Got $1,000 to Invest? These 3 High-Quality, High-Yield Dividend Stocks Could Turn Idle Cash Into More Than $50 of Annual Passive Income.

Key Points

• Oneok has delivered a quarter century of dividend stability and growth.

• Verizon has increased its dividend for 18 straight years.

• Vici Properties has raised its payout every year since its formation.

• 10 stocks we like better than Verizon Communications ›

Investing in the stock market is a great way to turn idle cash into passive income. Using that money to buy dividend stocks enables you to collect recurring dividend income. You can use that money to help cover your bills or reinvest it into generating more income.

For example, investing $1,000 across three high-quality dividend stocks with higher dividend yields could turn it into more than $50 of passive income each year:

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Data source: Google Finance.

Image source: Getty Images.

Oneok

Oneok operates a large and integrated energy infrastructure platform. Its pipelines, processing plants, and storage terminals generate stable cash flow, with approximately 90% of its revenue coming from fee-based contracts. The pipeline company's steady earnings have enabled it to deliver more than a quarter-century of dividend stability and growth. While Oneok hasn't increased its dividend every year, it has raised it by more than 1,200% since 2000.

Fueling that growth has been a combination of organic expansion projects and accretive acquisitions. Oneok has been on an acquisition spree in recent years. It bought Magellan Midstream Partners in a transformational $18.8 billion deal in 2023, expanding its operations into refined petroleum products and crude oil. Last year, it acquired Medallion Midstream and a controlling interest in EnLink Midstream for $5.9 billion, followed by the purchase of the remaining stake in EnLink for $4.3 billion. Oneok also recently bought the remaining interest in a joint venture for $940 million.

Those deals should continue fueling earnings growth through 2027 as the company captures additional merger synergies. In addition, it has several organic expansion projects under way that should come online through early 2028. These growth drivers should give Oneok the fuel to grow its dividend by 3% to 4% annually in the coming years.

Verizon

Verizon's mobile and broadband businesses generate lots of recurring revenue as customers pay their bills. That provides the telecom giant with the funds to invest in expanding its 5G and fiber networks, as well as its high-yielding dividend. The company expects to generate $17.5 billion to $18.5 billion in free cash flow this year after funding a similar range of capital expenditures. That's plenty of money to cover the company's lucrative dividend, which costs it more than $11 billion per year.

The company uses the cash it retains to strengthen its already rock-solid balance sheet. That gives it the financial flexibility to make acquisitions as the right opportunities arise. Last year, the company agreed to acquire Frontier Communications in a $20 billion deal that should close in 2026. The transaction will significantly enhance the company's fiber operations while generating over $500 million in annual cost savings.

Verizon's growing business and strong free cash flow put it in an excellent position to continue increasing its high-yielding dividend. Last year, the company delivered its 18th consecutive annual dividend increase. That's the longest current streak in the U.S. telecom sector.

Vici Properties

Vici Properties is a real estate investment trust (REIT) focused on owning gaming, hospitality, wellness, entertainment, and leisure destinations. The REIT leases these properties back to operating companies under long-term, triple net (NNN) agreements. Those leases provide it with stable cash flow that increasingly rises with inflation -- 42% of its leases this year, rising to 90% by 2035.

The REIT pays out about 75% of its stable cash flow in dividends. It retains the rest to invest in growing its portfolio. Vici Properties will acquire properties in sale-leaseback transactions. It will also fund the development of experiential properties through real estate-backed loans. Those financing arrangements provide it with interest income and often come with the opportunity to acquire the properties in the future.

Vici Properties' growing portfolio allows it to increase its dividend. It has raised its payout every single year since its formation seven years ago. It has grown its dividend at a 7.4% compound annual rate. That leads its triple net peers, which have delivered a 2.3% average dividend growth rate during that period.

Income-producing machines

Investing in high-quality, high-yielding dividend stocks, such as Oneok, Verizon, and Vici Properties, is a great way to turn idle cash into an income stream. They can generate a meaningful and growing stream of dividend income, providing you with a tangible return each year.

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Matt DiLallo has positions in Verizon Communications and Vici Properties. The Motley Fool recommends Oneok, Verizon Communications, and Vici Properties. The Motley Fool has a disclosure policy.