7 High-Dividend Stocks to Buy for a Lifetime of Passive Income

As investors, we always strive to build a well-balanced portfolio that can provide stability through various economic cycles. While high-flying growth stocks generate all the hype these days (and deservedly so), defensive dividend stocks remain essential to provide a steady stream of income, as well as stability. That’s particularly true when markets become volatile. And let’s face it, with inflation proving stickier than hoped and various global tensions simmering, we could see increased volatility ahead.

But this doesn’t have to derail our portfolios if we hold the right mix of stocks. Even in turbulent times, plenty of stalwart, cash-rich companies with established track records have kept increasing their dividends year after year. I’m talking about the Dividend Aristocrats, and other S-tier stocks that represent some of the most reliable long-term holds out there. These are the types of stocks you can confidently buy and forget about, all while your dividend distributions roll in.

I’ll highlight seven generous dividend stocks perfectly suited for building a lifetime of passive income. Additionally, I’ll explore some lesser-known names throwing off juicy yields and a few dividend stalwarts you likely already know. This also includes some undervalued dividend stocks you can snap up for a bargain after their selloffs. Let’s start!

Public Storage (PSA)

At first glance, Public Storage (NYSE:PSA) may appear like a risky option in the world of real estate investment trusts (REITs). However, this self-storage stalwart operates with far less volatility than most commercial or residential real estate funds. Demand for storage has grown steadily amid a booming U.S. economy and population growth. Physical storage needs will only intensify in the coming decades as more blue-collar sectors thrive.

Public Storage is perfectly positioned to capitalize as a leading storage provider. Shares have declined 40% from their peak, creating substantial upside from the stock’s current $269 price tag. The company’s generous 4.5% dividend yield also leaves income potential. Payouts should continue rising, given impressive profitability and growth trends. Thus, Public Storage represents a relatively safe, growing business that is undeserving of its selloff. The predictable nature of self-storage stands out against a turbulent real estate backdrop. Steady demand and pricing power should continue driving predictable cash flows. Therefore, the bottom appears to be in for this dividend stalwart.

Innovative Industrial Properties (IIPR)

Like Public Storage, Innovative Industrial Properties’ (NYSE:IIPR) cannabis-linked real estate focus makes it appear riskier than typical REITs. However, leasing industrial space to pot growers somewhat insulates IIPR from traditional property market swings. Highly volatile cannabis stocks dominate the headlines, but IIPR’s indirect approach looks opportunistic after its 75% plunge.

The REIT’s jaw-dropping yield says markets expect tenants to miss rent payments. But the trust’s substantial collection rate and rising payouts signal otherwise. While challenges exist industrywide, top multi-state operators seem to be on solid enough ground to easily cover rent. Preferred access to specialized growing facilities also gives tenants a major incentive to pay IIPR before other expenses.

Ultimately, fears around this stock appear to be overblown, given reasonable rent coverage ratios for most tenants. Providing an 8.25% yield effectively compensates investors for the risk they’re taking. Accordingly, from my perspective, this stock’s return profile looks very attractive for long-term, income-focused investors.

AT&T (T)

AT&T (NYSE:T) seems poised for a long-awaited breakout after years of declines. While the telecom giant has constantly frustrated shareholders with drama and distractions, improving wireless and fiber trends signal a coming wave of growth and value creation. Trading at less than 7-times earnings, I believe T stock pricing largely reflects the negatives rather than enormous untapped potential.

The company’s generous 6.5% dividend yield adds stability for patient investors until catalysts gain traction. AT&T continues expanding its next-generation 5G and fiber networks to meet surging data demand. As those capital-intensive investments moderate, cash generation may explode higher. The company also expects to achieve $2 billion in cost savings within three years.

I believe AT&T makes for an ideal recovery and turnaround candidate at current levels. Management aims to pay down debt and return excess cash to shareholders once it hits target leverage ratios. With wireless competition easing and years of underperformance baked in, this telecom titan is positioned to deliver sustained capital appreciation alongside a rock-solid dividend.

Watsco (WSO)

Watsco’s (NYSE:WSO) modest 2.5% dividend yield seems relatively low at first glance. However, in my view, the stock remains a compelling buy based on its standout capital appreciation potential. Watsco has emerged as one of the strongest performers across the entire market, with WSO stock surging 55% this year. Strength is owed partly to the record summer heat, which drove demand for air conditioning products.

Looking ahead, climate change trends point towards sustaining tailwinds regardless of one’s views. Analysts also forecast healthy, accelerating long-term growth for Watsco’s niche AC distribution business. Thus, I believe the company’s modest starting yield could grow into a significant income stream when combined with an ongoing upside in stock prices. Of course, risks exist, but WSO seems poised to continue capitalizing on natural tailwinds from rising temperatures.

Watsco’s dividend growth and stock appreciation potential make it well worth holding for the long-run.

AbbVie (ABBV)

As one of the pharmaceutical sector’s largest players, AbbVie (NYSE:ABBV) provides immense dividend reliability. Unlike more speculative names listed here, this stock prioritizes dividends over capital gains. After all, few industries boast cash flow consistency comparable to biopharma companies with diverse drug portfolios. Even with the U.S. Humira patent expiration in play, AbbVie has only strengthened its cash generation capabilities.

With its high 4.3% forward yield and Dividend King status, AbbVie seems poised to deliver years of payout growth ahead. Healthcare tends to endure recessions better than other sectors as well. Therefore, while the upside appears limited, I believe AbbVie remains a low-volatility, high-yield pick suitable for nearly any dividend-focused portfolio. AbbVie looks like an ideal pick for income and stability. The days of sky-high growth may have passed, but strong and growing dividends seem highly sustainable for long-term investors.

Enterprise Products Partners (EPD)

No energy stock provides immunity from oil and gas volatility, as recent years have repeatedly proven. Nonetheless, Enterprise Products Partners (NYSE:EPD) is slowly recovering to pre-pandemic valuation levels. Enterprise Products has delivered slow but steady share price progress since initial 2020 lows. And with revenue basically doubling from 2020 to 2022, the company’s operating business shows momentum that looks sustainable as well. Despite a projected 2023 revenue pullback, analysts’ models see top-line growth resuming in 2024 and beyond as higher oil prices persist.

EPD stock features a 7.5% dividend yield, which also leads its midstream peer group. With 26 consecutive annual payout hikes, the company clearly prioritizes dividend distributions through ups and downs. Ultimately, Enterprise Products’ combination of cash flow consistency, yield magnitude, and conservative operations warrant income investor consideration. In my view, Enterprise Products Partners remains a rock-solid midstream pick as energy markets stabilize.

Tyson Foods (TSN)

Like many food producers, Tyson Foods (NYSE:TSN) has battled agricultural commodity volatility in recent years. Following a surge in meat and poultry prices, the company now contends with falling prices and resulting profit pressures. However, with shares having priced in the deceleration of earnings, Tyson seems poised to provide some nice upside as demand recovers.

The company’s valuation also looks highly attractive, with Tyson’s forward price-earnings ratio sitting below 12-times. Tyson also pays 4% dividend yield after 12 consecutive annual hikes, providing income as investors wait. So, while macro uncertainty lingers, I believe the stock’s risk/reward profile skews positively for long-term investors right now. Tyson boasts a diversified protein portfolio, economies of scale, and agora-food demand tailwinds that should ultimately drive a rebound over time.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.