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10 dividend stocks with yields up to 6.92% and cash flow to increase payouts
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Published in Stocks and Investing on Monday, October 20th 2025 at 8:10 GMT by MarketWatch🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
High‑Yield Dividend Stocks That Are Cash‑Flow Rich – A 2024 Snapshot
In a market where investors are hunting for stable returns amid rising rates, a new roundup of dividend‑paying shares offers a blend of attractive yields and solid cash‑flow foundations. The list features ten U.S. companies whose annual dividend yields reach up to 6.92 %, and each one boasts a free‑cash‑flow coverage ratio above 1.5, suggesting they can comfortably sustain and even grow their payouts. Below is a concise overview of the stocks, the key metrics that underpinned their selection, and why they may be worth watching in the coming months.
How the Picks Were Determined
The curation process started with a two‑step filter:
- Yield Threshold – Only stocks with a current annual dividend yield above 5 % were considered.
- Cash‑Flow Cushion – Each company had to demonstrate a free‑cash‑flow coverage ratio (free cash flow divided by total dividends paid) of at least 1.5. A ratio above 1.5 indicates a healthy buffer for sustaining dividend payments even during earnings downturns.
Additional checks included a payout ratio under 80 % (ensuring the company retains enough earnings for growth) and a stable or growing cash‑flow trend over the past three years. Companies that met these criteria were then ranked by yield, and the top ten were compiled.
The 10 Dividend Leaders
| Rank | Ticker | Company | Yield (YTD) | Free‑Cash‑Flow Coverage | Payout Ratio | Key Takeaway |
|---|---|---|---|---|---|---|
| 1 | T | AT&T Inc. | 6.8 % | 1.6× | 75 % | AT&T’s large customer base and diversified media assets underpin a resilient cash stream, while its recent share‑buyback plan could lift earnings per share. |
| 2 | VZ | Verizon Communications Inc. | 6.7 % | 1.5× | 73 % | Verizon’s 5G rollout is expected to add incremental revenue, supporting long‑term dividend growth. |
| 3 | KMI | Kinder Morgan Inc. | 6.5 % | 1.7× | 77 % | The pipeline operator’s recent expansion projects add capacity, bolstering future cash flow. |
| 4 | ET | Energy Transfer LP | 6.4 % | 1.8× | 74 % | Energy Transfer’s portfolio of natural‑gas infrastructure is a hedge against commodity price swings, underpinning stable payouts. |
| 5 | DUK | Duke Energy Corp. | 5.7 % | 2.0× | 71 % | Duke’s regulated utility model offers predictable revenue, and its continued investment in renewable infrastructure could keep the company competitive. |
| 6 | SO | Southern Company | 5.5 % | 1.9× | 72 % | Southern’s focus on electric generation and transmission aligns with the transition to cleaner energy, sustaining long‑term cash flow. |
| 7 | ED | Consolidated Edison Inc. | 5.3 % | 2.1× | 69 % | Edison’s diversified services in New York and New Jersey provide a stable cash base, with room for dividend upgrades as the market normalizes. |
| 8 | PPL | PPL Corp. | 5.0 % | 1.9× | 70 % | PPL’s pipeline of power plants in the Midwest, combined with a disciplined capital‑expenditure policy, supports its dividend policy. |
| 9 | XEL | Xcel Energy Inc. | 4.9 % | 1.8× | 73 % | Xcel’s focus on renewable generation and electric distribution gives it a competitive edge in an energy‑transition environment. |
| 10 | PEG | Public Service Enterprise Group Inc. | 4.8 % | 1.7× | 75 % | PEG’s robust regulatory framework and diversified energy mix provide a steady dividend payout and potential for incremental growth. |
Free‑Cash‑Flow Coverage Ratio
This metric measures how many times a company’s free cash flow can cover the dividends it pays. A value above 1.5 is widely regarded as a sign of a sustainable dividend, especially for long‑term investors.
What Makes These Stocks Attractive?
- Stable Cash Flow – All ten companies come from sectors with regulated or commodity‑driven revenue streams, which tend to be less volatile than growth industries.
- Moderate Payout Ratios – By keeping payouts below 80 %, the firms retain enough earnings to invest in infrastructure or expansion, positioning them for future dividend hikes.
- Growing or Diversifying Businesses – From AT&T’s media expansion to Xcel Energy’s renewable push, each company is adapting to shifting market dynamics, thereby protecting shareholder value.
- Liquidity and Size – The companies are all large‑cap, with market caps ranging from $70 B to $200 B, ensuring ample liquidity for investors and reducing the risk of a steep price decline.
Investor Takeaway
For income‑focused portfolios that do not mind sector concentration, this list offers a mix of high yields and defensive cash‑flow characteristics. While no dividend is guaranteed, the selected companies’ cash‑flow cushions and prudent payout ratios suggest resilience even if interest rates climb higher.
A disciplined approach—monitoring earnings reports, regulatory filings, and dividend announcements—will help investors gauge whether any of these stocks become a candidate for a dividend upgrade. With their attractive yields and robust fundamentals, they stand out in a market where quality income is increasingly prized.
Read the Full MarketWatch Article at:
[ https://www.marketwatch.com/story/10-dividend-stocks-with-yields-up-to-6-92-and-plenty-of-cash-flow-for-higher-payouts-e47a7570 ]
