In this article, we will take a look at some of the best dividend stocks with yields above 7%.
Investors focused on dividends should be cautious about simply selecting stocks with the highest yields, as this approach can be risky. An unusually high yield often signals potential trouble, since dividend yields rise when stock prices fall. In many cases, an exceptionally high yield may be the result of a stock experiencing a significant decline in value. When a company’s share price drops sharply, it raises concerns about whether its dividend payments can be maintained at their current levels.
Dan Lefkovitz, a strategist for Morningstar Indexes, made the following comment about extremely high yields in the firm’s recent report:
“It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield. Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to screen for dividend durability and reliability going forward.”
However, this has not always been the case. Many companies have maintained strong dividend yields along with consistent dividend growth histories. In addition, high yields are not inherently negative. In fact, dividend yield is a key factor in dividend investing, as it indicates the income an investor can expect relative to the stock’s price.
To fully capitalize on high-yield stocks, investors should also evaluate other metrics such as cash flow, payout ratio, and dividend growth. When these fundamentals are strong, high-yield stocks can remain attractive. Some studies highlight the long-term benefits of high-yield stocks, suggesting that as dividend yields rise, overall returns tend to increase while risk declines. Research from Hartford Funds, which considered annualized standard deviation as a measure of return volatility, found that between December 1969 and March 2024, high-dividend portfolios achieved an annualized return of 12.3%, compared to 10.5% for mid-dividend portfolios and 9.7% for low-dividend portfolios. The respective annualized standard deviations were 14.1%, 16%, and 20.8%, indicating that higher-yield portfolios experienced lower historical risk.
Also read: 10 Best Foreign Stocks With Dividends For Passive Income
In addition, a company’s dividend payout ratio serves as an important indicator of its capacity to manage its dividend policy. Firms that only just cover their dividends or allocate most of their earnings to dividends could face risks due to competitive pressures, as their cash flow might not be sufficient to meet operational needs. Companies with high payout ratios may experience slower growth in the future, which could affect both their stock price appreciation and their ability to increase dividends. A study by Nuveen, covering the period from December 2003 to December 2023, found that companies with the highest payout ratios have not been the strongest long-term performers. In contrast, companies with medium to medium-high payout ratios tended to perform better over time. This suggests that companies with strong balance sheets and solid fundamentals make for more promising dividend investments in a portfolio. In view of this, let’s discuss some of the best dividend stocks with yields above 7% according to analysts.
Our Methodology:
For this list, we screened for dividend stocks with yields higher than 7% as of February 5. From this group, we further refined our selection criteria by identifying stocks with a projected upside potential of over 6% based on analyst price targets, as of February 5. The stocks are ranked according to their upside potential. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Altria Group, Inc. (NYSE:MO)
Upside Potential as of February 5: 6.67%
Dividend Yield as of February 5: 7.76%
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that manufactures a wide range of related products including cigarettes and other nicotine products. The tobacco industry has undergone notable transformations in recent years. Although smoking rates have declined worldwide, a growing number of consumers are turning to smoke-free alternatives such as e-cigarettes and oral tobacco, which are seen as less harmful and have gained traction. Altria Group, the company behind well-known brands like Marlboro and Parliament, appears to be effectively adjusting to these changes by expanding its portfolio of smoke-free products. In the past 12 months, the stock has surged by over 30%.
In its Q4 2024 earnings report, Altria Group, Inc. (NYSE:MO) reported revenue of $5.11 billion, marking a 1.63% increase from the same quarter the previous year. This figure also surpassed analysts’ expectations by $59.6 million. Strong performance from its leading brands contributed to solid income growth and margin expansion in its core tobacco segment, while the company continued making strategic investments for long-term growth. Looking ahead to 2025, it expects adjusted diluted earnings per share (EPS) to range between $5.22 and $5.37, representing a 2% to 5% increase from the 2024 baseline of $5.12.
Altria Group, Inc. (NYSE:MO) has consistently prioritized shareholder returns. In fiscal year 2024, the company distributed $6.8 billion in dividends to investors. Moreover, it has maintained a strong track record of dividend growth for more than 55 years. The company offers a quarterly dividend of $1.02 per share and has a dividend yield of 7.76%, as of February 5.
