3 High-Yielding Dividend Stocks to Buy and Hold For the Long Haul

Key Points

• The stocks listed here offer solid dividend yields ranging between 2.9% and 5.5%.

• Strong financials support these payouts, making them safe income stocks to rely on.

• 10 stocks we like better than UnitedHealth Group ›

Dividend stocks that offer high yields can be gold mines for your portfolio as they can generate loads of recurring income for you for years. Whether you want to use the money to reinvest in those stocks or simply use the dividend income to help add to your cash position, they can make for great long-term investments to have.

The key thing is to focus on dividend stocks that have strong fundamentals to support their payouts. Otherwise, chasing a high-yielding stock may only end up leaving you with disappointment if the dividend payment gets cut in the future.

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The average stock on the S&P 500 pays just 1.2% but you can collect well more than that with the three stocks listed below. UnitedHealth Group (NYSE: UNH), Medtronic (NYSE: MDT), and Realty Income (NYSE: O) all pay more than double that, and here's why they can be fantastic investments to add to your portfolio today.

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UnitedHealth Group

Health insurer UnitedHealth has been among the worst-performing stocks on the S&P 500 this year. It is down 39% as of Sept. 2, and the decline was even worse until investors learned that billionaire investor Warren Buffett bought shares of the company, which gave it a boost recently.

UnitedHealth has been battling with higher medical costs this year, and there is an ongoing Department of Justice investigation into its billing practices, which has spooked investors. The sell-off has pushed the stock price down to multi-year lows, and its dividend yield is now around 2.9%, which is higher than normal.

Despite the flurry of bad news this year, UnitedHealth's fundamentals aren't terribly bad. The company has generated $25.3 billion in free cash flow over the trailing 12 months, which is easily enough to cover its dividend payments, which have totaled $7.8 billion over that time frame.

Being a key player in the healthcare industry, UnitedHealth still looks to be a good buy for the long term. Although it may be facing adversity right now, it's by no means in a dire situation. Buying it on weakness today could set you up for some fantastic gains down the road, while also locking in a great yield.

Medtronic

Another healthcare stock that can make for a great dividend investment is Medtronic. It currently yields 3.1%, offering a bit of a higher payout than UnitedHealth. The medical device company, which has therapies and technologies that help treat 70 different health conditions, has been experiencing solid growth.

Its revenue rose by more than 8% in its most recent quarter (which ended July 25), totaling $8.6 billion. It boosted its guidance for the year, and it forecasts an organic growth rate of around 5% for its current fiscal year (it ends in April).

This is another strong, cash-generating business with free cash flow over the past four quarters totaling $5.3 billion -- higher than the $3.6 billion it paid in dividends during that time. Shares of Medtronic are up 17% this year, and with a beta value of around 0.8, it's less volatile than the overall markets, making it an appealing stock to buy and hold for the long term.

Realty Income

The highest yield on this list belongs to Realty Income, which is a real estate investment trust (REIT) that yields 5.5% and provides investors with a payout every month, making it a rarity among dividend stocks that typically pay every quarter. It's also a remarkably consistent dividend payer; in August, it announced its 662nd consecutive monthly dividend.

REITs typically use funds from operations, or FFO, to measure their level of profitability and the safety of their dividend payments. In its most recent quarter, for the period ended June 30, Realty Income's FFO per share of $1.06 was nearly identical to the $1.07 it reported in the prior-year period. That's well above the rate of its dividend over the course of three months: $0.807.

Realty Income's diversified portfolio of assets includes clients from 91 different industries. With an occupancy rate regularly around 99%, it's one of the safest and most stable dividend stocks you can own. When you factor in its monthly payments and high yield, it effectively becomes a no-brainer buy for income-seeking investors.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Medtronic and UnitedHealth Group and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.