If generating more passive income is one of your New Year's resolutions, you have plenty of options for achieving the goal. One of the easiest is to buy high-yield dividend stocks. Investing $50,000 in each of these five stocks could make you nearly $17,500 in passive income in 2025.
1. Ares Capital
Ares Capital(NASDAQ: ARCC) is the largest publicly traded business development company (BDC). It targets a growing traditional middle market (U.S. companies with annual revenue of $100 million to $1 billion) of around $3 trillion, plus a $2.4 trillion market for companies with annual revenue of over $1 billion.
Because Ares Capital pays an ultra-high forward dividend yield of 8.67%, an investment of $50,000 in the stock would generate $4,335 this year in passive income. You could make even more money, though, if history is any guide. Ares Capital's total return has beaten the S&P 500(SNPINDEX: ^GSPC) by roughly 60% since the company's initial public offering in 2004.
2. Energy Transfer LP
Energy Transfer LP(NYSE: ET) operates over 130,000 miles of pipeline in the U.S. that transport natural gas, natural gas liquids, crude oil, and other refined products. The company also owns processing and storage facilities and terminals.
Midstream energy companies often pay juicy distributions. Energy Transfer is no exception with its forward distribution yield of 6.54%. Investing $50,000 in the midstream leader would translate to around $3,270 in passive income in 2025. Your actual amount of income could be a little higher: Energy Transfer expects to increase its distributions by 3% to 5% annually.
3. Enterprise Products Partners LP
Investors seeking passive income should like another limited partnership in the midstream energy industry. Enterprise Products Partners LP(NYSE: EPD) operates over 50,000 miles of pipeline in the U.S. Its assets also include storage facilities, natural gas processing trains, fractionators, and deep water docks.
Enterprise Products Partners' distribution yields 6.51%. An investment of $50,000 in the LP would produce around $3,255 in income this year. Again, you could receive more than that amount. Enterprise has increased its distribution for 26 consecutive years -- a streak I fully expect to continue in 2025.
4. Pfizer
Pfizer(NYSE: PFE) was founded in 1849 and has become one of the world's largest drugmakers. Its products include autoimmune disease drugs, cancer therapies, migraine therapies, vaccines, and more. Pfizer markets around a dozen products that generate annual sales of at least $1 billion.
The big pharmaceutical company's dividend ranks as one of its main draws these days, with its forward dividend yield of 6.44%. If you bought $50,000 worth of Pfizer stock, you'd rake in roughly $3,220 in dividend income this year.
5. Verizon Communications
Most investors are probably quite familiar with Verizon Communications(NYSE: VZ). It's one of the biggest telecommunications providers, serving consumers and businesses across the world.
Verizon's forward dividend yield currently stands at 6.8%. An investment of $50,000 in the telecom giant's stock would generate $3,400 in passive income in 2025. The actual amount of income received will likely be at least a little higher. Verizon increased its dividend for the 18th consecutive year in September 2024, which means the chances of the company boosting its dividend payout again later in 2025 should be very good.
Adding it all up
Adding up the passive income that should be generated by these five stocks in 2025 brings us to a total of $17,480. With even small dividend increases by some of these companies, you could receive $17,500 or more in dividend payments this year.
Keep in mind that any of these stocks could decline and offset your dividend income. It's also possible (although I don't think likely) that one or more of these companies could reduce their dividend in 2025.
Overall, Ares Capital, Energy Transfer, Enterprise Products Partners, Pfizer, and Verizon should be solid stocks to own this year for investors seeking income.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:if you invested $1,000 when we doubled down in 2009,you’d have $374,613!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,088!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $475,143!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Keith Speights has positions in Ares Capital, Energy Transfer, Enterprise Products Partners, Pfizer, and Verizon Communications. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Enterprise Products Partners and Verizon Communications. The Motley Fool has a disclosure policy.