At the end of Q3 2024, 32 hedge funds tracked by Insider Monkey were bullish on Altria Group, Inc. (NYSE:MO), compared with 36 in the previous quarter. The consolidated value of these stakes is over $2.27 billion. With over 22 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q3.
9. TELUS Corporation (NYSE:TU)
Upside Potential as of February 5: 7.26%
Dividend Yield as of February 5: 7.68%
TELUS Corporation (NYSE:TU) is a Canadian IT company that mainly offers television, data, and internet services to its consumers. The company has several initiatives aimed at benefiting its investors. It is enhancing its advanced connectivity solutions, including 5G and fiber optic networks, which play a key role in its long-term expansion. In addition, TELUS has launched new services like TELUS Smart Energy and TELUS Home View to appeal to a broader audience and adapt to evolving market needs.
In November 2024, TELUS Corporation (NYSE:TU) introduced its PureFibre Internet service in Ontario and Quebec, offering customers high-speed internet access. This service delivers download speeds of up to 1.5 Gbps and upload speeds of 1.0 Gbps. By integrating a fiber-to-the-home network with Wi-Fi 6 technology, PureFibre Internet ensures a fast and reliable connection with minimal lag.
In addition, TELUS Corporation (NYSE:TU) has maintained a strong customer-focused approach, which has contributed to significant subscriber growth. In the third quarter of 2024, the company recorded 347,000 total net customer additions. This included 130,000 new mobile phone subscribers and 159,000 net additions in connected devices, driven by advancements in 5G and IoT solutions.
TELUS Corporation (NYSE:TU) is a strong company from a dividend point of view. The company has been growing its payouts for 27 consecutive years, which makes it one of the best dividend stocks on our list. It also remained committed to its shareholder value, returning approximately $21 billion in dividends since 2004. Currently, it offers a quarterly dividend of C$0.4023 per share for a dividend yield of 7.68%.
As of the close of Q3 2024, 16 hedge funds in Insider Monkey’s database held stakes in TELUS Corporation (NYSE:TU), compared with 17 in the previous quarter. The collective value of these stakes is over $154.7 million. With over 3 million shares, Arrowstreet Capital was the company’s leading stakeholder in Q3.
8. Saratoga Investment Corp. (NYSE:SAR)
Upside Potential as of February 5: 8.8%
Dividend Yield as of February 5: 11.9%
Saratoga Investment Corp. (NYSE:SAR) is a New York-based capital market company that provides debt financing and equity capital to middle-market companies. In the past 12 months, the stock has surged by over 8.5%. The company recently reported early indications of a possible increase in mergers and acquisitions within the lower middle market. This trend was reflected in several repayments during the quarter, along with a notable rise in new originations. As in previous quarters, its strong market reputation and distinctive positioning, combined with ongoing efforts to strengthen relationships with sponsors, continue to create attractive investment opportunities from leading sponsors.
In fiscal Q3 2025, Saratoga Investment Corp. (NYSE:SAR) delivered strong results, reflected in key performance indicators. The company reported a quarterly return on equity (ROE) of 9.5%, while its trailing twelve-month ROE stood at 9.2%. In addition, net asset value (NAV) saw an increase of $2.8 million, rising from $372.1 million to $374.9 million. Although total investment income of $35.88 million marked a 1.27% decline from the previous year, it still exceeded analysts’ expectations by $977,920.
Saratoga Investment Corp. (NYSE:SAR) is one of the best dividend stocks on our list as the company has been growing its payouts for five consecutive years. The company offers a quarterly dividend of $0.74 per share and has a dividend yield of 11.9%, as of February 5.
Saratoga Investment Corp. (NYSE:SAR) was included in 3 hedge fund portfolios at the end of Q3 2024, the same as in the previous quarter, according to Insider Monkey’s database. The stakes held by these funds are worth over $6.5 million.
