Want $7,800 in Annual Passive Income? Invest $100,000 in These 3 Ultra-High-Yield Dividend Stocks.

Key Points

• Ares Capital offers an especially juicy dividend and has trounced the S&P 500's total return since 2004.

• Energy Transfer plans to grow its distribution by at least 3% and is poised to benefit from AI demand.

• Pfizer is a great stock for income and value investors.

• 10 stocks we like better than Pfizer ›

I've become increasingly fonder of dividend stocks the older I've gotten. Part of the attraction is that I would like to have a steady income stream in the future. For now, though, I'm reinvesting dividends to hopefully further grow my portfolio.

If you're already at the point of wanting income flowing into your bank account regularly, there are plenty of great dividend stocks from which to choose. Do you want around $7,800 in annual passive income? There are no guarantees in investing, but as things stand now, you can get that by investing $100,000 (spread equally) over these three ultra-high-yield dividend stocks.

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1. Ares Capital

Let's start with one of my favorite ultra-high-yielders, Ares Capital (NASDAQ: ARCC). This stock pays a forward dividend yield of 9.4%. Investing one-third of an initial $100,000 should generate annual dividend income in the ballpark of $3,140.

Some might wonder if such a lofty yield could be highly risky. I don't think so. Ares Capital has maintained or grown its dividend for 64 consecutive quarters (16 years). The company continues to generate strong cash flow that should allow it to extend that streak.

I like Ares Capital's business model. It's the largest publicly traded business development company (BDC). The market opportunity for BDCs is growing as banks consolidate and more borrowers turn to direct lending because it's quicker and easier to close transactions.

Ares Capital's total returns since its IPO in 2004 have trounced the S&P 500 (SNPINDEX: ^GSPC). I expect this trend to continue over the long run as the company capitalizes on its big opportunity in meeting the financing needs of middle-market businesses.

2. Energy Transfer LP

Energy Transfer LP (NYSE: ET) is another great stock for investors seeking reliable passive income. This midstream master limited partnership (MLP) pays a distribution that yields 7.8%. At that level, an investment of one-third of your initial $100,000 would produce an annual income of around $2,600.

I believe that's just a start, though. Energy Transfer is targeting annual distribution growth of between 3% and 5%. The LP is on the right track, announcing an increase of its distribution of more than 3% in July 2025.

Energy Transfer operates more than 140,000 miles of oil, natural gas, and natural gas liquids (NGLs) pipelines. It also owns 34% of Sunoco LP (NYSE: SUN), which distributes motor fuel in more than 40 U.S. states and territories.

The growth opportunity for Energy Transfer might be better than you think, too. The MLP has a substantial project backlog focused on driving growth. In particular, the demand for electricity fueled by natural gas is growing by leaps and bounds, with data centers hosting artificial intelligence (AI) systems driving much of this growth.

3. Pfizer

Pfizer's (NYSE: PFE) forward dividend yield is around 6.4%. Investing the final one-third of the initial $100,000 in the pharma stock should bring our total annual passive income to well over $7,800.

I view Pfizer as one of the better bargains on the market. Its forward price-to-earnings ratio is under 9. That's well below the average forward earnings multiple of over 17 for the S&P 500 healthcare sector.

The big drugmaker also recently announced a major deal with the White House that removes some uncertainty that was hanging over its head like a dark cloud. Pfizer will cut the prices of many of its products in the U.S. and participate in a new "TrumpRx" website that will help consumers find discounted prescription drugs. It will also invest another $70 billion in expanding U.S. operations. In exchange, Pfizer won't be affected by the Trump administration's steep tariffs on pharmaceutical imports for three years.

A looming patent cliff presents another challenge for Pfizer. However, the company has multiple drugs with fast-growing sales that should largely offset any revenue declines from patent expirations. Pfizer's business development deals and pipeline progress should also help boost sales and profits.

Three important disclaimers

I do need to make a few disclaimers.

First, it's possible that Ares Capital, Energy Transfer, and Pfizer could reduce their dividends. I don't expect that to happen, though, since all three companies appear to be in a strong position to keep the dividends flowing and growing.

Second, any of these stocks could tumble and wipe out any passive income you make from dividends. However, I believe that all three stocks will be winners over the long term.

Third, no one should invest a disproportionate amount of their money in only three stocks. If all you have to invest is $100,000, don't put all of it in these three stocks. It's important to build a diversified portfolio. I think that Ares Capital, Energy Transfer, and Pfizer are great picks for investors seeking income, but they shouldn't be the only stocks owned.

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Keith Speights has positions in Ares Capital, Energy Transfer, and Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.