Investing in ultra-high-yield dividend stocks can be an excellent way to generate passive income while building long-term wealth. While some high-yield stocks carry significant risks, others provide stable and sustainable dividends that can serve as a cornerstone for an income-focused portfolio.
In this article, we will explore three ultra-high-yield dividend stocks that have the potential to generate strong returns over the next decade. These companies have robust business models, solid cash flows, and sustainable dividend policies, making them ideal candidates for long-term investment.
Why Ultra-High-Yield Dividend Stocks?
Ultra-high-yield dividend stocks—those yielding above 6%—attract income investors looking for strong cash flow. However, not all high-yield stocks are safe investments. Some companies offer high dividends due to declining businesses, unsustainable payout ratios, or external economic pressures.
To find the best ultra-high-yield dividend stocks, we focus on companies with:
- Stable and growing cash flows
- Sustainable payout ratios
- Strong competitive advantages
- Reliable business models
With these factors in mind, here are three of the best ultra-high-yield dividend stocks to buy and hold for the next decade.
1. Enterprise Products Partners (EPD) - 7.5% Yield
Sector: Energy - Midstream
Market Cap: ~$60 billion
Dividend Yield: ~7.5%
Payout Ratio: ~60% (based on distributable cash flow)
Why Invest in Enterprise Products Partners?
Enterprise Products Partners (NYSE: EPD) is one of the largest midstream energy companies in the U.S. The company operates a massive pipeline and storage network, transporting and processing natural gas, crude oil, and petrochemicals.
Key Strengths
✅ Stable, Fee-Based Revenue: Unlike oil producers, EPD does not rely on commodity prices for profits. Instead, it earns money through long-term contracts and stable fee-based revenue streams.
✅ Strong Dividend Track Record: EPD has increased its distribution for 25 consecutive years, making it one of the most reliable income stocks in the energy sector.
✅ Low Debt and Sustainable Payout: Unlike many energy companies, EPD maintains a conservative balance sheet with a reasonable debt load, ensuring its 7.5% dividend yield is sustainable.
Long-Term Outlook
As demand for natural gas and petrochemicals continues to rise, EPD is well-positioned to benefit. The company also invests in growth projects that ensure steady cash flow expansion.
With a secure, high-yield dividend and strong business fundamentals, EPD is an excellent long-term hold for income investors.
2. Realty Income (O) - 6.0% Yield
Sector: Real Estate Investment Trust (REIT)
Market Cap: ~$45 billion
Dividend Yield: ~6.0%
Payout Ratio: ~75% (Adjusted FFO)
Why Invest in Realty Income?
Realty Income (NYSE: O) is a top-tier REIT that specializes in single-tenant commercial properties. The company owns over 13,000 properties, leased to high-quality tenants like Walmart, CVS, and Home Depot.
Key Strengths
✅ Reliable Monthly Dividends: Realty Income is known as the "Monthly Dividend Company", paying investors a stable monthly dividend for decades.
✅ Diverse and Defensive Portfolio: The company has long-term leases with strong tenants in essential industries, ensuring stable rental income.
✅ Strong Dividend Growth: Realty Income has increased its dividend for 29 consecutive years, demonstrating its commitment to shareholders.
Long-Term Outlook
Despite concerns about retail real estate, Realty Income's focus on essential businesses (grocery stores, pharmacies, convenience stores) makes it resilient to economic downturns. The company also expands internationally, increasing long-term growth potential.
With its 6% dividend yield, low-risk business model, and consistent dividend growth, Realty Income is one of the best REITs for long-term income investors.
3. Altria Group (MO) - 9.1% Yield
Sector: Consumer Staples - Tobacco
Market Cap: ~$75 billion
Dividend Yield: ~9.1%
Payout Ratio: ~75% (Adjusted EPS)
Why Invest in Altria Group?
Altria Group (NYSE: MO) is a dominant player in the U.S. tobacco market, owning the iconic Marlboro brand. The company also invests in alternative nicotine products, such as e-cigarettes and smokeless tobacco, to drive future growth.
Key Strengths
✅ Massive Cash Flow Generation: Despite declining cigarette volumes, Altria generates huge profits due to pricing power and cost efficiency.
✅ High and Reliable Dividend: Altria has paid dividends for over 50 years and continues to raise its payout annually.
✅ Diversification into Next-Generation Products: Altria invests in smokeless tobacco, e-cigarettes, and cannabis, positioning itself for long-term growth.
Long-Term Outlook
While cigarette smoking declines, Altria's pricing strategy and alternative nicotine products help sustain profits. The company also benefits from stable demand, as tobacco remains an addictive product with high brand loyalty.
With a massive 9.1% dividend yield, resilient cash flows, and long-term growth initiatives, Altria is a great choice for income investors.
Final Thoughts: Which Ultra-High-Yield Stock Is Best?
All three of these ultra-high-yield dividend stocks offer compelling reasons to buy and hold for the next decade:
Which One Should You Buy?
- For long-term stability and low risk, EPD is the best choice.
- For monthly income and REIT exposure, Realty Income is ideal.
- For maximum dividend yield and strong cash flow, Altria is the top pick.
Final Advice
When investing in ultra-high-yield stocks, always consider dividend sustainability, business fundamentals, and future growth prospects. These three companies offer compelling dividend yields with strong long-term potential, making them excellent additions to any income-focused portfolio.
Do your own research and consult a financial advisor before making investment decisions.