3 High-Yield Dividend Stocks to Buy Now for a Lifetime of Passive Income

Key Points

• At recent prices, income-seeking investors can receive an average yield of 5.6% from Brookfield Infrastructure Corp., Realty Income, and Pfizer..

• Realty Income and Brookfield Infrastructure invest in assets that generate very reliable cash flows.

• Pfizer expects some important patent expirations, but it has a lot of new drugs that could offset the losses.

• 10 stocks we like better than Brookfield Infrastructure ›

Investors seeking passive income sources that grow steadily have a few interesting options to choose from right now. Shares of Brookfield Infrastructure Corp. (NYSE: BIPC), Realty Income (NYSE: O), and Pfizer (NYSE: PFE) are offering a rare combination of high yields and steady payout raises.

The average dividend yield from these stocks is an eye-popping 5.6% at recent prices. You might expect stocks with sky-high yields to be on rocky ground, but this isn't the case. Each of these companies has a decades-long streak of annual payout increases that could continue in the years ahead.

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Brookfield Infrastructure Corp

With gas pipelines, electricity transmission lines, railroads, toll roads, data centers, and semiconductor manufacturing foundries in its portfolio, a bet on Brookfield Infrastructure is a bet on a growing global economy.

Essential infrastructure tends to generate stable cash flows thanks to long-term contracts. Despite some ups and downs for the global economy, Brookfield Infrastructure has raised its dividend payout by 9% annually since 2009.

New investors don't need to wait long for this stock to contribute heaps of passive income to their brokerage accounts. It's been offering a juicy 4.2% dividend yield and management expects to raise its payout by 5% to 9% annually.

The artificial intelligence (AI) revolution is going to need lots of energy and data transmission. With assets required for both located all over the globe, Brookfield Infrastructure looks like a safe way to hitch a ride on what seems like an unstoppable trend.

Realty Income

With 15,606 buildings in its portfolio at the end of June, Realty Income is one of the world's largest real estate investment trusts (REITs). At recent prices, it offers a big 5.3% yield.

Realty Income focuses on industries that are extra resilient to increasingly online shopping preferences. Businesses that operate grocery stores, convenience stores, and home improvement stores are its largest tenants by rent collected.

With annual rent escalators written into long-term net leases, Realty Income can record steadily rising cash flows even when its tenants are going through a rough patch. This is how it's been able to raise its monthly dividend payout every quarter, except one, since becoming a publicly traded company in 1994.

There's a lot of room for Realty Income to grow as a relatively low-cost source of capital for businesses that own the buildings they operate. In the U.S., publicly traded net-lease REITs account for 4% of their addressable market. This figure is just 0.1% in Europe. With plenty of companies across the pond available to sign sale-leaseback deals, there's a good chance this REIT can maintain its decades-long payout-raising streak.

Pfizer

In 2023, U.S. spending on prescription drugs soared by 11.4% to $449.7 billion after rising by 7.8% in 2022. As one of the world's largest pharmaceutical businesses, Pfizer is an excellent way to ride this unstoppable wave.

This pharma giant has raised its dividend payout every year since 2009. Despite the streak, investors concerned about upcoming patent expirations have knocked the stock down by more than half from its previous peak. At recent prices, it offers a 7.2% yield.

Earlier this year, Pfizer's CEO, Albert Bourla, warned investors that a wave of patent expirations for key products could reduce annual revenue by $17 billion to $18 billion over the next five years. Fortunately, the company has wisely reinvested previous profits. Bourla also expects annual sales of acquired products to exceed $20 billion by 2030.

Recently, Pfizer announced its intention to acquire Metsera, a company developing a weight management drug that only needs to be injected once per month. With heaps of recently acquired products that could offset upcoming losses to patent cliffs, the company could continue its payout-raising streak for many years to come.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer and Realty Income. The Motley Fool has a disclosure policy.