Investing $125,000 in These 4 High-Yield Dividend Stocks Could Add $10,000 in Passive Income to Your Portfolio in 2024

A closer look at four companies with attractive dividend yields and the potential to generate significant passive income.

Seeking out high-growth businesses that can generate market-beating returns can be exciting, but investing in steady, slower-growth businesses can be a more prudent option. By splitting a total investment of $125,000 into four high dividend yield companies, investors may be able to add as much as $10,000 of dividend income to their portfolio this year. Let’s explore the pros and cons of each company and assess why 2024 could be a great opportunity to open positions.

Rithm Capital: 9.7% dividend yield

Rithm Capital, a real estate investment trust (REIT), offers a 9.7% dividend yield. REITs generally have high dividend yields because they are required to distribute a significant portion of their annual taxable income to shareholders. With a $125,000 investment, one-fourth of the total, or roughly $31,250, could generate approximately $3,000 of dividend income. Rithm Capital has found overlooked opportunities in commercial real estate, mortgage loans, and rentals, thanks to traditional banks’ more stringent lending standards. Despite concerns about interest rate policies set by the Federal Reserve, long-term investors in Rithm Capital have enjoyed a total return of over 140% in the past decade.

Altria: 9.5% dividend yield

Altria, a tobacco giant, offers a 9.5% dividend yield. While demand for traditional tobacco products has been declining, Altria has diversified its product offerings, making inroads in the smokeless tobacco and vaping markets. The company’s depressed share price, combined with its esteemed position among the Dividend Kings (companies that have raised their dividends for 50 consecutive years or more), makes it an attractive investment option. With a $125,000 investment, one-fourth of the total, or roughly $31,250, could generate over $2,900 of dividend income.

Verizon Communications: 6.8% dividend yield

Telecommunications provider Verizon Communications offers a 6.8% dividend yield. Despite a challenging competitive landscape and a 3% decline in stock value over the past year, Verizon generates robust free cash flow, allowing it to consistently reward shareholders. The company raised its dividend for the 17th consecutive year in September. At a 6.8% yield, one-fourth of the $125,000 investment, or approximately $31,250, could bring in more than $2,100 of dividend income.

AT&T: 6.4% dividend yield

AT&T, a competitor of Verizon, offers a 6.4% dividend yield. The company has been increasing its revenue and improving its net debt position, making the dividend relatively safe. Despite cutting its dividend by roughly half in 2022, AT&T’s stock price presents a buying opportunity. With a 6.4% yield, the final one-fourth of the $125,000 investment, or approximately $31,250, could produce $2,000 of dividend income, bringing the total passive income to $10,000.

Conclusion: Investing in high-yield dividend stocks can provide investors with a steady stream of passive income. By allocating a total investment of $125,000 into Rithm Capital, Altria, Verizon Communications, and AT&T, investors have the potential to add $10,000 of dividend income to their portfolio in 2024. These companies offer attractive dividend yields and have the potential for long-term growth. While growth stocks may carry more volatility, these slower-growth businesses provide stability and the opportunity to earn market-beating returns through dividends.