Yield-Oriented Equity Selection: Five Names to Consider

The current macroeconomic climate, characterized by subdued overall equity market returns and historically compressed bond yields, necessitates a reevaluation of income-generating strategies. While the S&P 500 dividend yield remains comparatively modest, a select cohort of companies continues to offer distributions exceeding 5%. This analysis presents five such entities, subject to due diligence, that warrant consideration by investors prioritizing current income.

Clearway Energy: A Focus on Stable Cash Flow Generation

Clearway Energy (CWEN, CWEN.A) currently exhibits a dividend yield exceeding 5%. The company’s business model centers on the operation of clean power generation assets under long-term power purchase agreements (PPAs). This structure provides a degree of revenue visibility, mitigating, though not eliminating, demand risk. Management targets approximately 70% cash flow payout, retaining the balance for reinvestment and growth.

Projections suggest a compound annual growth rate of 7-8% in cash flow per share through 2030, contingent upon successful execution of planned projects and favorable regulatory developments. Beyond 2030, management anticipates sustaining a growth rate of 5-8%, though such projections are subject to inherent uncertainties.

NNN REIT: Triple-Net Leases and Retail Exposure

NNN REIT (NNN) presents a dividend yield in excess of 5.5%. The REIT’s investment strategy centers on single-tenant, triple-net-leased properties, predominantly within the retail and service sectors. This structure effectively transfers property operating expenses to tenants, providing a degree of operational leverage.

NNN REIT maintains a conservative capital structure and historically allocates approximately 70% of adjusted funds from operations (AFFO) to dividends. The company’s consistent dividend growth—36 consecutive years—is noteworthy, though past performance is not indicative of future results. Growth is largely facilitated through sale-leaseback transactions, a strategy that, while effective, relies on continued access to capital and favorable market conditions.

Oneok: Midstream Infrastructure and Stable Contracts

Oneok (OKE) offers a dividend yield of approximately 5.5%. The company operates within the midstream energy sector, transporting and processing natural gas and other energy commodities. A significant portion of Oneok’s revenue is derived from long-term, fixed-rate contracts and regulated rate structures, providing a degree of earnings stability.

Recent acquisitions have expanded Oneok’s operational footprint, though integration risks and the realization of anticipated synergies remain to be fully assessed. Management projects annual dividend growth of 3-4%, contingent upon the successful completion of expansion projects and the maintenance of a robust balance sheet.

Verizon: Telecom Dominance and Dividend Sustainability

Verizon (VZ) currently yields over 7%. The company’s revenue is driven by recurring subscriber fees for wireless and internet services. Verizon consistently reinvests capital into network maintenance and expansion, supporting its dividend payout and maintaining a strong financial position.

The recent acquisition of Frontier strengthens Verizon’s broadband network and expands its customer base. However, competitive pressures within the telecommunications sector and the capital intensity of network upgrades pose ongoing challenges. The company’s 19-year streak of dividend growth is commendable, though future growth rates may be constrained by market dynamics.

VICI Properties: Experiential Real Estate and Inflation Protection

VICI Properties (VICI) offers a dividend yield exceeding 6%. The REIT invests in gaming, hospitality, and entertainment properties, benefiting from long-term net leases. An increasing proportion of VICI’s leases incorporate inflation-linked rent escalations, providing a hedge against rising prices.

Recent transactions, including a sale-leaseback agreement with Golden Entertainment, demonstrate VICI’s commitment to expanding its portfolio. The company’s ability to identify and acquire accretive properties and successfully integrate them into its existing operations remains crucial. VICI has demonstrated a compound annual dividend growth rate of 6.6% since 2018, a rate that, while impressive, may not be sustainable in all market environments.

Concluding Remarks

Clearway Energy, NNN REIT, VICI Properties, Oneok, and Verizon present compelling dividend yields. Each company supports its distributions with stable cash flows and, to varying degrees, demonstrates a commitment to capital allocation and financial discipline. While past performance is not indicative of future results, these companies warrant further investigation by investors seeking income-generating assets. A thorough assessment of each company’s specific risks and opportunities is, of course, paramount.

2026-01-24 15:34