There Are 300 Ultra-High-Yield Dividend Stocks on Wall Street -- but These 2 Are Arguably the Safest of the Bunch
2026-07-16 11:06
•Sean Williams •The Motley Fool
•••••• •• Axe Capital view
Picking Safety in High-Yield Dividend Stocks: Lessons for the JSE Investor
Two US high-yield dividend stars highlight what quality income stocks should look like—lessons relevant for South African investors.
Wall Street’s 300+ ultra-high-yield dividend stocks can seem tempting, but most come with elevated risks. Enterprise Products Partners and Realty Income stand out because their cash flows are unusually steady—EPD relies on long-term fixed-fee contracts in energy, while Realty Income benefits from recession-proof retail leases with triple-net terms, meaning tenants cover most expenses. This reliability has supported decades of dividend growth. For South African investors, the lesson is clear: seek companies with predictable income streams and strong balance sheets, like Sasol in energy or Shoprite in retail, rather than chasing yield blindly. Sasol’s integrated model and global fuel demand provide relatively reliable cash flow, while Shoprite benefits from consumer staples resilience. These parallels mean local income investors should be selective, favoring companies that can maintain dividends in downturns rather than gambling on high yields alone. If the rand weakens sharply—say USD/ZAR moves above 20—it could pressure companies dependent on imported inputs. That risk tempers enthusiasm but doesn’t negate the advantage of stable dividend payers. this is just my opinion and not financial advice
I would focus on high-quality dividend payers like Sasol and Shoprite for income, avoiding cheap high-yield names without predictable cash flow. Keep an eye on USD/ZAR as currency volatility can affect costs and dividends for these companies.
- Sasol
- Shoprite
- USD/ZAR
- Rand weakness above 20 inflating input costs
- Commodity price volatility impacting Sasol's earnings
7/10
The article highlights two ultra-high-yield dividend stocks as particularly safe investments among approximately 300 stocks with yields of at least 5%. Enterprise Products Partners, a midstream energy company, offers nearly 6% yield with predictable cash flows from long-term fixed-fee contracts and has raised its payout 83 times since 1998. Realty Income, a commercial REIT, pays monthly dividends, has increased its dividend for 115 consecutive quarters, maintains a 98.9% occupancy rate, and focuses on recession-resistant retail properties.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Sean Williams
Categories: Rates, Equities, Capital Returns, Financials, Consumer, Retail
Tickers: EPD, O
Sentiment: Positive - Company is praised for delivering nearly 6% annual yield with low volatility due to predictable cash flows from long-term fixed-fee contracts. Has demonstrated 27 consecutive years of payout increases and 83 total distribution hikes since 1998, indicating strong financial stability and commitment to shareholders. Company is highlighted as the premier REIT with exceptional dividend growth track record of 115 consecutive quarterly increases and 135 total increases since 1994. Maintains industry-leading 98.9% occupancy rate, focuses on recession-resistant businesses, and uses triple-net leases to ensure predictable income with minimal landlord expenses.
Keywords: dividend stocks, high-yield investments, midstream energy, commercial real estate, REIT, dividend growth, income investing
Insights:
- EPD: Positive: Company is praised for delivering nearly 6% annual yield with low volatility due to predictable cash flows from long-term fixed-fee contracts. Has demonstrated 27 consecutive years of payout increases and 83 total distribution hikes since 1998, indicating strong financial stability and commitment to shareholders.
- O: Positive: Company is highlighted as the premier REIT with exceptional dividend growth track record of 115 consecutive quarterly increases and 135 total increases since 1994. Maintains industry-leading 98.9% occupancy rate, focuses on recession-resistant businesses, and uses triple-net leases to ensure predictable income with minimal landlord expenses.