5 of the Safest High-Yield Dividend Stocks on the Planet

This year’s rally in the stock market has pushed the dividend yield on stocks in the S&P 500 down to a mere 1.3%. That’s its lowest level in roughly two decades.  

While there are stocks out there that offer higher yields, many require investors to take on a higher level of risk. However, there are a few high-yield dividend stocks that stand out for their relatively lower risk profiles. Here’s a closer look at five of the safest options.

AvalonBay Communities

AvalonBay Communities (NYSE:AVB) is a real estate investment trust (REIT) focused on owning apartments. The company owns thousands of apartments across 11 U.S. states. While it primarily focuses on higher-cost major cities along the coasts, it has started expanding into faster-growing inland markets across the South.  

Apartments are historically very stable investments. That allows AvalonBay to generate steady rental income to support its dividend, which currently yields 2.9%. In addition to the overall safety of the multifamily sector, AvalonBay boasts a conservative dividend payout ratio of less than 70% of its cash flow and an A-rated balance sheet. Because of that, it has ample financial flexibility to pay a sustainable dividend while growing its multifamily portfolio. 

Brookfield Renewable

Brookfield Renewable (NYSE:BEP)(NYSE:BEPC) operates a globally diversified portfolio of renewable energy-generating assets. It’s one of the largest hydroelectric producers and owns growing wind and solar energy platforms. Brookfield sells the power it produces to utilities and corporate customers under long-term, fixed-rate contracts. They generate very stable cash flow, supporting Brookfield’s 3.2%-yielding dividend.

The company complements that stable cash flow with a conservative dividend payout ratio and a strong investment-grade rated balance sheet. That gives it the financial flexibility to continue expanding. The company currently expects to grow its cash flow per share by as much as 20% per year through 2025. That should easily support its plan to increase its high-yielding dividend by 5% to 9% per year.

Brookfield Infrastructure

Brookfield Infrastructure (NYSE:BIP)(NYSE:BIPC) is the infrastructure sibling of Brookfield Renewable. It operates a globally diversified portfolio of utilities, energy midstream, transportation, and data infrastructure businesses. These businesses all generate relatively stable cash flow, backed by long-term contracts and government-regulated rates. That helps support Brookfield Infrastructure’s 3.5%-yielding dividend. 

Like its renewable sibling, Brookfield Infrastructure also has a conservative dividend payout ratio and investment-grade balance sheet. Those factors give it the financial flexibility to pay a sustainable dividend while continuing to expand its portfolio. Brookfield Infrastructure also envisions growing its dividend by 5% to 9% per year, powered by rising…