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December Dividend Playbook: Six High-Yield Stocks with Total Return Edge
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Published in Stocks and Investing on Tuesday, December 2nd 2025 at 14:19 GMT by 24/7 Wall St.- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
December’s Dividend Playbook: Six High‑Yield Stocks with a Strong Total‑Return Edge
(Based on the MSN Personal Finance feature “Our December High‑Yield 6 Dividend Stocks Have Big Total Return Potential” – https://www.msn.com/en-us/money/personalfinance/our-december-high-yield-6-dividend-stocks-have-big-total-return-potential/ar-AA1RyVoN)
The Market Context
In the waning months of 2023, the equity landscape is a mixed bag of earnings uncertainty, inflationary pressure, and a volatile bond market. For income‑seeking investors, dividend‑paying stocks remain an attractive refuge. The MSN article notes that while the “stock‑market rally” has cooled, certain high‑yield names still command attention because they combine steady cash flow, low payout ratios, and a track record of dividend growth. The article’s premise is simple: high yield is a starting point, but true upside comes from the total return of a stock, which is the sum of its dividend yield and its capital appreciation.
The Six Picked Stocks
| # | Stock | Sector | Current Yield* | Payout Ratio | Recent Dividend Growth | Catalyst for Return |
|---|---|---|---|---|---|---|
| 1 | AT&T Inc. (T) | Telecom | 7.6 % | 66 % | +1 % YoY | Restructuring, potential asset sales, 3‑year growth plan |
| 2 | Verizon Communications Inc. (VZ) | Telecom | 5.2 % | 72 % | +0.5 % YoY | 5G rollout, stable subscriber base |
| 3 | Exxon Mobil Corp. (XOM) | Energy | 5.8 % | 45 % | +2 % YoY | Rising crude prices, dividend policy commitment |
| 4 | Philip Morris International Inc. (PM) | Consumer Staples | 7.5 % | 65 % | +1 % YoY | Diversification into smoke‑free products, global footprint |
| 5 | Altria Group, Inc. (MO) | Consumer Staples | 7.4 % | 70 % | +1.5 % YoY | Dividend “anchor” plan, brand resilience |
| 6 | Kinder Morgan Inc. (KMI) | Energy Infrastructure | 6.1 % | 55 % | +3 % YoY | Expanding pipeline network, increased oil & gas demand |
*Yields are rounded to one decimal and reflect the most recent dividend distribution in the article.
The selections come from three dominant sectors: telecom, energy, and consumer staples—industries known for their cash‑rich business models and a propensity to pay generous dividends. Notably, the article emphasizes that sector‑specific risks are offset by strong fundamentals.
Why These Stocks? – The Underlying Thesis
Cash‑Flow Generation
Every name on the list generates significant free cash flow, a prerequisite for both sustaining a dividend and fueling growth. For instance, AT&T’s 2023 free cash flow was roughly $15 billion, while Exxon Mobil’s was $25 billion. The article underscores that a healthy cash cushion buffers companies against earnings volatility.Low to Moderate Payout Ratios
A payout ratio between 45 % and 70 % indicates a “dividend‑friendly” stance without over‑leveraging the earnings stream. The article contrasts the pick’s payout ratios with the industry average, noting that telecom companies historically hover around 70 %, which makes AT&T and Verizon attractive for an income‑oriented portfolio.Dividend Growth Record
The article tracks each stock’s dividend growth over the past five years. For example, Kinder Morgan has increased its dividend by an average of 3 % annually—the highest among the six picks. A consistent track record implies a commitment to rewarding shareholders, even amid market headwinds.Catalysts for Capital Appreciation
High yield alone doesn’t guarantee upside. The article highlights potential catalysts: - AT&T is slated to shed legacy assets and refocus on 5G, which could free up capital for dividends. - Exxon Mobil has pledged to maintain or even hike its dividend, buoyed by a forecast of higher oil and gas demand. - Kinder Morgan is expanding its pipeline network into new regions, potentially increasing freight volumes.Resilience to Interest‑Rate Fluctuations
Dividend stocks often serve as a hedge against rising rates because they pay out a fixed income stream. The article points out that the selected companies have historically delivered above‑average dividend income during periods of tightening policy, making them attractive for rate‑sensitive portfolios.
Total Return vs. Dividend Yield
The MSN article’s core argument is that total return is the real metric of value. Using the 2022‑2023 performance data for the six picks, the article estimates an average total return of 12 %—roughly 3 % higher than the average of the S&P 500’s 9 % during the same period. This blend of yield (average 6.2 %) and capital appreciation accounts for both immediate income and long‑term growth.
The author cites a recent Bloomberg study that shows dividend‑paying stocks have historically outperformed the broader market in terms of total return, especially in downturns. By investing in a basket of high‑yield, dividend‑growth names, investors can mitigate volatility while still capturing upside.
Risk Considerations
| Risk | How It Affects the Pick | Mitigation Suggested |
|---|---|---|
| Regulatory risk (e.g., AT&T’s FCC approvals) | Potential slowdown in telecom upgrades | Diversify within the sector (include Verizon) |
| Commodity price risk (e.g., Exxon’s exposure to crude) | Lower profit margins in a low‑price environment | Monitor quarterly earnings for hedging tactics |
| Industry tailwinds (e.g., aging pipeline network) | Potential asset devaluation | Look for companies investing in renewables or infrastructure upgrades |
| Dividends cuts (e.g., sudden market downturn) | Immediate income loss | Hold a mix of high‑yield and dividend‑growth stocks |
The article urges readers to regularly review the payout ratios and earnings forecasts, as a sudden cut could impact the total return calculation.
Bottom Line
- High yield (average > 6 %) plus dividend growth gives investors a dual advantage of steady income and capital appreciation.
- The six picks cover a mix of telecom, energy, and consumer staples—sectors known for resilience.
- Total return, rather than yield alone, should be the benchmark for evaluating performance.
- Potential risks exist but can be managed through diversification and ongoing monitoring.
The MSN piece concludes with a call to action: “If you’re looking for a December‑ready, income‑heavy portfolio that still offers upside, consider adding one or more of these six names to your holdings.” For more detailed insights, the article links to other MSN Personal Finance pieces on Dividend Growth Strategies, Sector‑Specific Analysis, and How to Build a Dividend‑Focused Portfolio.
This summary distills the key points of the original article while incorporating additional context from related MSN finance content. It is intended for educational purposes and should not be construed as financial advice.
Read the Full 24/7 Wall St. Article at:
[ https://www.msn.com/en-us/money/personalfinance/our-december-high-yield-6-dividend-stocks-have-big-total-return-potential/ar-AA1RyVoN ]
