20 Years On Wall Street Taught Me: Buy and Hold High-Yield Dividend Giants
David Johnson ; 2025-10-23 16:52:03
After a careerthat spanned two decades of experience at Bear Stearns, Lehman Brothers, and Morgan Stanley, I gained an institutional perspective on dividend stock investing. My tenure across these premier Wall Street firms exposed me to fundamental analysis, credit evaluation, and risk management practices that directly translate to selecting quality dividend-paying companies. Having witnessed firsthand the 2008 financial crisis and its aftermath—including the collapse of Bear Stearns and Lehman Brothers, from which I was fortunately spared as I had left both firms by 2004— I developed a keen appreciation for balance sheet strength, sustainable payout ratios, and the importance of dividends as a stabilizing force during market turbulence.
24/7 Wall St. Key Points:
- The stock market is very overbought, and the possibility of another correction, like we saw earlier this year, could be coming our way.
- Quality high-yield dividend stocks are the perfect way to invest for the long term while realizing regular dividend payments that provide passive income.
- Quality dividend stocks will hold up well if stock market volatility increases, and for long-term investors, it remains a safe way to invest for decades.
- Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor)
By analyzingcash flow generation, capital allocation strategies, and management quality, I can identify companies with durable competitive advantages and the financial discipline to maintain and grow their dividends through economic cycles. Early in my career, I realized that dividend investing is not merely an income strategy, but also a comprehensive framework for building wealth through companies that consistently return capital to shareholders while maintaining financial stability.
Five top companiesare the bedrock and pinnacle for dividend investors, and all are the kind of stocks that growth and income investors can buy now, tomorrow, next week, or next year and hold for the long term. All are rated Buy at top Wall Street firms that we cover here at 24/7 Wall St.
Why do we cover quality high-yield dividend stocks?
Since 1926,dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Alexandria Real Estate Equities
Loading stock data...With a hefty yieldand a unique niche in the real estate arena, this is an outstanding company trading at a very reasonable valuation. Alexandria Real Estate Equities, Inc. (NYSE: ARE) is an owner, operator, and developer of collaborative life science, agricultural technology, and advanced technology mega campuses in AAA innovation cluster locations. Alexandria yields 6.27% and specializes in owning medical offices, with a focus on medical research facilities. The REIT has increased its dividend annually for 15 straight years and maintains a robust balance sheet with no material near-term debt maturities. In addition, the company’s adjusted funds from operations comfortably cover its dividend payments.
The company’slocations include:
- Greater Boston
- the San Francisco Bay Area,
- New York City
- San Diego
- Seattle
- Maryland
- the Research Triangle
The Company,through its venture capital platform, provides strategic capital to life science, agrifoodtech, climate innovation, and technology companies.
Its tenantsinclude:
- Multinational pharmaceutical companies
- Public and private biotechnology companies
- Life science product
- Service and medical device companies
- Digital health
- Technology
- Agtech companies
- Academic and medical research institutions
- United States government research agencies
- Non-profit organizations
- Venture capital firms.
The companyhas a Labspace asset base predominantly concentrated in markets with barriers to entry.
Robert Bairdhas a Buy rating and a $102 target price objective.
Altria
Loading stock data...Altria is oneof the world’s largest producers and marketers of tobacco, cigarettes, and related products. This tobacco company offers value investors a compelling entry point and a generous dividend yield of 6.26%. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.
The company’sdividend payout is based on free cash flow, ranging from ~64% to 80% depending on the quarter. In recent quarters, free cash flow has exceeded dividend payments, providing a solid buffer. Altria generates strong cash flow from its core tobacco business, which provides a stable base, albeit with regulatory risk, and yields are among the highest in the S&P 500, at least for now.
The companyprovides cigarettes primarily under the Marlboro brand.
- Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches
- e-vapor products under the NJOY ACE brand.
It sells itstobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria usedto own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Stifel has aBuy rating with a $63 target price.
Chevron
Loading stock data...ChevronCorporation is an American multinational energy company that is predominantly specialized in oil and gas. This integrated giant is a safer option for investors looking to position themselves in the energy sector and pays a substantial 4.17% dividend, which was raised by 5% earlier this year. Chevron Corporation (NYSE: CVX) operates integrated energy and chemicals businesses worldwide through its subsidiaries and offers investors very strong credit ratings (AA), diversified operations, good margins, a long history of paying/dividends and raising dividends yearly.
The companyoperates in two segments:
- Upstream
- Downstream
The Upstreamsegment is involved in the following:
- Exploration, development, production, and transportation of crude oil and natural gas
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines, and transportation, storage
- Marketing of natural gas, as well as operating a gas-to-liquids plant
The Downstreamsegment engages in:
- Refining crude oil into petroleum products
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing renewable fuels
- Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
It also involvescash management, debt financing, insurance operations, real estate, and technology businesses.
ChevronCorporation announced in late 2023 that it had entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. The Federal Trade Commission approved the deal last October, and it is expected to close this fall.
UBShas a Buy rating with a huge $197 target price.
Enterprise Products Partners
Loading stock data...EnterpriseProducts Partners is an American midstream natural gas and crude oil pipeline company headquartered in Houston, Texas. This company is one of the most extensive publicly traded energy partnerships, paying a very reliable 6.79% dividend. The company’s debt-to-EBITDA ratio ranges from 3.1x to 3.4x, which is moderate for a midstream energy company, and the interest coverage ratio is 5 times. Enterprise Products Partners generates strong free cash flow, with an operating cash flow of approximately $8.8 billion, resulting in around $4.2 billion in free cash flow annually, after deducting capital expenditures. Another significant benefit for shareholders is that most of the corporate debt is fixed-rate, thereby limiting the risk of rising interest rates.
Enterprise Products Partners L.P. (NYSE: EPD) provides various midstream energy services, including:
- Gathering
- Processing
- Transporting and storing natural gas, natural gas liquids (NGL), and fractionation
- Import and export terminalling
- Offshore production platform services
The companyhas four reportable business segments:
- Natural Gas Pipelines and Services
- NGL Pipelines and Services
- Petrochemical Services
- Crude Oil Pipelines and Services
One reasonmany analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.
JPMorganhas an Overweight rating with a $38 target price objective.
Verizon
Loading stock data...Verizon CommunicationsInc., commonly known as Verizon, is an American multinational telecommunications company that continues to offer tremendous value. It trades 9.13 times its estimated 2026 earnings, pays a 6.26% dividend, and is up almost 9% in 2025. Verizon Communications, Inc. (NYSE: VZ), through its subsidiaries, provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.
Verizon’s interestcoverage ratio is 4.6×-5× trailing twelve months, which offers more than enough cushion for dividend payments. With a very predictable revenue stream from telecom services, the company has less exposure to commodity cycles. In addition, the large scale helps in financing and absorbing shocks.
It operatesin two segments:
- Verizon Consumer Group
- Verizon Business Group
- The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements.
It also providesfixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:
- Smartphones
- Tablets
- Smartwatches and other wireless-enabled connected devices
The segmentalso offers wireline services in the Mid-Atlantic, Northeastern United States, and Washington, D.C., through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.
The Businesssegment provides wireless and wireline communications services and products, including:
- FWA broadband
- Data
- Video and conferencing
- Corporate networking
- Security and managed network
- Local and long-distance voice
Network accessservices to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.
Goldman Sachshas given the company a “Buy” rating and a price target of $49.