Top 3 High-Yield Dividend Stocks to Invest $5,000 in 2024

Investing in the S&P 500 is often a smart move for long-term gains, but its average dividend yield of 1.4% might seem low. If you’re looking for higher dividend payouts without too much risk, consider these three stocks: CVS Health, Verizon Communications, and Village Super Market. With $5,000 to invest, these stocks could be excellent additions to your portfolio.

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1. CVS Health (NYSE: CVS)

CVS Health offers a strong dividend yield of 4.4%, which is more than triple the S&P 500 average. The stock’s higher yield is partly due to an 18% drop over the past year, caused by increased healthcare costs and lower earnings forecasts. Despite these challenges, CVS remains a solid long-term investment. It combines a pharmacy, health insurance, and pharmacy benefits management. CVS recently entered the home health market by acquiring Signify Health. The stock is currently a bargain, trading at less than 11 times its earnings, as the company works on improving its profit margins.

2. Verizon Communications (NYSE: VZ)

Verizon Communications has the highest dividend yield on this list at 6.6%. Although the stock has dropped 30% over the past three years due to rising interest rates, Verizon continues to show steady growth. The company’s wireless service revenue reached $19.8 billion recently, marking a 4% increase from last year. Verizon has consistently raised its dividend for 17 years and is now trading at a reasonable price, making it a great option for income-focused investors. As interest rates potentially decline and new AI-capable phones hit the market, Verizon’s high-yield dividend could become even more attractive.

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3. Village Super Market (NASDAQ: VLGEA)

Village Super Market offers a 3.3% dividend yield, which is still higher than the S&P 500 average. This supermarket chain, operating since 1937, has over 30 locations in states like New York and New Jersey. The stock is stable, with a low beta value of 0.25, meaning it doesn’t fluctuate much with market changes. Village Super Market has been profitable in the past four quarters, despite thin net margins of just over 2%. The stock has risen by 30% in the past year and remains a good value, trading at nine times earnings. For risk-averse investors, Village Super Market is a reliable and low-risk option.

Investing in these three stocks can significantly boost your dividend income while providing stability and growth potential.

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