3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

Higher-yielding dividend stocks tend to be higher-risk investments. However, they can also offer higher rewards. If they can navigate their issues, they can supply investors with a very lucrative income stream over the long term.

Crown Castle (NYSE: CCI), EPR Properties (NYSE: EPR), and W. P. Carey (NYSE: WPC) currently stand out for their enticing dividend yields (all currently over 6%, which is significantly higher than the S&P 500's 1.2% yield). While the trio of real estate investment trusts (REITs) have faced some recent headwinds that have impacted their dividends, they are moving past those issues. Because of that, they appear poised to generate a lot of dividend income for their investors over the next decade.

A towering yield

Crown Castle's dividend currently yields 6.3%. The infrastructure REIT focused on data infrastructure, such as cell towers, has hit a speed bump in recent years. Higher interest rates and tenant issues have weighed on its growth. As a result, the company expects its adjusted funds from operations (FFO) to decline by about 8% this year.

Those issues have forced Crown Castle to make some changes. The company has shifted its focus to higher-returning capital projects, causing it to cut its growth spending plans. It has also launched a strategic review of its fiber business. These moves should boost its cash flow and returns, putting it in a better position to self-fund organic growth opportunities.

As CEO Steven Moskowitz stated in the third-quarter earnings release:

Looking ahead, we continue to be optimistic about the long-term value creation opportunities in our tower, small cell, and fiber solutions offerings. Across all forms of digital connectivity, the U.S. is generating record annual increases in data consumption, which we expect to drive continued demand for communications infrastructure.

That demand picture should get the REIT back on a growth trajectory in the future. In the meantime, Crown Castle has been holding its dividend flat to retain additional cash to fund its growth. It should be able to start growing its dividend again (it had delivered 7% compound annual dividend growth before pressing pause last year) once it gets past its current headwinds.

An attractive income stream

EPR Properties currently pays a monthly dividend that yields 8%. The specialty REIT focused on experiential real estate, like movie theaters and attractions, has battled pandemic-related headwinds in recent years. Many of its tenants couldn't operate during that period, which had lasting effects on their financials (one theater tenant ultimately filed for bankruptcy). As a result, the REIT had to temporarily suspend its dividend, and when it brought it back, it was at a lower level.

On a more positive note, many of the company's headwinds are in the rearview mirror. Because of that, it's generating stable cash flow to fund its dividend with room to spare. It's using that excess free cash to invest in new experiential properties.

EPR is on track to invest $225 million to $275 million this year. These new investments are growing its rental income, which has enabled the REIT to steadily raise its reset payout. (It gave investors a 3.6% raise earlier this year.)

The company believes it can fund a similar investment rate in the future. It has already lined up $150 million of experiential development and redevelopment projects it expects to fund over the next two years. The company's current investment rate is enough to grow its FFO per share by around 3% to 4% per year, which should continue supporting a similar growth rate in its dividend. Meanwhile, there's ample upside to that plan as interest rates fall.

Building back even better

W. P. Carey's dividend currently yields 6.3%. The diversified REIT had delivered a quarter century of annual dividend increases before last year. However, it made the strategic decision to exit the office sector by selling and spinning off those properties. It also opted to reset its dividend to retain more cash for future investments.

The REIT has already started rebuilding its portfolio and dividend. It's on track to invest about $1.5 billion into new properties this year, mainly industrial real estate and retail. The company targets operationally critical properties secured by long-term net leases with clauses that escalate rents at either a fixed rate or one tied to inflation.

W. P. Carey has plenty of financial flexibility to continue acquiring properties in the future. That should enable it to grow its rental income, which should support dividend growth. The REIT has already raised its payout a few times this year since the reset, a trend that seems likely to continue in the coming years.

Big-time income stocks

High-yielding dividend stocks can be higher risk, which has certainly been the case with Crown Castle, EPR Properties, and W. P. Carey in recent years. However, the trio of REITs are sorting out their issues, which puts them in a solid position to pay dividends that will likely rise over the coming decade. That makes them ideal dividend stocks to buy for those seeking to collect a lucrative income stream in the coming years.

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Matt DiLallo has positions in Crown Castle, EPR Properties, and W.P. Carey. The Motley Fool has positions in and recommends Crown Castle. The Motley Fool recommends EPR Properties. The Motley Fool has a disclosure policy.