Investing $3,000 Into These 3 Ultra-High-Yielding Dividend Stocks Could Generate Hundreds of Dollars in Annual Passive Income
Ares' growing portfolio has enabled it to pay a stable or growing dividend for over 16 consecutive years. The company currently generates earnings in excess of its dividend, providing a sustainable foundation for its hefty payout.
Western Midstream Partners
Western Midstream Partners is a master limited partnership (MLP), an entity that sends a Schedule K-1 Federal tax form each year. The company operates energy midstream assets, including pipelines and processing plants, to support oil and gas production. Most of its assets operate under long-term, fixed-rate contracts, providing it with stable cash flows.
The MLP generated enough cash flow last year to cover its distribution and the capital expenditures to maintain and expand its midstream assets with $95 million to spare. That excess free cash flow enhanced its financial flexibility. It used some of its financial capacity to acquire Aris Water Solutions.
Western Midstream plans to invest up to $1 billion in capital expenditures this year. Its growth-related spending will help grow its cash flow in the future. That should support continued distribution increases. Western Midstream raised its distribution by 4% last year and plans to increase it by another 2.2% in 2026, aligning with its target of delivering low-to-mid single-digit annual distribution growth.
Big-time income stocks
AGNC Investment, Ares Capital, and Western Midstream have huge dividend yields. They all have solid records of at least maintaining their dividend payments in recent years, which should continue as long as there isn't a meaningful market disruption. That makes them enticing options for those seeking to turn $3,000 into hundreds of dollars in annual passive income.
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Matt DiLallo has positions in Ares Capital. The Motley Fool has positions in and recommends Ares Capital. The Motley Fool has a disclosure policy.
Investing $3,000 Into These 3 Ultra-High-Yielding Dividend Stocks Could Generate Hundreds of Dollars in Annual Passive Income was originally published by The Motley Fool
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