Investors love dividend stocks, especially high-yield varieties, because they offer a significant income stream and have substantial total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. If you purchase a stock at $20 that pays a 3% dividend ($0.60 per share) and the price rises to $22 in a year, your total return is ($22 + $0.60 – $20) / $20 = 13%. This combines the price appreciation and the dividend received. If the Federal Reserve starts to lower interest rates later this year, four of our favorite high-yield dividend stocks could explode higher.
The Federal Reserve’s decision on whether to lower interest rates in September 2025 remains uncertain, as it always does, and depends on economic data, particularly inflation and employment trends. Current sources indicate the Fed, which has held the federal funds rate steady at 4.25% to 4.50% since December 2024, reflecting caution due to “somewhat elevated” inflation (2.3% headline, 2.6% core in April 2025) and a resilient labor market (unemployment at 4.2%).
Current Wall Street sentiment and multiple analyst projections suggest a possibility of a rate cut in September. The CME FedWatch Tool currently indicates a 60% probability of a 25-basis-point cut at the September 17 meeting, with some expecting another cut in October or December, potentially bringing the rate to 3.75% to 4.00% by year-end. A 50-basis-point cut rate could be huge for quality high-yield dividend stocks.
We screened our 24/7 Wall St. high-yield dividend stock research database, looking for companies that offer reasonable entry points and could get a big boost from the Federal Reserve lowering rates later this year. All are Buy-rated at top firms that we cover on Wall Street.
Why do we cover high-yield dividend stocks?
Dividend stocks offer investors a reliable source of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
Altria
This is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. Up a very strong 14% in 2025, this stock offers value investors a great entry point. Altria Group Inc. (NYSE: MO | MO Price Prediction) manufactures and sells smokable and oral tobacco products in the United States.
The company provides cigarettes primarily under the Marlboro brand, as well as:
- Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
- Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
- on! Oral nicotine pouches
- e-vapor products under the NJOY ACE brand
It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.
Altria used to own over 10% of Anheuser-Busch InBev N.V. (NYSE: BUD), the world’s largest brewer. Last year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.
Earlier this year, Altria increased its quarterly dividend by 4.1%, from $0.98 to $1.02 per share, marking its 59th dividend increase in the past 55 years.
Enterprise Products Partners
Enterprise Products Partners L.P. (NYSE: EPD) is an American midstream natural gas and crude oil pipeline company with its headquarters in Houston, Texas. This company is one of the largest publicly traded energy partnerships, paying a very reliable dividend. Enterprise Products Partners provides various midstream energy services, including:
- Gathering
- Processing
- Transporting and storing natural gas, natural gas liquids (NGL), and fractionation
- Import and export terminalling
- Offshore production platform services
The company has four reportable business segments:
- Natural Gas Pipelines and Services
- NGL Pipelines and Services
- Petrochemical Services
- Crude Oil Pipelines and Services
One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.
Lyondell Basell
This top chemical giant has been hammered over the past year. Despite already paying a massive dividend, LyondellBasell N.V. (NYSE: LYB) just raised it yet again. This chemical company creates solutions for everyday sustainable living.
Its segments include:
- Olefins and Polyolefins-Americas (O&P-Americas)
- Olefins and Polyolefins-Europe, Asia, International (O&P-EAI)
- Intermediates and Derivatives (I&D)
- Advanced Polymer Solutions (APS)
- Refining and Technology
The O&P-Americas and O&P-EAI segments produce and market olefins and co-products, polyethylene, and polypropylene.
The I&D segment produces and markets propylene oxide (PO) and its derivatives, as well as oxyfuels and related products, and intermediate chemicals, including styrene monomer (SM) and acetyls.
The APS segment produces and markets compounds and solutions, including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors, and powders.
The Refining segment refines heavy, high-sulfur crude oil and other crude oils of various types, while the Technology segment develops and licenses chemical and polyolefin process technologies.
Verizon
This telecommunications giant has been trading sideways since late January and may be poised for a significant move higher. Verizon Communications Inc. (NYSE: VZ) is a holding company that through its subsidiaries provides to consumers, businesses, and government entities:
- Communications
- Technology
- Information and streaming products
The Consumer segment provides wireless and wireline communications services. It also provides fixed wireless access (FWA) broadband through its 5G or 4G Long Term Evolution (LTE) network portfolio.
The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video, and advanced communication services, corporate networking solutions, security and managed network services, local and long-distance voice services, and network access to deliver various Internet of Things (IoT) services and products.
Verizon provides these products and services to businesses, public sector customers, and wireless and wireline carriers across the United States, as well as a subset of these products and services to customers worldwide.
Three Top Goldman Sachs Dividend Stock Picks Have Up to 73% Upside Potential
Top Gaining Stocks
Top Losing Stocks