Let’s face it: the golden years don’t feel so golden when inflation’s slapping your savings harder than a toddler in a tantrum phase. CDs are still paying barely more than your grandma’s cookie jar, and bonds? Let’s just say the “safe” part of the portfolio is looking a lot like dead weight with a necktie.
So what’s a forward-thinking, dividend-chasing, income-seeking retiree (or future retiree) supposed to do?
Simple: you tap into some big, beautiful, cash-generating machines that actually pay you for owning them. Not 1%. Not 3%. We’re talking 7% to 9%+ dividend yields—because passive income should mean more cruises, less budgeting ramen noodles.
Today, we’re serving up two juicy picks: Energy Transfer LP (ET) and Starwood Property Trust (STWD). These aren’t just some fly-by-night meme stocks pumped by a Reddit post and a prayer. These are serious, strategic, and stable companies that have been quietly showering investors with cash like a drunk uncle at a wedding.
Ready to retire rich, or at least comfortably middle-class? Let’s dive into these high-octane dividend dynamos.
Why Dividend Income Is the Unsung Hero of Retirement
Before we get into the tickers, let’s acknowledge the obvious: retirement isn’t cheap. Healthcare, travel, grandkids, Amazon Prime subscriptions—it all adds up. And relying on Social Security alone? That’s like bringing a garden hose to a house fire.
Enter the glorious world of high-yield dividend stocks, where your money isn’t just sitting around looking pretty—it’s working overtime to make you richer.
Now, a 9% yield doesn’t magically mean you’re a genius investor. You still need:
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Solid fundamentals
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Reasonable valuations
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Payouts that aren’t about to implode
Which brings us to our two picks—companies that print cash, pay handsomely, and most importantly, aren’t dumpster fires.
💸 Cash Cow #1: Energy Transfer LP (ET) — The Pipeline Prince That Pays You Handsomely
Sector: Energy Midstream
Current Yield: ~6.9%
Valuation: Cheap enough to make Warren Buffett raise an eyebrow
Ticker Translation: “Every Time” your account gets paid
Let’s talk about Energy Transfer (ET)—a company that’s quietly taken over the plumbing of America’s energy system while throwing off mountains of cash like it's going out of style.
Midstream companies like ET aren’t out wildcatting for oil or gambling on exploration. Nope, they own the infrastructure—pipelines, storage, processing—and they charge tolls, baby. Whether prices go up, down, or sideways, ET still gets paid. It’s basically the landlord of the energy world, and we all know how that gig pays.
🔧 Strategic Empire Building
ET has been on an acquisition tear, scooping up companies like your dad at a Home Depot sale. The latest blockbuster was WTG Midstream, which added major horsepower to its already beastly network in the Permian Basin.
Here’s what you need to know:
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$15.5 billion in EBITDA in 2024 (yes, billion with a B)
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$8.4 billion in distributable cash flow—aka “dividend fuel”
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Coverage ratio of 1.6x—meaning the dividend isn’t just covered, it’s practically wearing body armor
🌎 Global Growth & The Data Center Gold Rush
But wait, there’s more! ET isn’t just resting on its oily laurels. It’s diving headfirst into global LNG (liquefied natural gas) demand, which is set to boom thanks to the world’s addiction to power—and not just for Netflix binges.
They even inked a 20-year deal with Chevron to ship LNG from its Lake Charles facility. Long-term contracts + rising demand = deliciously dependable cash flow.
And let’s not forget the data center explosion. Artificial intelligence needs servers. Servers need electricity. Electricity needs gas. ET is locking in deals with cloud companies to provide the juice. AI may be stealing jobs, but it’s helping your dividend portfolio.
🧾 Numbers That Make Grown Investors Weep With Joy
Let’s do some quick math:
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Yield: ~6.9%
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DCF growth estimate: 5–7%
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Price-to-cash flow: 5.65x (compare that to 9x+ for peers like EPD and MPLX)
Translation? You’re getting a cash flow machine at a clearance rack price.
