3 Ultra-High-Yield Dividend Stocks I Don’t Plan on Ever Selling

True or false: The higher the dividend yield, the more worried you should be.

This is a tricky question, if not a trick question. With some stocks, a high dividend yield can be a cause for alarm. With other stocks, though, a high yield isn’t concerning whatsoever.

I own quite a few stocks with dividend yields of over 5%. I wouldn’t necessarily commit to owning all of them over the next 20 years. However, here are three ultra-high-yield dividend stocks I don’t plan on ever selling.

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1. Ares Capital

Ares Capital (ARCC 0.67%) is the largest publicly traded business development company (BDC). The company has invested more than $17 billion since its inception in 2004. The BDC focuses on middle-market companies with annual revenue between $10 million and $1 billion.

I really like Ares Capital’s dividend, with its forward yield of 8.63%. Even better, the company has either maintained or grown its dividend for 63 consecutive quarters — a streak that I’m confident will continue.

But I probably wouldn’t plan on never selling this stock if all that it had going for it was its juicy dividend. A key factor behind my intention to own Ares Capital over the long run is its position in a growing market. There has been a clear shift in recent years to private capital. Ares Capital targets a total addressable market of around $5.4 trillion. I think it’s easily the best BDC around, with its diversified portfolio, strong industry relationships, and rock-solid risk management.

I’m also impressed by Ares Capital’s performance. Since its initial public offering (IPO), it has delivered a cumulative total return that’s 80% higher than the S&P 500. Maybe the stock won’t be able to continue beating the market so handily going forward, but I wouldn’t bet against it.

2. Enterprise Products Partners

Enterprise Products Partners (EPD 0.22%) is a master limited partnership (MLP) that is a leader in the North American midstream energy industry. It operates more than 50,000 miles of pipeline in addition to numerous other assets.

Many MLPs pay highly attractive distributions. Enterprise Products Partners is no exception, with its forward distribution yield of 6.81%. Even better, the company has increased its distribution for 26 consecutive years.

Am I crazy to believe that I can own a stock that’s dependent on fossil fuels for years to come? I don’t think so. Sure, renewable energy sources will almost certainly be more widely used in the future. However, the demand for oil and gas (especially natural gas and natural gas liquids) should continue to grow for decades to come. That means the demand should remain strong for Enterprise Products Partners’ pipelines.

This MLP has already proved its resilience. Enterprise Products Partners delivered steady cash flow per unit during every major crisis affecting the oil and gas industry over the last two decades.

3. Verizon Communications

While you might not have heard of Ares Capital or Enterprise Products Partners, odds are that you’re quite familiar with Verizon Communications (VZ -0.09%). The telecommunications giant serves millions of customers worldwide.

Many income investors will especially like Verizon. Its forward dividend yield is a lofty 6.22%. The company has also increased its dividend for 18 consecutive years.

I’ve tried to picture a world where wireless services from companies like Verizon aren’t needed, but my imagination just isn’t that good. I also seriously doubt any new competition will arise in this market, considering the massive amount of capital required to build out wireless networks. The bottom line is that I believe Verizon has staying power.

Will Verizon be a huge growth machine? Probably not. However, 6G is on the way — probably by the end of the decade. This new higher-speed wireless protocol could hold the potential for holographic communication, immersive extended reality (think augmented reality and virtual reality at a whole new level), and more. I fully expect Verizon will be a major player in 6G and could deliver more impressive growth in the future.