7. Delek Logistics Partners, LP (NYSE:DKL)
Upside Potential as of February 5: 8.9%
Dividend Yield as of February 5: 10.19%
Delek Logistics Partners, LP (NYSE:DKL) is a US-based midstream and logistics company specializing in the transportation and storage of crude oil, refined products, and other liquid hydrocarbons. The company maintains a stable earnings stream, with 36% of its EBITDA generated through long-term agreements with Delek, while the remaining 64% comes from third-party clients.
Delek Logistics Partners, LP (NYSE:DKL) generates enough cash flow to sustain its high-yield distributions. In Q3 2024, its coverage ratio was 1.1, falling slightly short of the 1.3 target due to the late timing of its H2O Midstream acquisition. Additionally, the company received distributions from its investment in the Wink-to-Webster pipeline after the quarter ended. Historically, its coverage ratio has remained above 1.3 on average over the past several years.
On January 24, Delek Logistics Partners, LP (NYSE:DKL) declared a 1% hike in its quarterly dividend to $1.105 per share. This marked the company’s 48th consecutive quarter of dividend growth, which makes DKL one of the best dividend stocks on our list. The company maintains solid cash flow and a stable balance sheet. By the end of the quarter, its leverage ratio stood at 4.15, a healthy level for a master limited partnership. The company generated $25 million in operating cash flow and $62 million in distributable free cash flow.
As per Insider Monkey’s database, 23 hedge funds owned stakes in Delek Logistics Partners, LP (NYSE:DKL) in Q3 2024, compared with 26 in the previous quarter. The overall value of these stakes is more than $196.3 million.
6. LyondellBasell Industries N.V. (NYSE:LYB)
Upside Potential as of February 5: 8.95%
Dividend Yield as of February 5: 7.01%
LyondellBasell Industries N.V. (NYSE:LYB) is a multinational chemical company that specializes in plastics, chemicals, and refining. The company recently announced its Q4 2024 earnings and reported revenue of $9.5 billion. The revenue fell by 4.3% from the same period last year but beat analysts’ estimates by $241.3 million. During the quarter, margins declined in most of the company’s businesses due to higher costs for NGL feedstocks and natural gas, while product prices were impacted by seasonally slower demand. However, strong export demand for North American polyethylene helped offset some of the seasonal volume slowdown in domestic markets.
LyondellBasell Industries N.V. (NYSE:LYB)’s cash position remained strong in FY24. The company generated $3.8 billion in operating cash flow during the year with 90% cash conversion. It also remained committed to returning value to shareholders, as it paid $1.9 billion to investors through dividends in 2024. The company upholds a strong investment-grade balance sheet, with $8.0 billion in available liquidity, which includes $3.4 billion in cash and cash equivalents as of the year-end.
LyondellBasell Industries N.V. (NYSE:LYB) currently offers a quarterly dividend of $1.34 per share, having raised it by 7.2% in May 2024. This marked the company’s 14th consecutive year of dividend growth, which makes LYB one of the best dividend stocks on our list. The stock’s dividend yield on February 5 came in at 7.01%.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 38 funds held stakes in LyondellBasell Industries N.V. (NYSE:LYB), down from 41 in the previous quarter. These stakes are worth over $546.2 million in total. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q3.
5. Crown Castle Inc. (NYSE:CCI)
Upside Potential as of February 5: 9.04%
Dividend Yield as of February 5: 7.02%
Crown Castle Inc. (NYSE:CCI) is a Texas-based real estate investment trust company that focuses on providing infrastructure for wireless communication. The company, which primarily focuses on data infrastructure like cell towers, has encountered challenges in recent years due to higher interest rates and tenant issues, impacting its growth. As a result, it expects a decline of approximately 8% in its adjusted funds from operations (FFO) this year. In the past year, the stock has declined by nearly 15%.
In response to these challenges, Crown Castle Inc. (NYSE:CCI) has adjusted its strategy. It has shifted its attention to capital projects with higher returns, leading to a reduction in growth spending plans. In addition, the company has initiated a strategic review of its fiber business. These steps are expected to improve its cash flow and returns, allowing it to better support organic growth opportunities with internal funds.