📈 The Rating Agencies Even Like It (Shocking, We Know)
ET’s got a BBB credit rating and recently got upgrades from all three major agencies. Their net debt-to-EBITDA ratio is 4.2x—below the 4.5x danger zone.
Even Seeking Alpha’s notoriously cranky quant system rates it a “Strong Buy.” And that system has ghosted hotter stocks than your last Tinder date.
🏢 Cash Cow #2: Starwood Property Trust (STWD) — The Mortgage Mogul of Monthly Money
Sector: Commercial Mortgage REIT
Current Yield: 9.6%
Tagline: “We’ve paid the same dividend since 2009 and never cut it. Come at us, recessions.”
If ET is the industrial backbone of your income portfolio, Starwood Property Trust (STWD) is the high-class financier pouring champagne and collecting rent.
STWD is a REIT (Real Estate Investment Trust), but not one of those rickety mall REITs living off Auntie Anne’s pretzel fumes. This is a commercial mortgage REIT—they lend to commercial real estate projects, collect fat interest payments, and pass the loot to you.
They also own actual properties, dabble in infrastructure lending, and even hold residential loans. Think of it as a well-diversified real estate buffet with multiple income streams—and no mystery meat.
💪 Built to Last Through Any Market
STWD has:
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Paid a $0.48 dividend every quarter since 2014
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Never cut its dividend since launching in 2009
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Covered that payout with Distributable EPS every single time
That’s what you want in retirement income. Not drama. Not hope. Just steady, boring, beautiful cash.
🔍 Portfolio Breakdown: Not All Office, Thank You Very Much
Contrary to REIT doomsday narratives, STWD isn’t drowning in vacant office towers:
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54% Commercial Lending
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21% Residential & Infrastructure
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13% Physical Property
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Only 10% U.S. Office Exposure
That last point matters. Office real estate is like Blockbuster in 2010—still around, but mostly vibes. STWD’s limited exposure shows management knows where the winds are blowing.
💰 Liquidity & Leverage: The Boring Stuff That Keeps You Rich
Starwood has $1.8 billion in liquidity, and a low 2.1x debt-to-equity ratio—the lowest in four years. Compare that to Blackstone Mortgage Trust (BXMT) at 3.5x, and you see why STWD’s balance sheet is built for survival.
REO (real estate owned) impairments? Just 4.6% of the portfolio, meaning 95.4% is performing. Translation: most of the loans are paying up, not ghosting like flaky tenants.
🤝 The Case for Buying Now
Okay, so both ET and STWD pay 7–9%+ yields. But what makes now the time to load up?
Because they’re still cheap—and income compounds faster when you’re buying more of it.
Reinvesting dividends into undervalued, high-yielding stocks is the financial version of turning your money into a clone army. Each dollar buys more dividend-paying shares. Each reinvested dividend boosts your base. Rinse, repeat, get rich.
And for retirees? That means replacing a paycheck faster, and with less volatility than chasing growth stocks that swing more than a jungle gym.
📊 Quick Comparison Chart: ET vs. STWD
🧠 Final Thoughts: Buy These Dividend Beasts Before They’re Cool
We live in a world where Apple pays a 0.5% dividend and people still line up to buy it.
Meanwhile, you’ve got Energy Transfer quietly compounding 6.9% payouts with growth potential, and Starwood Property Trust slinging nearly 10% yield backed by a fortress balance sheet—and barely anyone’s talking about it.
So here’s the play:
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Buy them while they’re undervalued
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Reinvest dividends to snowball income
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Sleep soundly knowing your cashflow isn’t based on stock hype or broken tech dreams
Because retirement should be about peace of mind—not watching your portfolio bleed out while sipping lukewarm tap water in a Motel 6.
💬 Your Turn: Are You Riding These Cash Cows?
Got a favorite high-yield stock I missed? Think STWD is too risky or ET is too oily? Drop a comment and let's talk dividends. No spam, no crypto shills—just real talk and passive income dreams.
And if you’re the type who likes exclusive portfolios and nerd-level breakdowns? Check out platforms like iREIT® + Hoya Capital—they’ve got the goods.
Until next time, stay rich in dividends, not in stress.