Will there still be high yields in the US stock market in 2025? Are these 5 high-dividend stocks worth bottom-fishing?

If you’ve been watching the US stock market recently, you might notice a harsh reality: The average dividend yield of the S&P 500 is only 1.2%, hitting a 20-year low. The US stock market surged last year, stock prices went up, but dividend yields were diluted.

But here’s an opportunity — there are still a batch of undervalued high-dividend stocks in the market, with annual dividend yields exceeding 5%. For investors tired of chasing gains and selling on dips, these stable dividend-paying companies might be worth serious research.

Why High-Dividend US Stocks in 2025 Are Worth Paying Attention To

The macro environment gives us a good reason to invest in high-dividend US stocks.

In 2024, US stocks performed well, driven by the AI boom and a rate-cut cycle. What about 2025? Economic uncertainties may increase, and in such times, stable dividend income becomes especially attractive.

Looking at the data more clearly: In 2024, the earnings per share (EPS) of S&P 500 components grew by 8%, while dividends only increased by 6. What does this mean? Wall Street believes there’s still momentum. Goldman Sachs forecasts that in 2025, the EPS of S&P 500 components will grow by 11%, with dividends possibly increasing by 7%. Bank of America Securities is even more optimistic, expecting dividend growth to reach 12%.

In other words, if you lock in a batch of stable dividend-paying companies now, your future dividend income could grow more and more.

Top 5 High-Dividend US Stocks, Analyzed One by One

Based on annual dividend yield screening, I’ve selected these 5 representative high-dividend stocks. Data as of January 23, 2025.

1. Verizon (VZ) — 6.99% Telecom Giant

Verizon is the largest US telecom operator and one of the Dow Jones 30 components. Its main business covers voice calls, fixed broadband, and wireless communications, with its wireless division being the largest wireless service provider in the US.

Looking at the financials: Q4 2024 revenue was $35.7 billion, up 1.7% quarter-over-quarter, beating the expected $35.3 billion. Market cap is $166.9 billion, P/E ratio is 17.17. But the stock price has fallen 35% over the past 5 years, which creates a buying opportunity.

Bank of America maintains a Hold rating on VZ, with a target price of $45. From a dividend perspective, VZ’s appeal lies in its status as a mature telecom company with stable cash flow and a conservative but reliable dividend policy.

2. Enbridge (ENB) — 6.03% Energy Infrastructure Pipeline

Enbridge is a Canadian energy infrastructure company involved in liquid pipelines, natural gas transportation, and renewable energy sectors. Its liquid pipeline division manages crude oil and liquids transportation across North America.

The most impressive data: 22 consecutive years of dividend growth, which is quite rare among US stocks. Market cap is $97.5 billion, P/E ratio is 21.95. The stock has risen 9.85% over the past 5 years with little volatility.

Royal Bank of Canada recently raised ENB’s target price from $59 to $63, rating it as Outperform. This indicates analysts are optimistic about its 2025 performance.

3. Realty Income (O) — 5.80% Commercial REIT

Realty Income is a REIT (Real Estate Investment Trust), holding over 12,237 commercial properties, with about 236.8 million square feet of leasable area. It mainly earns rental income through long-term net leases with commercial tenants.

Q3 2024: Operating income was $3.931 billion, up 30.91% YoY; net profit was $666 million, with EPS of $0.75. Market cap is $47.253 billion, but P/E is relatively high at 51.45, indicating market premiums on its stability.

Over the past 5 years, the stock price has fallen 25.98%, but this is not unusual for REITs — they tend to distribute most profits as dividends, with limited stock price appreciation, focusing on dividend payout. Stifel analyst maintains a Buy rating with a target of $66.50.

4. Vici Properties (VICI) — 5.89% Casino Asset Owner

VICI was founded in 2016, focusing on owning and acquiring casino, hotel, and entertainment assets. It now holds 93 experiential assets, including Caesars Palace in Las Vegas and Venice Resort.

Q3 2024 results look great: revenue of $2.873 billion, up 7.2% YoY; net profit of $2.097 billion, EPS of $1.98. Market cap is $30.877 billion, with a P/E ratio of only 10.86 — the lowest among these five stocks.

The stock has risen 12.07% over 5 years with stable operations. Barclays recently initiated a Buy rating with a target of $36. Its advantage lies in the very stable cash flow from casino assets.

5. Brookfield Renewable (BEPC) — 5.60% Renewable Energy Portfolio

Brookfield Renewable owns one of the world’s largest pure renewable energy portfolios, with about 6,707 MW of installed capacity. It includes 204 hydroelectric facilities (72 river hydro plants), 28 wind farms, covering 13 electricity markets in Canada, the US, and Brazil.

Q3 2024: Revenue was $4.444 billion, up 19.62% YoY; net profit was -$197 million, EPS of -$0.83. It looks a bit bad, but renewable energy companies often have high growth, large upfront investments, and dividends rely on operating cash flow rather than net profit.

Market cap is $4.581 billion, P/E cannot be calculated (due to negative earnings). The stock price has fallen 16.23% over 5 years. JP Morgan maintains an Overweight rating with a target of $28. This stock is suitable for investors optimistic about the long-term development of clean energy.

Four Steps to Screen High-Dividend US Stocks

Don’t just follow the rankings blindly; use a systematic approach.

Step 1: Pick industry leaders
Within 1-3 industries of interest, select the leading companies. Don’t just look at dividend yield — delve into financial health, profitability, and cash flow adequacy. Leaders have the capacity to sustain dividends.

Step 2: Check 5-10 years of earnings stability
Only trust companies that can maintain relatively stable earnings through economic cycles. Enbridge’s 22 consecutive years of dividend growth exemplifies this.

Step 3: Review dividend payment history
Look at dividend records over the past few years. Choose companies with stable or increasing dividends, avoiding those with irregular or overly high payout ratios.

Step 4: Calculate and compare dividend yields
Compare dividend yields within the same industry. If a company’s yield is unusually low, analyze why — is it due to short-term difficulties or other capital needs? Don’t get attracted solely by high yields and rush in.

Final step: listen to the latest analyst ratings and target prices to avoid buying at a high.

The Real Advantages of Investing in High-Dividend US Stocks

Why choose high-dividend US stocks over chasing gains?

Stable cash returns
High dividends paid consistently over the long term bring continuous cash inflow each year. Compared to chasing quick gains, this approach is more stable.

Solid fundamentals
Many of these companies are long-established giants with proven profitability and cash flow, reducing the risk of dividend cuts.

Potential for capital appreciation
Stable dividends don’t mean stagnant stock prices. Quality companies’ stocks can rise with earnings growth, allowing you to enjoy both dividends and capital gains.

Strong risk resistance
Compared to small-cap high-growth stocks, these large, market-positioned companies are less vulnerable to market volatility.

Diversification
Allocating high-dividend stocks across traditional industries helps balance a portfolio overly concentrated in tech and growth stocks, achieving true diversification.

Risk Warning: High Dividends Also Have Pitfalls

But it’s important to clarify — high-dividend US stocks are not risk-free.

Some companies appear to have very high yields but are actually heavily indebted, with unstable profits or problematic business models. Such companies may have unstable dividends or face dividend suspension or adjustment risks.

Before investing, do your homework: review financial statements, check cash flows, and assess whether their dividend policies are sustainable. Also, honestly evaluate your risk tolerance — don’t get blinded by high yields and end up losing your principal.

High-dividend US stocks in 2025 do present opportunities, but the key is choosing the right companies, doing thorough research, and managing risks.