The company’s performance was also highlighted by Columbia Threadneedle Investments in its Q3 2024 investor letter. Here is what the firm has to say:
“The fund held two out-of-benchmark positions in Real Estate Investment Trust (REIT) companies American Tower Corporation and Crown Castle Inc. (NYSE:CCI). REITs have historically performed well during periods of declining interest rates due to lower borrowing costs. The two companies performed very well during the third quarter after the Federal Reserve cut interest rates 50 basis points in September, with the expectation for additional cuts soon.”
Crown Castle Inc. (NYSE:CCI) currently offers a quarterly dividend of $1.565 per share and has a dividend yield of 7.02%, as of February 5. The company returned $681 million to shareholders through dividends in the most recent quarter, which makes CCI one of the best dividend stocks on our list.
As of the end of Q3 2024, 34 hedge funds tracked by Insider Monkey held stakes in Crown Castle Inc. (NYSE:CCI), compared with 38 in the previous quarter. The overall value of these stakes is more than $1.24 billion.
4. Bloomin’ Brands, Inc. (NASDAQ:BLMN)
Upside Potential as of February 5: 16.9%
Dividend Yield as of February 5: 7.71%
Bloomin’ Brands, Inc. (NASDAQ:BLMN) is a Florida-based restaurant holding company that owns four brands: Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar, Carrabba’s Italian Grill, and BonefishGrill. On November 6, the company entered into a Purchase Agreement with Vinci Partners to strategically re-franchise its Brazilian operations, selling a 67% stake for around $243 million. Analysts believe this move will streamline BLMN’s business and enhance operational efficiency by allowing the company to concentrate on its domestic market. With an upside potential of nearly 17%, BLMN is one of the best dividend stocks on our list.
Bloomin’ Brands, Inc. (NASDAQ:BLMN) is undergoing a leadership transition, with Michael Spanos recently stepping in as CEO to revitalize the business. Known for successfully guiding well-established companies through difficult periods, he brings a strong focus on customer-centric strategies. In addition, the company is in the process of franchising its Brazilian operations.
Bloomin’ Brands, Inc. (NASDAQ:BLMN) has been paying regular dividends to shareholders since 2015. The company had a strong cash position, as it ended the quarter with over $83.6 million available in cash and cash equivalents. It currently offers a quarterly dividend of $0.24 per share and has a dividend yield of 7.71%, as of February 5.
The number of hedge funds tracked by Insider Monkey owning stakes in Bloomin’ Brands, Inc. (NASDAQ:BLMN) grew to 27 in Q3 2024, from 23 in the previous quarter. The consolidated value of these stakes is over $284.6 million. With over 8.4 million shares, Starboard Value LP was the company’s leading stakeholder in Q3.
3. MFA Financial, Inc. (NYSE:MFA)
Upside Potential as of February 5: 18.5%
Dividend Yield as of February 5: 13.23%
MFA Financial, Inc. (NYSE:MFA) is an American specialty finance company that mainly invests in residential mortgage loans and other real estate assets. Mortgage REITs differ significantly from traditional REITs and typically offer higher dividend yields. Instead of owning physical properties, they invest in real estate debt, such as mortgages. Their earnings come from interest income, and they use leverage to enhance returns, functioning more like a bank or hedge fund. Since the start of 2025, the stock has surged by over 3.5%.
In the third quarter of 2024, MFA Financial, Inc. (NYSE:MFA) distributable earnings of $0.37 per share, while its economic book value increased by approximately 1% to $14.46 per share from $14.34 at the end of June. During the quarter, it acquired or originated more than $565.2 million in residential mortgage loans, carrying an average coupon of 9.4%. In addition, it added $294 million in Agency MBS at favorable yields. The company also completed two loan securitizations within the quarter and an additional two after the quarter ended.
MFA Financial, Inc. (NYSE:MFA)’s cash position also came in strong in Q3 2024. The company ended the quarter with over $305.6 million available in cash and cash equivalents. It has been making regular dividend payments to shareholders since 1998, which places it on our list of the best dividend stocks. The company’s quarterly dividend comes in at $0.35 per share for a dividend yield of 13.23%, as of February 5.
