5 Dividend Stocks Yielding Over 5%, Ranked By Safety
Dividend investors can find some enticing yields in the stock market these days. Realty Income (O -0.55%), Verizon (VZ -0.51%), Clorox (CLX -0.05%), VICI Properties (VICI -0.82%), and UPS (UPS -1.14%) all offer payouts exceeding 5%, potentially providing investors with a substantial stream of passive income.
However, not all high-yield dividends are the same. Some payouts are on rock-solid ground while others are much riskier. Here’s how these five stocks rank based on dividend safety from worst to first.
Image source: Getty Images.
No. 5: UPS
UPS has a strong dividend track record. The logistics giant has either maintained or increased its payment every year since going public in 1999. In its quarterly dividend press release, the company says that the “commitment to the dividend is one of UPS’s core principles and a hallmark of the company’s financial strength.” That would seem to make its current 6.5% yield (which is several times the S&P 500‘s current 1.1% yield) compelling. That’s until you dig a little deeper into its financials.
The company currently expects to generate $6.1 billion of adjusted free cash flow this year after funding $3 billion in capital expenditures. With dividend payments expected to be around $5.4 billion, that’s tight coverage. On a positive note, that’s a meaningful improvement from last year when its free cash flow didn’t cover the dividend. With UPS’ financial results showing signs of improvement, the risk of a dividend reduction is fading.
UPS – United Parcel Service
$104.88-$1.21 (-1.14%)
NYSE · As of 10:01 AM ET 10/28/26
No. 4: Clorox
Clorox has increased its dividend for 49 straight years, putting it one year shy of Dividend King status (a company with 50 or more years of annual dividend increases). That would seemingly make its 5.8%-yielding dividend attractive, especially given its business of selling leading consumer household products such as Clorox, Glad, and Purell.
However, like UPS, its underlying financial results tell a different story. The company currently pays $5.00 per share in dividends each year. In fiscal 2026, Clorox earned $4.81 per share, down from $6.52 in fiscal 2025 and below its dividend payment. Meanwhile, it generated only $405 million in free cash flow, short of the $602 million it paid in dividends (though it covered the dividend after adjusting for a $476 million payment to terminate a joint venture). On a positive note, Clorox expects its earnings to improve in fiscal 2027 while delivering strong cash flow generation. So the dividend isn’t at risk of a reduction; it’s just not as safe as you might expect from a company with its track record.
No. 3: VICI Properties
Vici Properties has increased its dividend every year since its formation in 2018. The real estate investment trust (REIT) has grown its payout at a 6.1% compound annual rate, much faster than other REITs focused on triple-net leased real estate (2.5% average growth rate). It currently yields 7.5%, one of the highest yields in the S&P 500.
VICI – Vici Properties
$23.51-$0.20 (-0.82%)
NYSE · As of 10:01 AM ET 10/28/26
The company owns a growing portfolio of market-leading gaming, hospitality, wellness, entertainment, and leisure destinations, secured by long-term net leases (average remaining term of 39.4 years). Its leases increasingly link rents to inflation (45% in 2026) and predominantly feature parent-company guarantees and master-lease protection (over 80%). Meanwhile, it pays out a conservative 75% of its stable cash flow as dividends, providing a nice cushion. The company’s biggest weakness is high tenant concentration (its two largest tenants comprise 70% of its rent), though it’s steadily diversifying.
No. 2: Verizon
Verizon has increased its dividend for 20 straight years. The telecom giant’s payout currently yields 6.6%.
Unlike those of UPS and Clorox, Verizon’s dividend is well covered by cash flow. The company has generated $18 billion in free cash flow through the first nine months of this year. That easily covered the $8.8 billion it paid in dividends, providing the company with excess cash to repurchase shares ($4 billion) and strengthen its already rock-solid balance sheet (A-/BBB+/Baa1 ratings). The reason it doesn’t rank first is that Verizon faces significant competitive pressure (including a potential new entrant in the U.S. mobile market), which could weigh on its margins and growth prospects.
VZ – Verizon Communications
$43.71-$0.23 (-0.51%)
NYSE · As of 10:00 AM ET 10/28/26
No. 1: Realty Income
Realty Income is also a REIT focused on triple-net leased real estate. However, it’s much more diversified by property type (retail, industrial, gaming, data centers, and other properties) and tenant (its top two tenants supply only 6.4% of its rent). It also has a strong balance sheet (A-rated compared to BBB-/Baa3 for Vici).
The REIT has been a stellar dividend stock. It has increased its monthly dividend 136 times since its 1994 public market listing, growing it at a 4.1% compound annual rate. It generates resilient, steadily rising cash flow and has a conservative dividend payout ratio (below 75% of its cash flow). Its combination of diversification, stable cash flow, and conservative financial profile makes it the safest dividend payer in this group.
A dividend’s safety matters more than its yield
All five of these stocks offer attractive dividend yields, but their payouts aren’t equally secure. Realty Income and VICI Properties stand out because their recurring rental income provides solid dividend coverage, while Verizon’s improving cash flow supports its generous payout. Clorox and UPS face greater challenges, with dividends consuming more cash than their businesses have recently generated. Realty Income and Verizon are the safest choices in this group for investors seeking dependable passive income.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.