You can capture these benefits through dividend-focused ETFs like the Vanguard High Dividend Yield ETF (NYSEARCA: VYM). Year to date, as of this writing, it’s outperforming the S&P 500. Since the year began, the S&P 500 is down 3%, compared to the year-to-date 3% returns of the VYM ETF. It also remains one of the best ways to trade dividend growth.  

With an expense ratio of 0.04%, the VYM ETF tracks the performance of the FTSE High Dividend Yield Index, and currently holds 562 stocks, including Broadcom (NASDAQ: AVGO), JPMorgan Chase (NYSE: JPM), Exxon Mobil (NYSE: XOM), Walmart (NASDAQ: WMT), and Johnson & Johnson (NYSE: JNJ).

The VYM ETF also carries a yield of 2.29% and pays a quarterly dividend. On December 23, 2025, it paid a dividend of just over 94 cents. On September 23, it paid out just over 84 cents. And on June 24, it paid out just over 86 cents a share.

Two other high-yield dividend stocks to consider are:

Buy-and-Hold Dividend Stocks: Realty Income

Known as “The Monthly Dividend Company,” Realty Income (NYSE: O) yields about 5%.  It also just increased in its monthly cash dividend to $0.2705 per share from $0.270 per share. The dividend is payable on April 15, 2026, to stockholders of record as of March 31, 2026. The new monthly dividend represents an annualized dividend amount of $3.246 per share as compared to the prior annualized dividend amount of $3.240 per share.

Making it even more attractive, Realty Income is one of the biggest lease real estate investment trusts (REITs) you can buy. It also owns more than 15,600 properties, with a vast majority of those in the retail sector. In fact, some of its biggest tenants include 7-Eleven, Dollar General (NYSE: DG), Walgreen’s, Wynn Resorts (NASDAQ: WYNN), FedEx (NYSE: FDX), BJ’s Wholesale Club (NYSE: BJ), CVS Health (NYSE: CVS), and Tractor Supply (NASDAQ: TSCO).

Buy-and-Hold Dividend Stocks: Verizon

With a yield of about 5.6%, Verizon (NYSE: VZ) is another hot, high-yielding dividend stock to buy and forget about for a while. It also declared a dividend of $0.7075, a 2.5% increase from its prior dividend of $0.69. It’s payable on May 1 to shareholders of record as of April 10.

Recent earnings and guidance were also solid. For the fourth quarter, EPS of $1.09 beat by three cents. Revenue of $36.4 billion, up 2.4% year over year, beat by $200 million. In the quarter, the company also saw total postpaid phone net additions of 616,000, up 22% and ahead of estimates of 420,491. For 2026, Verizon expects total retail postpaid phone net additions of 750,000 to a million and adjusted EPS of $4.90 to $4.95, or growth of 4% to 5%.

Analysts at Raymond James raised their price target on Verizon to $56 from $50, maintaining an outperform rating. Analysts at Scotiabank also upgraded Verizon to sector outperform from sector perform, with a price target of $54.50 per share, up from $50.25, citing cost-cutting.

Avoiding Yield Traps While Locking in Reliable Income

High yields can be attractive, but not all dividends are safe. Some dividend stocks become yield traps when prices fall on weak outlooks. That’s why quality matters just as much as yield.

Funds like VYM focus on financially sound dividend payers. Likewise, Realty Income and Verizon offer durable cash flows. Both companies support payouts with stable, predictable business models.

This balance helps investors avoid chasing unsustainable income.
Instead, they can focus on consistency and long-term returns. In volatile markets, that approach can make a critical difference. Reliable dividends plus stability often outperform over time. For investors seeking income and downside protection, these dividend stocks stand out as smart, disciplined choices.

The issue is that growth is slowing. The same is true of membership growth, although that’s a trickier issue. In Costo’s first quarter 2026 earnings report, the company announced a 400,000 sequential increase in membership. However, that’s down sharply from the last few years in which Costco has delivered quarterly membership growth of over one million in several quarters. 

Of perhaps greater concern was a 10 basis points (0.10%) decrease in the company’s renewal rate, which still came in at 92.2% in the United States and Canada and 89.7% worldwide.  

In response to that metric, Costco said the decline was largely due to a greater prevalence of new members signing up online, who renew at a slightly lower rate than those who sign up at a warehouse location.  

This creates an interesting question for investors. Is COST stock a buy-the-dip opportunity, or are investors beginning to see evidence that the economy is putting a strain on the company’s loyal customer base. 

History is On the Side of the Bulls 

It’s safe to say that 2025 is an outlier for COST stock. Over any meaningful time period, the stock has delivered a total return that exceeds the broader market. In fact, over the last 15 years, COST stock has delivered a total return of over 1,800%.  

There’s also the company’s balance sheet. At the end of the quarter, Costco was sitting on a cash balance of $16.2 billion. That’s an increase of over 15% YoY. That kind of cash pile means investors shouldn’t be concerned about Costco’s financial health. Costco’s sound financials are also evident in its growth in both net income and gross margin.  

Analyst Sentiment is Better Than it Seems 

Since Costco’s earnings report, analyst sentiment has been mixed. Many analysts have reiterated a Buy rating (or the equivalent). However, a significant number of analysts have lowered their price targets.  

The most bearish call came from Roth Capital, which gave COST stock a rare Sell rating with a price target of $769, down from $906. The firm cited the weaker membership trends noted above and steeper competition as two reasons for its opinion.  

More interestingly, it cited the greater caution around starting a family. I’ll admit that could be a longer-term threat. However, it would also be an issue for Walmart (NYSE: WMT) and BJ’s Wholesale (NYSE: BJ) both of which are committing to building out more stores.  

These are legitimate concerns. But they don’t account for the fact that although many analysts are lowering their targets for COST stock, the new targets are significantly above the stock’s current price. Not to mention, the consensus stock price is about 15% above the stock’s closing price on December 19.  

Two Other Reasons to Buy COST Stock 

First, investors get a solid dividend that needs to be put into context. At first glance, some investors might scoff at the 0.67% dividend yield. But the proof is in the payout and the growth of that payout.  

Costco stock pays out $5.20 per share on an annual basis. The company has increased that dividend for 22 consecutive years, and it has a payout ratio of 27.85%, which means the dividend is safe and well supported given the company’s massive cash position.  

Plus, investors may get a special dividend. One reason that COST stock dropped after its earnings report was that the company declined to confirm if a special dividend would be forthcoming. However, many analysts believe that Costco will announce one before the end of the year as they did in both 2020 and 2023.  

Second, although the stock has dropped from the $1,000 price it made earlier this year, it still has to be considered a candidate for a stock split. The company hasn’t split its stock since 2000 and has indicated that it has no intention of a split at this time.  

But opinions change. If Costco management believes that the stock price is prohibitive for retail investors, it could take the step to spark demand.  

The Bottom Line: Know What You Own 

Let’s look at a “worst-case” scenario. If you believe the report from Roth Capital, then COST stock could have another 10% to fall.  

However, over the long term, I’d say so what? If you’re looking at Costco as a long-term position in your portfolio, then the stock is giving you a buying opportunity today, and it could be an even better buying opportunity at a lower price.  

Keep in mind that even at 42x earnings, the stock still trades at a discount to its historical average. COST stock has earned the right to have a high valuation.  

The biggest issues facing Costco are macroeconomic in nature. That’s not to say they’re not significant. However, until there’s evidence that the company’s membership is declining as opposed to slower growth, it’s hard to bet against the stock’s history.