Investing in stocks of strong companies that offer unusually high yields relative to their dividend-paying history can help you populate your portfolio with winners. Here are two dividend stocks that are paying their highest yield in years. You might want to give them added consideration. Here’s why.

1. Nike

Right now, investors have the opportunity to buy shares of one of the most iconic brands in the world while they trade at a discount. Sports apparel conglomerate Nike (NYSE: NKE) generates $50 billion in annual revenue making it, among other things, the global leader in footwear. But Nike’s stock price has fallen 54% from its previous peak over weak consumer spending. The lower share price pushed Nike’s forward dividend yield up to an above-average 1.83% based on a current quarterly per-share payout of $0.37 — the highest yield since 2009.

It’s a challenging year for Nike. Sales fell by double-digit rates year-over-year in the most recent quarter. However, Nike continues to remain profitable while management implements a new strategy to turn sales around. Its current quarterly dividend is about half its quarterly earnings, which gives the company a cushion to sustain dividends even during a challenging retail environment.

Nike recently hired former company veteran Elliott Hill as its new CEO. The hire has the company’s teams upbeat about the future, which is a great sign. While a return to growth is expected to take some time, Hill’s experience in leading the company’s commercial and marketing operations for Nike and Jordan Brand across four geographies should be valuable in engineering a turnaround.

Nike is in the process of shifting its product portfolio away from lifestyle products to a focus on sports, which is the heart of the brand. The company has already seen early progress, with growth across men’s fitness, global football, and running footwear in the fiscal first quarter of 2025.

With the global athletic wear market expected to keep growing to $293 billion by 2029, according to Statista, investing in Nike should pay off with good returns and many years of passive income.

2. Verizon Communications

The leading telecom operators make great dividend investments thanks to their recurring revenue streams from wireless and broadband subscribers. Verizon Communications (NYSE: VZ) reported healthy increases in postpaid phone net additions recently that sent the stock up 16% this year, but the shares still offer a high forward dividend yield of 6.16% — Verizon’s highest yield in over a decade.

The concerns Wall Street had about telecom growth amid the macroeconomic challenges this year were muted last quarter. Verizon reported a solid 12% year-over-year increase in consumer postpaid phone net additions, which refers to those customers who pay for their wireless plan with a monthly charge. Verizon could be well positioned to ride the coattails of Apple as it launches new artificial intelligence (AI)-optimized iPhones that are expected to drive strong sales.

The secret to Verizon’s growth strategy is that it offers attractive add-on services to win customers to its wireless service, including deals on subscriptions to top digital entertainment services. These compelling add-ons will be valuable tools in retaining customers and driving strong financial results to support the dividend.

Verizon has paid a dividend every year for 40 years, including all the companies that were merged over the years to create what is today Verizon Communications. The current per-share quarterly dividend is $0.6775, representing a payout ratio of 60% based on adjusted earnings guidance for 2024. With strong demand expected for AI-enabled smartphones over the next several years, buying Verizon shares at their current high yield should lead to excellent returns for investors.

Should you invest $1,000 in Nike right now?

Before you buy stock in Nike, consider this:

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Nike. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

2 Dividend Stocks to Double Up on Right Now was originally published by The Motley Fool