Want to retire early? These 5 Ultra High Yielding Dividend Stocks Can Help You

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Retirement doesn’t have to wait until you’re in your 60s; working becomes optional as soon as your passive income covers your living expenses.

Buying dividend-paying stocks, which earn so much money that they regularly give away a portion of their profits to shareholders, can eventually create a cash cascade that can free you financially.

So if you’re looking to retire as early as possible, consider these ultra-high-yielding dividend-paying stocks with strong financials to back up their big payouts.

1. AT&T: The telecom giant

Dividend yield: 5.7%

AT&T (T 2.21%) is one of the few wireless carriers in the United States. Its network supports around 67.5 million customers, who pay their monthly bills like clockwork as smartphones have become an essential part of everyday life for most of them. The company generates more than $160 billion in annual revenue and uses some of it to pay a quarterly dividend of $0.278 per share that currently pays 5.7%.

T Revenue Data (TTM) by YCharts.

You’ll see in the chart above how AT&T recently cut the dividend, following AT&T’s new spinoff of its entertainment assets to form Discovery of Warner Bros.. The lower payout also reduces the dividend payout ratio to approximately 40% of free cash flow based on management estimates. This frees up cash for AT&T to get its debt level under control and gives it the means to continue to increase the dividend in the future. This gives investors plenty of reason to expect those dividend checks to keep coming.

2. Altria: The King of Tobacco

Dividend yield: 7.9%

Altria Group (MO -0.15%) is the largest tobacco company in the United States. Its history dates back over 100 years as the owner of the best-selling Marlboro cigarette brand (at least in the United States). It is well known that fewer people smoke than in previous generations. Yet Altria has used its robust pricing power for decades to offset declining cigarette volumes with price increases. This continued profit allows it to consistently increase its dividend to the point where it qualifies as Dividend King with 52 consecutive annual dividend increases.

MO Revenue Chart (TTM).

MO Revenue (TTM) data by YCharts

Altria has separated its international activities as Philip Morris International (the owner of the Marlboro brand outside the United States) in 2008, which you can see in the chart above. Still, the company has done well since, steadily growing operating profits at a mid-single-digit pace over the past 10 years. Investors can enjoy a whopping 7.9% dividend yield covered by Altria’s 78% dividend payout ratio.

3. Enbridge: A pillar of the oil and gas pipeline

Dividend yield: 6.2%

Enbridge (IN B -1.17%) is one of the largest energy companies in North America. Its core business is pipelines, which transport oil and natural gas from Canada to the Gulf Coast. Pipelines are like toll operators on a highway; they get paid for traffic or materials that go through their pipelines, in the case of Enbridge. This has made Enbridge more stable than most oil companies because it is not as dependent on oil and gas prices to make a profit.

ENB Revenue Table (TTM).

ENB Revenue (TTM) data by YCharts.

Enbridge’s operations generate nearly $40 billion in annual revenue, and the company has paid and increased its dividend in each of the past 26 years. Investors can enjoy a 6.2% return at the current share price; the payment consumes less than 60% of Enbridge’s distributable cash flow, making the dividend (and its continued growth) sustainable.

4. AbbVie: pharmaceutical leader

Dividend yield: 4%

AbbVie (ABVV -0.62%) is a pharmaceutical company that was born during its split Abbott Laboratories in 2013. However, you can see how quickly the company has grown in nearly a decade, thanks to the massive sales of its blockbuster drug Humira, which generated more than $20 billion in 2021. Shareholders have enjoyed a 4% dividend yield, while management has increased the payout by an average of 17% per year over the past five years.

ABBV Revenue Table (TTM).

ABBV Revenue Data (TTM) by YCharts.

AbbVie’s exclusive rights to Humira in the US expire next year, which will likely slow revenue growth as competitors flood the market. AbbVie decided to develop and acquire assets that could help replace lost business. The dividend payout ratio is only 43% of cash flow, so the dividend should be able to withstand short-term turbulence if there is any.

5. Real Estate Income: The Monthly Dividend Company

Dividend yield: 4.5%

Real estate income (O 1.00%) is a real estate investment trust (REIT), a specific business structure that invests in real estate and shares its cash profits with shareholders in the form of dividends. Realty Income specializes in commercial properties; it is a net lease REIT, owning the building and charging rent to its tenants, and letting the tenants handle taxes, insurance and maintenance.

O Revenue Graph (TTM)

o Revenue Data (TTM) by YCharts

Realty Income tenants are businesses that tend to operate discounted services, making them reliable, recession-proof tenants. Realty Income properties generate steady cash flow, so much so that it pays shareholders a monthly dividend instead of the quarterly payment that’s more common among US companies. He even refers to himself as The Monthly Dividend Company. A dividend aristocrat with 28 consecutive years of annual dividend increases, investors can bring Realty Income’s 4.5% yield to the bank.

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