It will be over a decade before I start relying on dividend income from my stock portfolio. These days, I spend my time looking for businesses that pay juicy dividends, but it takes more than a high yield to get my attention.

I like to invest in successful businesses that offer a high yield upfront and can grow their dividend payouts over time. These three stocks stand out because they offer ultra-high yields upfront and there’s an excellent chance their payouts will continue growing steadily once I’m ready to retire.

W.P. Carey (NYSE: WPC), Pfizer (NYSE: PFE), and Verizon (NYSE: VZ) all offer dividend yields above 5% at recent prices and would do well in just about any income-seeking investor’s portfolio. Here’s how buying them now could lead to heaps of passive income for patient investors.

1. W.P. Carey

W.P. Carey is a real estate investment trust (REIT), which means it can avoid paying income taxes by distributing nearly everything it earns to shareholders as a dividend. This REIT used to lease a lot of office buildings but spun off that operation last year and lowered its dividend payout accordingly.

On Sept. 25, W.P. Carey raised its payout by 1.7% to $0.875 per share. At recent prices, it offers a juicy 5.5% yield, and its dividend program is on steadier footing than you might think.

Funds from operations (FFO) are a proxy for earnings used to evaluate REITs. During each of the past three quarters, W.P. Carey generated adjusted FFO of $1.14 per share or higher. That’s less than it reported before spinning out Net Lease Office Properties, but a lot more than it needs to meet its present dividend obligation.

Now that W.P. Carey is out of the office building business, warehouses and industrial properties are responsible for 64% of the rent it expects to receive in the year ahead. The portfolio is well diversified, with the largest tenant responsible for just 2.5% of annual base rent.

A majority of W.P. Carey’s leases don’t expire until after 2034. With annual rent increases written into those long-term leases, investors can look forward to steady gains in the decade ahead.

2. Pfizer

Shares of Pfizer have been under pressure due to rapidly contracting sales of its COVID-19 vaccine and antiviral treatment. The company has been raising its dividend every year since 2009. At recent prices, it offers a big 5.7% dividend yield.

In the first half, total revenue fell by 11% year over year, but investors can look forward to surging sales in the years ahead. If we ignore COVID-19 products and currency-exchange rates, Pfizer reported second-quarter sales that jumped 14% higher year over year.

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These days, COVID-19 products are responsible for just 3% of the company’s total revenue. Without this fierce headwind, Pfizer can probably keep raising its dividend for another 15 years. More than a dozen of its products grew second-quarter sales by 10% or better.

In addition to growing sales of drugs that are already well-established, Pfizer is launching more new treatments than any of its peers. In 2023, the company received U.S. Food and Drug Administration (FDA) approval for a record nine new drugs.

3. Verizon

Recently, Verizon announced its 18th consecutive annual dividend raise. At recent prices, it offers a 6.1% yield.

Verizon is the largest American telecommunications business by revenue. Barriers to entry are so high in this industry that it’s likely to remain one of just three companies with a nationwide 5G network.

Internet and phone subscriptions are Verizon’s main business, but it also sells a lot of smartphones. Equipment sales that are responsible for about 15% of total revenue fell by 6.1% in the first half of 2024.

Despite an equipment-sales headwind, total revenue inched forward by 0.4% in the first half. In the second quarter, broadband sales rose 12.3% year over year, which helped offset declining equipment sales.

Verizon’s broadband success could get a boost soon. The company recently unveiled a plan to acquire Frontier Communications, which has about 2.2 million fiber subscribers spread throughout 25 states. Millions of new broadband subscribers making regular monthly payments are exactly what Verizon needs to keep raising its dividend payout in the decade ahead.

Should you invest $1,000 in W.P. Carey right now?

Before you buy stock in W.P. Carey, consider this:

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

3 Ultra-High-Yield Dividend Stocks to Buy Now and Hold at Least a Decade was originally published by The Motley Fool