Insider Monkey’s database of Q3 2024 indicated that 12 hedge funds held stakes in MFA Financial, Inc. (NYSE:MFA), the same as in the previous quarter. The total value of these stakes is nearly $35 million.
2. Dow Inc. (NYSE:DOW)
Upside Potential as of February 5: 19.9%
Dividend Yield as of February 5: 7.32%
Dow Inc. (NYSE:DOW) is an American multinational chemicals company that mainly operates in the material science industry and is involved in the manufacturing and marketing of a wide range of chemical, plastic, and agricultural products.
Dow Inc. (NYSE:DOW) recently announced its Q4 2024 earnings, reporting revenue of $10.4 billion, down 2% from the same period last year. Despite ongoing macroeconomic challenges, the company achieved a 1% increase in volume compared to the same period last year, marking its fifth consecutive quarter of year-over-year volume growth. This growth was driven by strong demand for high-value applications and the company’s cost-advantaged operations across various regions. In addition, in December, the company finalized an agreement to sell a minority stake in select US Gulf Coast infrastructure assets, a move expected to generate up to approximately $3 billion in cash proceeds.
Dow Inc. (NYSE:DOW) is structured around three main segments: packaging and specialty plastics, industrial intermediates and infrastructure, and performance materials and coatings. Similar to businesses in other commodity-driven industries like oil, gas, and gold mining, Dow has no influence over market prices for raw materials. Instead, its focus remains on cost management and optimizing production efficiency to maintain competitiveness.
Dow Inc. (NYSE:DOW) is a strong dividend company with a stable cash position. In the most recent quarter, the company reported an operating cash flow of $811 million. Moreover, it returned $492 million to shareholders through dividends. It is one of the best dividend stocks on our list as the company has been making regular dividend payments to shareholders since 1912. It offers a quarterly dividend of $0.70 per share and has a dividend yield of 7.32%, as of February 5.
According to Insider Monkey’s database of Q3 2024, 31 hedge funds owned stakes in Dow Inc. (NYSE:DOW), compared with 32 in the previous quarter. The overall value of these stakes is more than $1.2 billion.
1. Movado Group, Inc. (NYSE:MOV)
Upside Potential as of February 5: 64.6%
Dividend Yield as of February 5: 7.33%
Movado Group, Inc. (NYSE:MOV) is a New Jersey-based jewelry stores company, which is responsible for designing and distributing luxury watches for popular brands.
Over the past decade, traditional watchmakers have faced difficulties as smartphones have largely replaced the need for standalone timepieces, while the rise of smartwatches has added further competition. In response, Movado Group, Inc. (NYSE:MOV) has entered the smartwatch market with high-end models priced at $1,000 and above. While the majority of its revenue still comes from conventional watches, this strategic move allows the company to attract consumers seeking advanced technology in their timepieces.
In the third quarter of 2024, Movado Group, Inc. (NYSE:MOV) reported revenue of $182.7 million, which fell by 2.6% from the same period last year. The company’s adjusted operating income came in at $9.3 million. It maintained a solid financial standing at the end of the quarter, with $181.5 million in cash and no outstanding debt. This strong position provides the flexibility needed to carry out its strategic initiatives. It is one of the best dividend stocks on our list as the company has been making regular dividend payments to shareholders since 1996. Currently, it offers a quarterly dividend of $0.35 per share and has a dividend yield of 7.33%, as of February 5.
The hedge fund sentiment around Movado Group, Inc. (NYSE:MOV) remained bullish as hedge fund positions in the company grew to 20 at the end of Q3 2024, from 16 in the previous quarter, as per Insider Monkey’s database. The stakes held by these funds are worth $65.6 million collectively. With over 1.4 million shares, Royce & Associates was the company’s leading stakeholder in Q3.
Overall Movado Group, Inc. (NYSE:MOV) ranks first on our list of the best dividend stocks with over 7% yield. While we acknowledge the potential for MOV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MOV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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