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4 Top Dividend Stocks Yielding Over 4% to Buy Right Now for Passive Income | The Motley Fool

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  Published in Stocks and Investing on Tuesday, August 26th 2025 at 16:48 GMT by The Motley Fool
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Dividend‑Darlings: Four Stocks Yielding Over 4 % Worth a Look

In a market that has seen dividend yields fall to historic lows, the Motley Fool’s August 26, 2025 article “4 Top Dividend Stocks Yielding Over 4 % to Buy Right Now” points out that there are still a handful of companies that combine generous payouts with solid fundamentals. The piece offers a concise, data‑driven snapshot of each candidate and explains why these four names may be worth adding to a dividend‑focused portfolio.

1. AT &T (T) – Yield: 7 %

AT &T is perhaps the most obvious choice for investors hungry for a high yield. The wireless and broadband juggernaut boasts a current dividend yield of 7.0 %, comfortably above the 4 % benchmark set by the article’s title. The company has a long history of dividend growth – an average of 4 % per year over the past decade – and a sizable cash reserve that the authors argue provides a cushion against the company’s ongoing shift toward streaming and content creation.

Key Takeaway: The Motley Fool writers caution that AT &T carries a sizable debt load, with a debt‑to‑EBITDA ratio that could put pressure on future payouts if the company’s strategic investments don’t translate into revenue gains. Nevertheless, they argue that the stock is currently undervalued relative to peers, making it a “Buy” for income investors who are comfortable with the risk profile.

2. Kinder Morgan (KMI) – Yield: 6 %

Kinder Morgan, the largest North American energy infrastructure company, offers a 6 % dividend yield. Its business model—transporting oil, natural gas, and refined products through an expansive pipeline network—provides a stable cash flow base that the article cites as a key driver of dividend sustainability.

Key Takeaway: The Motley Fool article notes that Kinder Morgan’s dividend has grown steadily over the past five years, and the company’s payout ratio sits at a healthy 70 %, suggesting room for future increases. The primary risks highlighted are commodity price volatility and the growing push for clean energy, which could impact pipeline utilization rates. Still, the authors maintain that the company’s scale and diversified asset base justify a “Buy” recommendation.

3. Realty Income Corp. (O) – Yield: 4.6 %

Realty Income is a real‑estate investment trust (REIT) that specializes in long‑lease, single‑tenant commercial properties. Its dividend yield of 4.6 % sits just above the 4 % threshold and is backed by a portfolio of high‑quality tenants across a broad geographic spread. The article notes that Realty Income has a 97‑month average lease length and a 95 % occupancy rate, factors that lend confidence to its ongoing dividend payouts.

Key Takeaway: The Motley Fool writers applaud Realty Income’s track record of dividend growth—averaging 4.5 % annually for the last decade—and its ability to maintain a strong cash flow cushion. They caution, however, that rising interest rates could erode REIT valuations and that a potential increase in vacancy rates could impact future dividends. The overall recommendation remains a “Buy” for investors looking for a REIT with a high yield and a robust tenant base.

4. Altria Group (MO) – Yield: 8 %

Altria Group, the U.S. maker of cigarettes and smokeless products, leads the pack with an 8 % dividend yield. Despite ongoing regulatory scrutiny and a shifting consumer landscape, the company’s dividend growth history (average 6 % per year over the last decade) and large cash reserves provide a strong foundation for continued payouts.

Key Takeaway: The article underscores Altria’s high payout ratio—around 80 %—which leaves little margin for error should the company face regulatory fines or declines in sales. The Motley Fool writers advise that investors consider the social and regulatory risks associated with the tobacco industry but conclude that the company’s dividend record and liquidity position make it a “Buy” for those who prioritize yield over sector sentiment.

What Makes These Stocks Stand Out?

The Motley Fool article highlights a common thread among the four picks: dividend sustainability. Each company has a long history of dividend growth, solid cash flow, and a payout ratio that, according to the authors, indicates that the dividends are not only paid but also likely to be maintained or even increased in the future.

The authors also note that the current market environment—characterized by higher interest rates and a more volatile macroeconomic outlook—makes high‑yield stocks especially appealing. Investors can add a “safety cushion” to their portfolios by investing in companies that can withstand short‑term shocks while continuing to return capital to shareholders.

Risks to Keep in Mind

While the article is upbeat, it does not shy away from potential pitfalls:

• Debt levels (especially for AT &T and Kinder Morgan) could constrain future dividend growth if cash flow turns negative.
• Interest rate risk could depress valuations of REITs and other income‑heavy assets.
• Regulatory and consumer shifts (e.g., the decline in smoking or the shift to streaming) could impact revenue streams for companies like Altria and AT &T.

The Motley Fool writers suggest that investors should perform a personal risk assessment and consider how these risks align with their investment horizon and income needs.

Bottom Line

The article offers a concise, data‑rich recommendation list for investors who want to generate a steady income stream in a low‑yield environment. By combining a yield above 4 % with a track record of dividend growth and robust fundamentals, AT &T, Kinder Morgan, Realty Income, and Altria present a compelling case for inclusion in a dividend‑focused portfolio. As always, potential investors should read the linked company filings, analyst reports, and the Motley Fool’s deeper dives into each stock before making a final decision.