7 High-Yield Dividend Stocks With Rising Payouts

The payouts for these dividend stocks are hard to top.

In uncertain times for the stock market, dividend payments can be one of the few reliable sources of returns for investors. Unfortunately, some of the highest-yielding dividend stocks can be some of the most unreliable. If a dividend stock experiences a market sell-off, its yield can temporarily spike. However, if that dividend is ultimately cut, the temporarily high yield is meaningless for long-term investors. Bank of America recently compiled a list of reliable dividend stocks with at least 4 percent yields and at least 10 percent dividend growth rates over the past five years.

IBM (ticker: IBM)

IBM has struggled to demonstrate its pivot to cloud computing and artificial intelligence can generate sustainable revenue growth for long-term investors. However, while IBM's revenue growth has lagged, it has reassured its investors by committing to growing its 5.1 percent dividend. Analyst Wamsi Mohan says IBM is a dividend stock with a rare combination of cost-cutting levers, a strong balance sheet, stable margins and potential for market share gains. Mohan also says the recent acquisition of cloud leader Red Hat (RHT) will create value for investors. Bank of America has a "buy" rating and $200 price target for IBM stock.

International Paper Co. (IP)

The heyday for the paper business may have come and gone, but International Paper has rewarded its loyal investors by raising its 4.4 percent dividend yield by an average of 11.3 percent annually in the past five years. Analyst George Staphos says the market is paying too much attention to growth metrics and ignoring the value in IP stock. Company management suggested on a recent earnings call that, barring another financial crisis, its dividend is safe even during the next recession. Bank of America has a "buy" rating and $58 price target for IP stock.

ONEOK (OKE)

ONEOK is a natural gas collection, processing, storage and transportation company with an impressive 5.7 percent dividend yield and a five-year dividend growth rate of 16.4 percent. Analyst Dennis Coleman says the stock's 15 percent decline in the past six months is a buying opportunity for long-term investors given ONEOK's attractive valuation, its backlog of high-quality projects and its strong balance sheet. Unfortunately, investors will likely continue to deal with near-term volatility related to swings in commodity prices. Bank of America has a "buy" rating and $75 price target for this dividend stock.

Schlumberger Limited (SLB)

Schlumberger is the world's largest oil services company. Schlumberger investors rejoiced when West Texas Intermediate crude prices surged above $75 per barrel earlier this fall, but prices have since dropped back below $55 along with the 2019 earnings outlook for Schlumberger. However, with share price down 45 percent in the past year, analyst Chase Mulvehill says earnings risk is fully priced into the SLB stock. The stock pays a 4.8 percent dividend, which has grown 12.7 percent annually in the past five years. Bank of America has a "buy" rating and $52 price target for this stock.

Simon Property Group (SPG)

Simon Property is a real estate investment trust with ownership interest in roughly 230 retail real estate properties in the U.S. and Asia. As is typical with REITs, Simon Property has a fast-growing 4.6 percent dividend that has increased by an average of 11.7 percent over the past five years. Analyst Jeffrey Spector says Simon Property's mall properties have exposure to only 29 operating Sears locations, and the company is acting aggressively to repurpose that square footage. Bank of America has a "buy" rating and $203 stock price target.

Western Digital Corp. (WDC)

Western Digital produces hard disk drives used for data storage in servers, desktop and laptop computers and other electronic devices. Mohan says Western Digital gained share in key enterprise markets in the first half of 2018. WDC stock has taken a hit from a recent downturn in NAND flash memory pricing, but Mohan says the stock's current valuation is overly pessimistic. Western Digital has shown strong dividend growth by raising its 5 percent payout by an average of 13.7 percent annually over the past five years. Bank of America has a "buy" rating and $75 stock price target.

Weyerhaeuser Co. (WY)

Weyerhaeuser is one of the world's largest forest products companies and owns about 13 million acres of forest land. WY stock is down 30 percent in the past year, but its 5.6 percent dividend has increased by an average of 15 percent annually over the past five years. Staphos says a difficult year for lumber prices and timber fundamentals has weighed on the stock, but any improvement in demand and pricing from current levels in 2019 and beyond should help Weyerhaeuser bounce back. Bank of America has a "buy" rating and $33 price target for this dividend stock.

These high-yield dividend stocks have rising payouts.

These are seven high-yield dividend stocks with growing payouts:

-- IBM (IBM)

-- International Paper Co. (IP)

-- ONEOK (OKE)

-- Schlumberger Limited (SLB)

-- Simon Property Group (SPG)

-- Western Digital Corp. (WDC)

-- Weyerhaeuser Co. (WY)