With an average yield of 8.51%, these high-income stocks could enhance investors’ portfolios heading into the new year.
In 2025, Wall Street reaffirmed its status as a leading wealth generator. The Dow Jones Industrial Average, S&P500, and Nasdaq Composite all experienced double-digit increases, with record highs reached multiple times.
Yet, it’s important to note that not all stocks offer the same potential. According to analysis by The Hartford Funds, holding high-quality dividend stocks can significantly boost returns for investors on Wall Street.
In their report, “The Power of Dividends: Past, Present, and Future,” The Hartford Fund, alongside Ned Davis Research, examined the performance and volatility of income stocks over a span of 51 years (1973-2024). They found dividend stocks generated more than double the average annual return compared to non-dividend-paying stocks (9.2% versus 4.31%) and exhibited considerably lower volatility than both the S&P 500 benchmark and non-paying stocks.
While income seekers generally aim for the highest annual yield with minimal risk to their principal, research indicates that ultra-high dividend stocks—those yielding more than four times the S&P 500’s yield—often come with greater risks. Thus, careful analysis is essential for investors interested in these opportunities.
The silver lining? There are appealing stocks available. Here are three ultra-high dividend stocks averaging 8.51% that may turn out to be wise investments in 2026.
SiriusXM Holdings: Yield 5.24%
First up is SiriusXM Holdings (SIRI (1.11%)), a satellite radio company often favored by the late Warren Buffett. SiriusXM currently yields over 5%.
The unique aspect of Sirius XM’s business model is its monopoly in satellite radio. While it competes with traditional radio, Sirius XM uniquely holds the satellite radio license, giving it pricing power that most online radio services can’t match.
Sirius XM’s ability to generate revenue is noteworthy. Unlike terrestrial and online competitors that heavily rely on advertising, Sirius XM derives around 20% of its sales from advertising and over 75% from subscriptions. This gives it a buffer during economic downturns, as subscribers are less likely to cancel than companies are to reduce advertising budgets.
Additionally, while costs for talent can vary, infrastructure and communication expenses typically remain stable, providing a predictable environment for growth. If the subscriber base grows over time, operating profits should follow suit.
Interestingly, SiriusXM is currently undervalued, sporting a forward price-to-earnings ratio near all-time lows, which might appeal to bargain hunters.
Enterprise Product Partners: Yield 6.84%
The next stock to consider is Enterprise Product Partners (EPD (0.16%)), a midstream energy company. It has not only raised its annual base dividend for 27 consecutive years but also yields nearly 7% and has returned $61 billion to shareholders through buybacks.
Investors tend to hesitate around energy stocks due to past volatility, especially during the COVID-19 pandemic. However, Enterprise Benefits from fixed-fee contracts, making cash flow more predictable regardless of spot price fluctuations in the oil market.
This company’s ability to foresee cash flows accurately allows it to undertake significant capital projects. With $5 billion in capital projects underway, many aimed at expanding liquid natural gas exposure, there’s strong potential for future growth.
It’s projected that spending on major projects may decrease in 2026, which—combined with lower capital expenditures—could significantly bolster cash flow and earnings.
Pennant Park Floating Rate Capital: Yield 13.44%
Finally, we have Pennant Park Floating Rate Capital (PFLT (+0.43%)), a lesser-known business development company (BDC) that boasts a monthly dividend and a notable 13.4% yield.
BDCs typically invest in small, emerging companies, and Pennant Park’s diverse portfolio includes about $2.53 billion in bonds, along with some common and preferred stocks.
Pennant Park’s advantage lies in its floating rate structure; nearly all of its loans have variable interest rates. During recent rate hikes by the Federal Reserve, this structure allowed the company to achieve impressive yields. Even as rates trend downward, it can still maintain strong returns.
Moreover, the management has effectively safeguarded investment capital, with very few companies in payment arrears—only 0.4% of the portfolio. The distribution of investments across 164 firms minimizes reliance on any single investment for profitability.
To sum up, Pennant Park’s stock is trading at a 16% discount to its book value, which is quite appealing as BDCs typically trade close to their book values.
