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Dividend stocks are back in focus as investors brace to face new uncertainties in 2025. JPMorgan said in its investment outlook report for 2025 that the market could face new risks if tariffs, fiscal stimulus measures and immigration-related policies under the upcoming administration lead to higher inflation.
Which dividend stocks can help you achieve a stable and reliable income this year? Let's take a look at a case study for ideas.
A few months ago, a dividend investor shared his income report and portfolio on r/Dividends, a community of income investors on Reddit with over 650,000 members. The investor said he was making $110,000 a year on his portfolio worth about $1.2 million. About half of the portfolio was allocated to money market funds and fixed income.
"Plan is to move the fixed income into dividend equities as the rates go down so the income keeps up or increases," he said.
When asked how long it took him to reach the $1.2 million figure, the investor said he'd been working for the last 20 years while his wife had been employed for 15 years.
"We both have 401ks apart from this after-tax account which we plan to leave alone for a while."
Let's take a look at some of the highest-yielding stocks in this portfolio.
BlackRock Multi-Sector Income Trust
Dividend Yield: 10.15%
The BlackRock Multi-Sector Income Trust primarily invests in fixed-income securities. It generates interest income on debt instruments such as bonds, loans and similar debt-related investments. Its distribution rate is about 10.15%.
AGNC Investment Corp
Dividend Yield: 14%
AGNC Investment Corp (AGNC) was one of the top stocks in the investor’s portfolio, earning $110,000 per year in dividends. According to Benzinga Pro, it's a mortgage REIT with a dividend yield of about 14%. The company pays monthly dividends. AGNC invests in secure agency mortgage-backed securities since Fannie Mae or Freddie Mac guarantees the MBS principal in case of defaults.
Billionaire Carl Icahn's Icahn Enterprises LP Common Stock (IEP) yields over 20%, but it's not the safest dividend stock. In November, the company cut its dividend by 50%. Billionaire Bill Ackman recently disclosed on X that he is shorting IEP as part of a stock-picking contest.
A Redditor pointed out IEP as a problematic holding in the portfolio during the discussion on the post. Here is what the investor said in response:
"I know. Painfully watched it going down from 75. One of these bad ones that I got attached to and didn't get out. Bright side is they paid decent dividends till now. Let's see how long that lasts."
Horizon Technology Finance
Dividend Yield: 14%
Horizon Technology Finance Corp (HRZN) is a business development company that lends to technology, life science and health care information and services companies. According to Benzinga Pro, HRZN has a dividend yield of about 14%.
Stellus Capital Investment
Dividend Yield: 11.6%
Stellus Capital Investment Corp (SCM) is another business development company on the list. It pays monthly dividends and yields over 11%. Stellus generates income through its portfolio of debt investments in middle-market companies.
The Cornerstone Strategic Investment Fund (CLM) seeks capital appreciation by investing in U.S. and non-U. S. companies. The fund also pays monthly distributions and yields about 16%. Apple, Microsoft, Nvidia and Alphabet are among the fund's top holdings.
Global X Nasdaq 100 Covered Call ETF
Dividend Yield: 12%
Global X Nasdaq 100 Covered Call ETF (QYLD) is a notable ETF that earns money by selling covered call options on the Nasdaq-100 Index. The fund was started in 2013 and has since paid monthly income to investors. The fund yields about 12%. Some of the top holdings of the ETF are Apple, Nvidia, Microsoft, Amazon and Broadcom.
BlackRock Floating Rate Income Strategies Fund
Dividend Yield: 11%
The BlackRock Floating Rate Income Strategies Fund invests in floating-rate loans and debt instruments. Its distribution rate is 11% and it pays monthly.
Annaly Capital Management
Dividend Yield: 13%
New York-based mortgage REIT Annaly Capital Management, Inc. (NLY) is another high-yield dividend stock in the Redditor's portfolio. The stock yields about 13%. Earlier this month, Barclays started covering the mortgage REIT's stock with an Equalweight rating. Over the past year, the stock is down 4.9%.
