7 Ways to Earn 4% to 6% from Dividend-Paying Stocks
Exchange-traded funds that own preferred stocks and steady-Eddie telecoms and utilities can provide safe and reliable payouts.

Bonds aren't the only investments that generate regular income. You might want to consider select high-income stocks. Preferred stocks are a way for companies to raise equity capital instead of taking on debt by selling bonds. Shareholders in preferred stocks have a higher legal claim to a company's assets and earnings than do its common shareholders, and preferred dividends take precedence over a company's payment of common dividends. Preferreds are typically issued with fixed dividends, so the securities tend to act as bonds do, fluctuating in price with market interest rates.
Earnings for All
- 35 Ways to Earn Up to 11% on Your Money
- Short-Term Accounts: 1%-2%
- Muncipal Bonds: 2%-3%
- Investment-Grade Bonds: 3%-4%
- Foreign Bonds: 3%-5%
- High-Yield bonds: 3%-6%
- Dividend-Paying Stocks: 4%-6%
- Real-Estate Investment Trusts: 4%-9%
- Closed-End Funds: 4%-9%
- Master Limited Partnerships: 8%-11%
The common stocks of electric, gas and water utilities have long been favorites of income hunters. As with other income vehicles, they face more risk of price declines as interest rates rise. But if income is your priority, focus on the prospects for a consistent payout rather than on stock-price volatility (see Steady Income from Volatile Sources). Telecom giants are also fertile hunting ground for payouts you can depend on.
The risks: Prices for these bond proxies often suffer when interest rates move up. Early this year, rising rates drove many preferreds lower–though not drastically. But the Dow Jones utility stock index plunged 17% from mid November 2017 to early February before recovering somewhat. That has driven yields up, with electric utility yields now mostly ranging from 3% to 6%. The dividends of select telecom stocks are essentially safe, but given debt levels and network spending needs, the payout growth rate is low.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How to invest: Exchange-traded funds that own a mix of preferred stocks are an easy way to buy in. Three names worth investigating: iShares U.S. Preferred (PFF, $37, 5.3%), PowerShares Preferred (PGX, $14, 5.7%) and VanEck Vectors Preferred Securities ex-Financials (PFXF, $19, 6.3%). Utilities that should deliver consistent payouts include American Electric Power (AEP, $68, 3.6%) and Southern Co. (SO, $45, 5.1%). AT&T (T, $35) and Kiplinger Dividend 15 member Verizon Communications (VZ, $48) yield 5.8% and 4.9%, respectively. For the past 10 years, AT&T has raised its quarterly dividend by 1 cent every year, to the current rate of 50 cents per share. Verizon's payout has risen by 1.25 cents a year for the past few years, to 59 cents per share per quarter.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
A New 2026 Tax Deduction Change for People Over Age 65
Tax Changes Adjustments to the extra standard deduction can impact the tax bills of millions of older adults. Here are some new amounts to know for 2026.
-
Family Tax Credits 2026: New IRS Changes That Can Save You Money
Tax Credits While the child tax credit remains the same, other family tax credits are higher for 2026, including the earned income tax credit and other inflation-adjusted amounts. Here's what they're worth now.
-
Dow Adds 587 Points as Stocks Bounce: Stock Market Today
The main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market Today
The main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
Stocks Retreat as Shutdown Continues: Stock Market Today
While the main indexes closed lower today, Delta and PepsiCo gained ground on encouraging earnings reports.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market Today
Tech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Rally Fades on Mixed AI Revolution News: Stock Market Today
All three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
S&P, Nasdaq Hit New Highs: Stock Market Today
A late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market Today
The lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
-
Stocks at New Highs as Shutdown Drags On: Stock Market Today
The Nasdaq Composite, S&P 500 and Dow Jones Industrial Average all notched new record closes Thursday as tech stocks gained.