Build Stability and Income With 3 Overlooked Dividend Leaders

Key Points

• Dividend investing is not just about seeking out high yields, often with prohibitive payout ratios, but also about balancing risks and the potential for passive income and growth.
• Three firms with sky-high yields and potentially risky payout ratios may appeal to investors with a higher risk tolerance.
• This list includes two midstream energy firms and a delivery and logistics firm, often overlooked as a dividend player.

Dividend investing is one of the most popular strategies among retail investors seeking a combination of stability and passive income. A long-term buy-and-hold approach for stalwart dividend players like The Coca-Cola Co. NYSE: KO or Johnson & Johnson NYSE: JNJ rewards patience and a commitment to reinvesting payouts over time.

Many investors seek dividend yields in the 2-3% range and dividend payout ratios below about 80%, taking these as indicators of a company's ability to continue paying dividends sustainably for an extended period of time.

It's also possible to seek a slightly more aggressive approach to dividend income in companies with higher yields and payout ratios. Of course, higher yields do not necessarily guarantee a sustainable long-term dividend income, and investors should also monitor payout ratios to ensure that any dividend targets retain enough income to maintain and grow their business.

Investors might find that the companies below strike an attractive balance of operational stability and high dividend yields.

Bargain Price on a Solid Midstream Firm With High Yield and Dividend History

Enterprise Products Partners L.P. NYSE: EPD is a midstream energy services firm with infrastructure that includes roughly 50,000 miles of pipeline. Enterprise has yet to fully recover after a share price dip in early April, alongside the Trump administration's tariff announcements. This makes for a unique buy opportunity on what many investors consider a hold-forever name.

Enterprise has about three decades of dividend distribution history to support its position as a prime dividend leader. Although the firm's payout ratio is somewhat high at 80.2%, this solid record of dividend payouts and increases should allay investor concerns.

What's more, the company's high dividend yield of 6.82% is only likely to look more attractive when the Fed lowers interest rates.

In addition to these factors, analysts see room for capital appreciation. Enterprise is expected to post earnings growth above 5% in the coming year, and nine out of 14 analysts rate EPD shares a Buy.

 At a consensus price target above $36 per share, Enterprise stock could rise by 15% or more alongside earnings improvement.

Improving Efficiency and Profits May Outweigh Payout Ratio Concerns for UPS

Like EPD above, shares of logistics and delivery giant United Parcel Service NYSE: UPS have been down in recent months. The stock fell in February and again in April 2025 and remains nearly 20% below its start to the year.

However, with improvements to operational efficiency and profit in the first quarter of the year, the company's strategy of pursuing higher-quality deliveries over all-out volume seems to be paying off.

Critically for the passive income seeker, UPS has a 16-year history of dividend increases and a high yield of 6.55%. The company's dividend payout ratio of 95.6% is elevated and may scare off some investors. However, those willing to take a risk, or those optimistic about the company's likelihood of continuing to grow its earnings, may be rewarded with substantial dividend payouts.

Fortunately, analysts believe that UPS will experience earnings growth (10.3%) in the coming quarters. The company also has upside potential of just under 20%, suggesting that capital growth may also be a factor to consider.

Another Midstream Firm With More Upside Potential

ONEOK Inc. NYSE: OKE is also a midstream energy services company. However, while Enterprise's share price has risen somewhat since plunging in early April, ONEOK's stock plateaued during the same period and is thus down more than 21% YTD.

However, the company may be able to improve its position thanks to new construction that should expand its infrastructure.

OKE shares may appeal to dividend investors because of their 5.1% dividend yield. The company's payout ratio of 80.5% is roughly equivalent to Enterprise's above. Still, the firm has a long history of stability in its dividend disbursements, thanks to its similarly stable cash flow.

Analysts are broadly optimistic about ONEOK and predict that the company's earnings could rise by more than 17% in the coming quarters. A price target of over $103 per share would imply nearly 29% in upside potential, despite the fact that only just over half of the 16 analysts rating OKE shares have assigned it a Buy.

Like both companies above, ONEOK combines a compelling dividend yield with a potentially high payout ratio and the potential for share price appreciation.