Interest Rates Punished These 5 High-Yield Stocks: Smart Money Is Buying the Dip Lee Jackson Thu, October 8, 2026 at 8:10 AM EDT 10 min read VZ -0.46% ^TYX +0.35% AMZN +1.42% D -0.76% EPD -0.94% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
30-year Treasury yields hitting 5.7% have hammered bond-proxy sectors, creating rare multi-year entry points in five high-yield dividend stocks.
The five stocks span utilities, midstream energy, logistics, telecom, and REITs, delivering dividend yields between 4.4% and 7.5%, all rated Buy.
When yields eventually fall, Treasury bond prices drop while these discounted dividend stocks stand to deliver outsized total returns to early buyers.
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Treasury debt yields have risen to their highest levels in more than 20 years. The 30-year Treasury bond yields a stunning 5.57%, while the benchmark 10-year note, used with other components to determine mortgage rates, has jumped to 5.20%. Fixed-income assets are now competing with risk-free U.S. sovereign debt, and for some top stocks, it's been a losing battle. Bond-proxy sectors like utilities, real estate, and consumer staples have been hit hard, and many top stocks in those sectors are being punished and trading at particularly attractive levels, with big discounts to their historical valuations.
Investors love dividend stocks because they provide dependable passive income streams and an excellent opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation. At 24/7 Wall St., we have focused on dividend stocks for 20 years because, despite the stock market's ups and downs, many people need reliable passive income streams to supplement their income from employment or other sources, such as Social Security and pensions.
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While the safety of U.S. Treasuries is appealing, when yields fall, and they eventually will, the price of those bonds will rise. Unless you are intent on holding them to maturity, you could face potential losses if you decide to sell them, or even worse, have to sell them. Plus, with inflation still sticky, much of which is due to higher energy prices, the interest paid on those bonds is ultimately lower with inflation factored in. There is no growth potential unless interest rates stay higher, and a return to the 10% rates of the early 1980s is unlikely.
We found five top companies that have been punished and offer some of the best entry points in years, providing growth and income for investors with some dry powder. All five are rated a buy by top Wall Street firms.
Dominion Energy (NYSE:D) is an integrated energy utility. It offers electricity, natural gas, and related services. Many of the Wall Street firms we cover are positive on utilities, and this company pays a strong 4.40% dividend. NextEra Energy (NYSE: NEE) is buying the company, and Dominion Energy shareholders will receive 0.8138 shares of NextEra Energy and a pro rata share of a $360 million one-time cash payment for each Dominion share they own. At current market pricing, the implied acquisition premium for Dominion Energy shareholders in the merger with NextEra Energy is about 2.87%.
Dominion Energy operates through four segments:
The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.
The Gas Distribution segment engages in
This segment serves residential, commercial, and industrial customers.
The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.
Dominion serves approximately 7 million customers, and its portfolio of assets includes approximately:
TD Cowen has a Buy rating and an $80 target price.
This top midstream giant is an American midstream natural gas and crude oil pipeline company headquartered in Houston, Texas. Enterprise Products Partners (NYSE: EPD) is one of the largest publicly traded energy partnerships and pays a very reliable 5.92% dividend.
The company's debt-to-EBITDA ratio ranges from 3.1x to 3.4x, which is moderate for a midstream energy company, and its interest coverage ratio is 5x. Enterprise Products Partners generates strong free cash flow, with operating cash flow of about $8.8 billion, resulting in about $4.2 billion in free cash flow annually after deducting capital expenditures.
Another significant benefit for shareholders is that most corporate debt is fixed-rate, limiting the risk of rising interest rates. Capital-intensive buildouts face higher financing costs, but fixed-rate structures make this less of an issue.
Enterprise Products Partners provides a range of midstream energy services, including:
Transporting and storing natural gas, natural gas liquids (NGL), and fractionation
The company has four reportable business segments:
One reason many analysts like the stock might be its distribution coverage ratio. The company's coverage ratio is well above 1x, making it relatively less risky among the MLPs.
UBS has a Buy rating with a $45 target price.
United Parcel Service (NYSE:UPS) announced last year that it would cut its shipping volume for e-commerce giant Amazon.com (NASDAQ:AMZN) by more than 50% by the second half of 2026, and it is one of the best ideas among the top dividend picks, with a dividend yield now at 6.98%. The package delivery giant faced headwinds from discontinuing its Amazon business and expectations of slower economic growth. The company said the move is part of a broader strategy to focus on more profitable, less risky business segments. UPS provides integrated logistics solutions for customers in more than 200 countries and territories.
While UPS has never trimmed its dividend since listing in 1999, that track record offers reassurance rather than a guarantee—growth may pause, but a cut remains off the table for now.
Its U.S. Domestic Package segment offers a range of domestic air and ground package transportation services within the United States. Its air portfolio offers time-definite, same-day, next-day, two-day, and three-day delivery alternatives, as well as air cargo services. The ground network enables customers to ship using its day-definite ground service. UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments.
The International Package segment comprises its small package operations in Europe, the Indian subcontinent, the Middle East and Africa, Canada, Latin America, and Asia. It offers a selection of guaranteed day- and time-definite international shipping services. Its supply chain solutions include forwarding, logistics, and other services.
Bernstein has a Buy rating and a $133 target price.
Verizon Communications (NYSE:VZ) is an American multinational telecommunications company that continues to offer tremendous value. It trades at 9.13 times its estimated 2026 earnings and pays a 5.91% dividend. Verizon provides communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.
Verizon's trailing 12-month interest coverage ratio is 4.6× to 5×, providing ample cushion for dividend payments. With a very predictable revenue stream from telecom services, the company has less exposure to commodity cycles. In addition, its scale helps with financing and absorbing shocks. Public reports indicate that management has increased the dividend for 20 consecutive years and expects at least $21.5 billion in free cash flow this year. While higher debt refinancing costs have weighed down capital-intensive telecom operations, Verizon offers strong, steady cash flow.
It operates in two segments. The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements. It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:
The segment also offers wireline services in the Mid-Atlantic and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.
The Business segment provides wireless and wireline communications services and products, including:
Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.
TD Cowen has a Buy rating with a $56 target price.
VICI Properties (NYSE: VICI) is a New York City-based real estate investment trust that specializes in casino and entertainment properties. It offers a stellar dividend yield of 7.51% and is one of Wall Street's top picks in the net lease group. It is ideal for more conservative investors seeking gaming exposure and a substantial dividend.
The stock is frequently flagged, alongside other stocks in this post, in dividend screens as a "safer" S&P 500 dividend dog with an attractive yield backed by long-term triple-net leases. With rising capitalization rates and sector-wide REIT selloffs, investors buying the dip could achieve significant total returns.
VICI Properties has one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations, including three iconic entertainment facilities on the Las Vegas Strip:
VICI Properties owns 93 experiential assets across a geographically diverse portfolio of 54 gaming properties and 39 other experiential properties across the United States and Canada. The portfolio comprises about 127 million square feet and includes about 60,300 hotel rooms, plus over 500 restaurants, bars, nightclubs, and sportsbooks. Gaming revenue has proven remarkably resilient in recent downturns, and its triple-net lease structure means VICI collects rent regardless of swings in tenant profitability.
VICI Properties has a growing array of real estate and financing partnerships with leading operators in other experiential sectors, including:
VICI Properties also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.
Barclays has an Overweight rating with a $31 price objective.
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