3 Mega Dividend Stocks With Yields as High as 13.4%

Key Points

• Annaly Capital Management recently increased its already monster dividend.

• Western Midstream Partners believes it has the fuel to continue increasing its high-yielding payout.

• Pfizer is working hard to ensure it can continue increasing its lucrative dividend.

• 10 stocks we like better than Annaly Capital Management ›

Dividend yields are historically low these days. The S&P 500 yields less than 1.2%, which is near its lowest level on record.

Despite this, not all stocks offer low yields. Here are three dividend stocks with mega yields as high as 13.4%. Though these ultra-high-yielders carry higher risk profiles, they could provide investors with substantial income in the coming year.

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1. A sky-high dividend yield

Annaly Capital Management (NYSE: NLY) currently clocks in with a 13.4% dividend yield. That's high, even for a real estate investment trust (REIT) where the average yield is closer to 4%.

The company is a leader in residential mortgage financing. It invests in mortgage-backed securities (MBSes) guaranteed by government agencies (Fannie Mae, Freddie Mac, and Ginnie Mae). It also invests in residential mortgage loans that aren't guaranteed by those agencies and in mortgage servicing rights. This diversified portfolio provides the mortgage REIT with multiple revenue streams.

Annaly uses leverage to boost its returns. This strategy can be very lucrative during strong market conditions. For example, Annaly's earnings available for distribution have risen from $0.66 per share in the third quarter of last year to $0.73 per share in the second quarter of 2025. That enabled Annaly to bump up its dividend from $0.65 per share to $0.70 per share. However, its earnings have declined in the past, which has forced the REIT to reduce its dividend. Given these dynamics, Annaly is a fairly high-risk, high-reward income stock.

2. A high-octane income stream

Western Midstream Partners (NYSE: WES) currently yields 9.5%. This elevated yield is partly due to the fact that it is a master limited partnership (MLP). Note that MLPs send investors a Schedule K-1 Federal Tax form each year, which can provide tax advantages, but may also add complexity to your tax reporting.

The MLP owns energy midstream assets such as pipelines and processing plants that generate fairly stable cash flow backed by long-term contracts. Western Midstream expects to produce between $1.3 billion and $1.5 billion of free cash flow this year. That's enough money to cover its lucrative distribution and capital spending to maintain and expand its operations with room to spare.

That capital spending should give Western Midstream the fuel to increase its already high-yielding distribution at a low-to-mid single-digit annual rate. The company can grow its payout even faster if it completes acquisitions. It's currently working to close its $2 billion purchase of Aris Water Solutions, which will further diversify its business and boost its fee-based cash flows, giving it even more fuel to grow its distribution.

3. A company navigating a looming cliff

Pfizer (NYSE: PFE) currently has a monster 6.3% dividend yield. The pharmaceutical company has paid 347 consecutive quarterly dividends. It has raised its payment for more than 15 years in a row. The company believes its ability to increase its dividend showcases its strong financial performance and reflects its commitment to return value to its investors.

One reason Pfizer has such a high dividend yield is due to market worries about its impending "patent cliff." By 2028, the company will lose the exclusivity to Eliquis, Ibrance, Xtandi, and Prevnar 13. Those drugs represent over $17 billion in annual sales. This situation heightens its risk profile, as future revenue losses could challenge Pfizer's ability to maintain or grow its dividend.

Pfizer is working to get out ahead of this issue by cutting costs, investing heavily in research and development (R&D) to launch new products, and making acquisitions. In 2023, it bought Seagen for $43 billion to bolster its cancer platform. The company also spent nearly $1.3 billion to acquire exclusive rights to develop, manufacture, and commercialize a promising potential cancer immunotherapy from China's 3SBio earlier this year.

Pfizer is also investing heavily in R&D, aiming to develop eight potential blockbuster drugs (i.e., over $1 billion in sales) by 2030. Additionally, it's on track to deliver about $7.2 billion in net cost savings by 2027 through productivity gains and operating margin expansion. If Pfizer can successfully navigate its patent cliff, it will be able to continue paying a rising dividend.

High risk, high potential payouts

Annaly Capital Management, Western Midstream Partners, and Pfizer have mega yields, due in part to their higher risk profiles. Those big-time payouts make these stocks potentially alluring options for more risk-tolerant investors seeking big-time income streams.

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Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.