When the Federal Reserve met in December, it threw the stock market and Wall Street a pretty big curveball when it revealed that the dot plot for interest rate cuts for 2025 had been lowered to just two cuts. Sticky inflation, the potential for implementing or increasing tariffs, and a hawkish December SEP (Summary of Economic Projections) do not bode well for continued rate cuts.

The economic policy team at BofA Securities feels that interest rate cuts could be over for this cycle. The problem is that since the global financial collapse in 2008-2009, investors and consumers have gotten used to interest rates far below the average for the past 50 years. In fact, the current effective federal funds rate is 4.33%. This is lower than the long-term average of 4.61%. The current target rate range is 4.25% to 4.50%. That could increase the chances of rate cuts being over.

If the interest rate cuts are over for now, then high-yield passive income leaders will be in big demand. According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved.

The more passive income can help cover costly and rising costs like mortgages, insurance, taxes, and other expenses, the easier it is for investors to put away money for future needs as they prepare for retirement. Dependable recurring dividends from quality, high-yield stocks are a recipe for success. We screened our 24/7 Wall St. high-yield dividend stock database, and five top companies with big and dependable dividends need to be bought now. All are rated Buy at top Wall Street firms.

Why do we cover high-yield dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

British American Tobacco

European giant, British American Tobacco PLC (NYSE: BTI), is a consumer-centric, multi-category consumer goods company that pays shareholders a big 8.15% dividend.

The company provides tobacco and nicotine products. Its segments include:

• The United States
• Asia Pacific
• Middle East
• Africa
• The Americas
• Europe

The company’s product categories include:

• Vapor
• Tobacco Heating Products (THPs),
• Modern Oral, Traditional Oral, and Combustible cigarettes.

Vapor products are handheld, battery-powered devices that heat a liquid (called an e-liquid) to produce an inhalable aerosol known as vapor. THPs are a new category of tobacco product designed to heat rather than burn tobacco.

Modern Oral products are smoke-free oral nicotine products called nicotine pouches, designed for use in the mouth. Traditional oral products include snus and snuff.

British American Tobacco brands include:

• Vuse
• glo
• Velo
• Grizzly
• Dunhill
• Kent
• Lucky Strike
• Pall Mall,
• Rothmans
• Newport
• Natural American Spirit
• Camel
• Vogue
• Viceroy
• Kool
• Peter Stuyvesant
• Craven A
• State Express 555
• Shuang Xi

Barclays has a price target set at 40 U.S. dollars and 32.50 in British pounds.

Bristol-Myers Squibb

This top company remains a solid pharmaceutical stock to own long-term, offering an outstanding entry point and a massive 4.37% dividend. Bristol-Myers Squibb Co. (NYSE: BMY) discovers, develops, licenses, manufactures, and markets pharmaceutical products worldwide.

The company offers products in:

• Hematology
• Oncology
• Cardiovascular
• Immunology therapeutic classes

Bristol-Myers Squibb products include:

• Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma
• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE
• Orencia for adult patients with active RA and psoriatic arthritis, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis

The company also provides:

• Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia
• Yervoy for the treatment of patients with unresectable or metastatic melanoma
• Abraxane, a protein-bound chemotherapy product
• Implicit for the treatment of multiple myeloma
• Reblozyl for the treatment of anemia in adult patients with beta-thalassemia

Jefferies has a Buy rating with a $70 price objective.

BXP

This quality real estate giant, formerly Boston Properties, offers size, safety, and a 5.61% dividend. BXP Inc. (NYSE: BXP) is the largest publicly traded developer, owner, and manager of premier workplaces in the United States, concentrated in six dynamic gateway markets:

• Boston
• Los Angeles
• New York
• San Francisco
• Seattle
• Washington, D.C.

Including properties owned by joint ventures, BXP’s portfolio totals 53.5 million square feet and 187 properties, including 11 properties under construction/redevelopment.

BXP’s properties include 165 office properties, 14 retail properties (including two under construction/redevelopment), seven residential properties (including two under construction), and one hotel.

The company is well known for its in-house building management expertise and responsiveness to clients’ needs.

BXP has a superior track record of developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers, and build-to-suit projects for diverse creditworthy clients.

Jefferies has a Buy rating on the shares with an $84 target price.

Hess Midstream

This is the limited partnership midstream arm of one of the country’s top energy companies, which owns 38% of the company and pays a stellar 6.86% dividend. Hess Midstream L.P. (NYSE: HESM) owns, develops, operates, and acquires midstream assets.

The company operates through three segments:

• Gathering
• Processing and Storage
• Terminating and exporting

The gathering segment owns natural gas gathering and crude oil gathering systems and produces water gathering and disposal facilities.

Its gathering system consists of approximately:

• 350 miles of high and low-pressure natural gas and natural gas liquids gathering pipelines with a capacity of about 450 million cubic feet per day
• The crude oil gathering system comprises approximately 550 miles of crude oil gathering pipelines

The Processing and Storage segment comprises:

• Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota
• 50% interest in the Little Missouri 4 gas processing plant located south of the Missouri River in McKenzie County, North Dakota
• Mentor Storage Terminal, a propane storage cavern, and rail and truck loading and unloading facility located in Mentor, Minnesota

The Terminaling and Export segment owns the Ramberg terminal facility, Tioga rail terminal, crude oil rail cars, and Johnson’s Corner Header.

UBS has a Buy rating and a $40 target price.

U.S. Bancorp

This super-regional giant offers a hefty 4.12% dividend and plenty of upside potential. U.S. Bancorp (NYSE: USB) is a financial service holding company.

The Company’s major lines of business are:

•  Wealth, Corporate, Commercial and Institutional Banking
• Consumer and Business Banking
• Payment Services
• Treasury and Corporate Support

The bank provides a range of financial services, including:

• Lending and depository services
• Cash management
• Capital markets
• Trust and investment management services

It also engages in credit card services and merchant and ATM processing.

Its banking subsidiary, U.S. Bank National Association, is engaged in banking, principally in domestic markets.

USBNA provides products and services to individuals, businesses, institutional organizations, governmental entities, and other financial institutions.

Its non-banking subsidiaries offer investment and insurance products to the company’s customers, principally within its domestic markets, and fund administration services for various mutual and other funds.

Oppenheimer has an Outperform rating with a $66 target price.

Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs

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