
The 2023-2024 bull market was a strong tailwind for the company; however, the recent sell-off has made the shares appear incredibly cheap. While withdrawals from baby boomers may be a concern, the path forward in 2025 also looks solid.
LyondellBasell Industries N.V. (NYSE: LYB) is a global leader in developing and supplying materials that enable packaging, health, and transportation solutions. This blue-chip chemical giant offers a dependable and substantial 9.24% dividend and operates as a chemical company in:
The company operates in six segments:
It produces and markets olefins and co-products, including polyethylene and polypropylene, propylene oxide and its derivatives, oxyfuels and related products, as well as intermediate chemicals such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol.
In addition, the company produces and markets compounding and solutions, including:
Furthermore, it develops and licenses chemical and polyolefin process technologies, manufactures and sells polyolefin catalysts, and serves applications in food packaging, home furnishings, automotive components, and paints and coatings.
Established in 1849 in New York by two German entrepreneurs, this top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has been crushed over the past two years as many people are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It pays a rich 7.49% dividend, which has risen yearly for the past 15 years.
The company offers medicines and vaccines in various therapeutic areas, including:
Pfizer also provides medicines and vaccines in various therapeutic areas, such as:
Wall Street anticipates full-year 2025 revenues in the range of $61.0 to $64.0 billion. This includes the expectation that revenues from COVID-19 products in 2025 will be broadly consistent with 2024 after excluding approximately $1.2 billion of non-recurring revenue for Paxlovid in 2024.
Three Stocks Trading Under $10 That Deliver Ultra-High-Yield Dividends
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