Why I Bought More Top High-Yield Dividend Stocks  

I'm seeking financial freedom. Growth of passive revenue streams is important to my plan. I'm trying to earn enough to cover my bills. Despite my long distance to go, I'm making progress. I'm accomplishing so by investing in high-quality dividend stocks with rising dividends. I recently bought more Chevron (NYSE: CVX), Realty Income (NYSE: O), and Verizon (NYSE: VZ) shares. This is why I think they'll help me achieve financial freedom.

Elite dividend stock Chevron. The oil behemoth has raised payouts for 37 years. Over the past five years, it has grown its dividend faster than the S&P 500 and twice as fast as its nearest competitor. Its latest increase was 8%.

Chevron's 4.2% dividend can grow, I'm sure. The corporation has prioritized high-return investments in recent years. That supports its belief that it can boost free cash flow per share by over 10% annually through 2027. We expect oil to average $60 per barrel. The oil company might use the funds to invest in high-return expansion projects, raise its dividend, and repurchase shares at the low end of its $10 billion-$20 billion target range.

At higher crude prices (above $80 a barrel), Chevron might increase its free cash flow faster. In a $60 billion deal, it will acquire Hess. Its growth prognosis would improve with that acquisition throughout the 2030s. Chevron expects to treble its free cash flow by 2027 at $70 oil if it acquires Hess. These elements should provide Chevron enough fuel to maintain and raise its high dividend.

For years, Realty Income has lived up to its moniker. REIT investors have received stable dividends. Since its 1994 public-market offering, its monthly dividend has raised 124 times, including 106 straight quarters. It increased payout by 4.3% annually.

REIT may easily enhance its 6% high-yielding payment. It wants to increase adjusted FFO per share by 4% to 5% annually. The main expansion driver is acquisitions. Buying and developing income-producing real estate costs Realty Income billions annually. Due to its conservative dividend payout ratio (75% of adjusted FFO) and strong balance sheet, the company can fund new deals.

Realty Income offers huge growth potential. It could buy $13.9 trillion in U.S. and European homes. By entering data centers, gaming, and more European countries, it has extended its runway. Verizon pays huge dividends. The telecom behemoth yields 6.7%. This large payout is becoming more stable.

The firm earns enormous cash. In 2023, its $37.5 billion cash flow from operations covered $18.8 billion in capital expenditures and $11 billion in dividends. That created excess free cash to improve its investment-grade balance sheet.

Verizon should maintain high free cash flow. Revenue and cash flow should improve due to its heavy investment in 5G infrastructure. Capital spending is falling ($17–17.5 billion in 2024). The telecom aims to slash $2 billion to $3 billion in operating costs by 2025 and reduce interest expenditures as it repays debt. Verizon has raised its dividend for 17 years, and these triggers should boost its free cash flow.

Chevron, Realty Income, and Verizon satisfy me. Two major advantages are higher dividend yields that should rise. I acquired extra shares because of that. Since passive income will help me achieve financial freedom, I plan to keep adding to these holdings.

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