2024-08-03 05:40:00 ET
Higher interest rates have been a passive income investor's dream scenario. Even lower-risk fixed-income investments like government bonds and bank CDs offer high yields these days . Because of that, equity investments, which are riskier by nature, have to offer even higher yields to entice income-seeking investors.
For example, several high-quality yield-focused master limited partnerships (MLPs) currently pay around 8%. Because of that, a $1,000 investment could generate around $80 of annual passive income. Energy Transfer (NYSE: ET) and MPLX (NYSE: MPLX) are two great options for income-seeking investors.
Energy Transfer's distribution currently yields right around 8%. That's several times higher than the average stock (the S&P 500's dividend yield is 1.3%). Higher-yielding dividend stocks are often at higher risk of a reduction, but that's unlikely in Energy Transfer's case. Instead, the pipeline company plans to increase its payout by 3% to 5% annually.
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Got $1,000? These High-Yield Dividend Stocks Could Turn It Into Nearly $80 of Annual Passive Income.