The search for yield could become a whole lot harder going into 2025 as the Fed signals that more interest rate reductions are ahead. As you may know, lower interest rates can act as a shot in the arm for most businesses, allowing them to pay less for funding growth projects. That said, as rates move lower and share prices rise, yields stand to become that much thinner. And if rates tank from here, high-quality, “growthy” yields may become scarce again.

In anticipation of the Fed’s first rate cut, dividends have come off considerably from their recent peaks. As such, there’s no sense in rushing into a yield-heavy play, as lower yields by this time next year are not a given.

Either way, retirees seeking to give themselves a slight raise may wish to consider their options before the impact of lower rates has a chance to hammer down yields and rates further.

Key Points About This Article

• Retirees should seek to average a 4.5-5% yield if they seek an extra $1,200 in annual income on a $25,000 investment.
• Crown Castle and Chevron shares are standout dividend bargains that still yield a generous amount.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Lower rates, lower dividend yields?

Of course, yields on dividend-paying stocks and real estate investment trusts (REITs) aren’t destined to only move lower from here. If rates fall more gradually or some sort of Fed pause is enacted, shares of some dividend stocks could slide, allowing investors to obtain more yield than is currently offered.

Given this, retirees should keep their powder dry but still strive to keep an eye out for cheap dividend deals as they come to be. Further, buying today may make sense if one has concerns about how much lower yields could fall from here or if they just want to beef up their passive income right now.

To land $1,200 in annual income on $25,000 in invested capital, one will need to average a dividend yield just shy of 5%.

Undoubtedly, averaging such a yield would have been easier at the start of the year, before the S&P 500 blasted off more than 20%, while yields on a wide range of gainers shrunk slightly. Still, some overlooked income plays out there can still help average a secure 4.5-5% yield alongside some potential share price upside.

Crown Castle: 5.4% yield

Crown Castle (NYSE:CCI) is a cell tower REIT that has shown signs of bottoming out over the past six months.

Still down close to 44% from all-time highs, CCI shares seem like a deep-value play for investors bullish on the booming demand for low-latency connectivity brought on by emerging new technologies, including edge artificial intelligence (AI) devices like the all-new iPhone 16 Pro. The company’s renewed fiber strategy is intriguing and could help the firm unlock value for investors.

With a mouthwatering 5.41% yield and plenty of promise as a top-tier 5G wireless enabler, Crown Castle is one of the high-yielders still paying out a generous amount to shareholders after losing 2% year to date. And with a potential double-bottom technical pattern that could play out into year’s end, retirees seeking an income boost would be smart to keep tabs on the name while it’s going for under $115 per share.

Chevron: 4.3% yield

Chevron (NYSE:CVX) is a big oil giant that’s cheap (14.9 times trailing price-to-earnings) and yield-heavy (4.32% dividend yield). Though Warren Buffett may have been selling his CVX shares in recent quarters, I still view the $275 billion energy colossus as one of the better dividend bargains today for risk-averse investors looking for big cash flows, generous dividends, and a respectable dividend growth profile.

After slowly sliding 19% from its late-2022 peak, CVX stock became one of the most shorted large caps in this market, at least according to Hazeltree. After sinking steadily for two years, it’s not a mystery as to why the name is so hated here. Though less timely than the likes of a Crown Castle, I do view Chevron as providing a decent value for dividend seekers who also value long-term dividend growth.

Arguably, there’s no reason to short Chevron here as it aims to return to growth while oil prices climb on the back of the crisis going on in the Middle East. All considered, shares of Chevron ought to be considered for retirees looking to pump up their passive income without having to overreach into riskier corners of the market.

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