2025 US Stock Dividend Yield Investment Guide | High-Yield Stocks Selection and Strategy Analysis

Why Focus on High-Yield US Stocks in 2025?

The US stock market performed strongly in 2024, but as the rally stabilizes, investors face new choices. The current dividend yield of the S&P 500 is only 1.2%, near a 20-year low, indicating that traditional low-risk returns are no longer abundant. However, the market is not entirely bleak; there remains a selection of high-quality companies with yields over 5%, offering valuable opportunities for investors seeking stable cash flow.

Wall Street institutions are generally optimistic about dividend prospects in 2025. Goldman Sachs forecasts that earnings per share (EPS) of S&P 500 constituents will grow by 11%, driving a 7% increase in dividends. Bank of America Securities is even more optimistic, expecting dividend growth of up to 12%. Howard Silverblatt, an analyst at S&P Dow Jones Indices, estimates that total dividends in 2025 will reach a new high of approximately $685 billion, up from $630 billion in 2024.

Market Overview: Dividend Potential from Earnings Growth

In 2023, the earnings growth of the S&P 500 was sluggish, but it has rebounded since 2024. Market data shows a lag of about three quarters between earnings growth and dividend increases. Given the accelerated EPS growth over the past year, dividends in 2025 are likely to rise accordingly.

At the industry level, traditional stable sectors such as utilities, energy infrastructure, real estate investment trusts (REITs), and telecommunications are the main sources of high-yield stocks. These sectors’ mature business models and robust cash flows provide a solid foundation for sustained dividend payments.

In-Depth Analysis of the Top Five High-Yield US Stocks

1. Brookfield Renewable (BEPC) | Global Leader in Renewable Energy

Brookfield Renewable controls one of the world’s largest pure renewable energy portfolios, with an installed capacity of 6,707 MW. Its assets include 204 hydroelectric facilities, 72 river system hydro stations, and 28 wind farms, spanning 13 power markets across Canada, the US, and Brazil, achieving business and geographic diversification.

In Q3 2024, revenue was $4.444 billion (up 19.62% YoY), with a basic EPS of -$0.83. JP Morgan maintains an overweight rating with a target price of $28.00. The current estimated annual dividend yield is 5.60%, with a five-year stock price decline of 16.23%.

2. Enbridge (ENB) | Stable Energy Infrastructure

Enbridge’s business covers liquids pipelines, natural gas transportation, natural gas distribution and storage, renewable energy generation, and energy services, serving as a key hub for North American energy transportation. Its liquids pipeline division manages networks in Canada and the US, transporting crude oil and liquids.

The company has maintained a dividend growth record for 22 consecutive years, with a current yield of 6.03%. Royal Bank of Canada recently raised its target price from $59.00 to $63.00 and maintains an “outperform” rating. Over the past five years, its stock price has increased by 9.85%, with a market cap of $97.529 billion.

3. Realty Income (O) | Commercial Real Estate Rental Machine

Realty Income focuses on single-tenant commercial properties, operating through long-term net lease agreements. The company owns over 12,237 properties, with approximately 236.8 million square feet of leasable space. Currently, 12,111 properties are leased, with 126 pending rental or sale.

In Q3 2024, revenue was $3.931 billion (up 30.91% YoY), net profit was $666 million, and basic EPS was $0.75. Stifel maintains a buy rating with a target price of $66.50. The estimated annual dividend yield is 5.80%, with a market cap of $47.253 billion.

4. Verizon (VZ) | US Telecom Giant with Stable Returns

Verizon, headquartered in New York, is a major US telecom company and one of the Dow Jones Industrial Average components. Its business includes voice calls, fixed broadband, and wireless communications. Its subsidiary, Verizon Wireless, is the largest wireless service provider in the US.

In Q4 2024, revenue was $35.7 billion (up 1.7% YoY), beating expectations of $35.3 billion. BofA Securities maintains a hold rating with a target price of $45. The estimated annual dividend yield is 6.99%, the highest among the five, with a market cap of $166.969 billion and a P/E ratio of 17.17.

5. Vici Properties (VICI) | Rental Income from Entertainment Assets

VICI, established in 2016, focuses on owning and acquiring casinos, hotels, and entertainment venues, protected by long-term triple-net leases. Its portfolio includes 93 experiential assets, 54 of which are casino properties in the US and Canada, including Caesars Palace, MGM Grand, and The Venetian Resort, iconic Las Vegas landmarks.

In Q3 2024, revenue was $2.873 billion (up 7.2% YoY), net profit was $2.097 billion, and basic EPS was $1.98. Barclays assigns a buy rating with a target price of $36. The estimated annual dividend yield is 5.89%, with a market cap of $30.877 billion and a P/E ratio of 10.86.

Four-Step US Stock Yield Investment Strategy

Step 1 | Select Industry Leaders

Choose leading companies within 1-3 industries of interest, thoroughly understanding their financials, profitability, and growth prospects. Ensure the selected companies have stable income, ample cash flow, and sustainable business development.

Step 2 | Assess Income Stability

Filter for companies that have maintained relatively stable earnings through 5-10 years of economic cycles. These companies can uphold dividend commitments amid market changes, ensuring reliable investment returns.

Step 3 | Evaluate Dividend Policies and History

Review the company’s dividend payment records over recent years, prioritizing firms with stable or increasing dividends. Understand dividend frequency, payout ratios, and policy details, excluding companies with unreasonable dividend policies.

Step 4 | Conduct Comprehensive Analysis of Dividend Yield and Expert Ratings

Calculate and compare the dividend yields of various companies, analyzing reasons behind high or low yields. Finally, consider recent analyst and expert ratings to ensure a reasonable entry point, avoiding increased capital costs.

Core Advantages of High-Yield US Stocks

High-yield US stocks offer multiple advantages. First, they provide ample cash returns; quality dividend stocks can generate substantial annual cash income for investors. Second, their income is stable and predictable; established companies with long histories have solid profitability and cash flows, ensuring consistent dividends. Additionally, these companies often have capital appreciation potential, with growth driving stock prices higher.

From a risk management perspective, high-yield US stocks are typically large, market-leading firms with strong resilience, less vulnerable to market volatility and severe losses. By allocating to high-yield stocks in traditional sectors, investors can balance their portfolios, reducing reliance on high-growth tech stocks, achieving industry diversification, and effectively dispersing risk.

Investment Risks and Countermeasures

It should be noted that high-yield US stocks are not risk-free. Companies with high debt levels, unstable earnings, or questionable business models face risks of dividend adjustments or suspensions. Investors should conduct thorough research and financial assessments beforehand, fully understanding debt structures, cash flow status, and industry outlooks. Adjust allocations according to personal risk tolerance to balance risk and return.

Investing in US dividend stocks is not about blindly chasing high yields but selecting high-quality companies with genuine dividend-paying capacity and growth potential based on comprehensive research and rational analysis.