If you’re a retiree and want to make the most of your nest egg, investing in dividend stocks can be a great way to do so. You can maximize your regular income by investing in high-dividend stocks that have a strong track record of increasing their distributions. Dividend payments are never a guarantee, but companies with strong financials that prioritize increasing their distributions can be ideal income investments for your portfolio.

Three high-dividend stocks with high payout ratios that could be attractive to retirees today are AbbVie (NYSE: ABBV), Verizon Communications (NYSE: VZ)And Prologis (NYSE: PLD).

AbbVie

The pharmaceutical company AbbVie pays a high dividend of 3.3% – that is more than double S&P500 average yield of 1.4%. The stock is technically a dividend king if you consider its time as part of Abbott Laboratories. The company was spun off in 2013 and has consistently increased its dividend payments. Over the past five years, AbbVie has increased its dividend payment by 45%, representing a compound annual growth rate (CAGR) of 7.7%.

With AbbVie, retirees not only get a great dividend stock, but also a good growth stock. AbbVie has invested in several companies over the years to bolster its growth prospects. This year, the company completed several acquisitions, including neuroscience company Cerevel Therapeutics and cancer company ImmunoGen.

AbbVie faces challenges as it loses patent protection for its top-selling drug, Humira, but the company expects to return to strong growth next year and aims for high-single-digit annual growth over the long term.

With its high dividend and promising growth prospects, AbbVie can be a fantastic all-around investment for retirees. The company has consistently posted profits and trades at a fairly modest price-to-earnings ratio of 18.

Verizon Communications

Retirees can lock in a particularly high yield at telecom giant Verizon, which pays investors 6.5%, nearly double AbbVie’s rate. Rising interest rates and high debt loads have investors pessimistic about telecom stocks. But big names like Verizon are still solid long-term investments.

The company may not be a growth machine, but it can be a reliable dividend stock to hold for the long term. In the most recent quarter, which ended in June, the company’s earnings per share of $1.09 were only slightly lower than the earnings per share of $1.10 in the same period last year. And, importantly, that’s still a much higher profit than the company’s dividend payout of $0.665 per quarter.

The story continues

Verizon has increased its dividend by 10% in five years, giving it an average annual growth rate of just under 2%. While that’s not a particularly high growth rate, since Verizon already pays investors a high yield, retirees will still get plenty of dividends from the telecom stock even if there aren’t big increases. And if inflation continues to fall, at least those 2% increases may be enough to offset rising costs in the years to come, assuming Verizon continues to increase its dividend at a similar rate in the future.

Prologis

Prologis is a real estate investment trust (REIT) that invests in warehouses and plays a major role in the e-commerce industry. Many of its customers require large warehouses to transport products around the world. As a leading logistics company, Prologis is positioned to benefit from long-term growth in the global economy.

The stock pays the lowest yield on this list at 3.2%, but that’s still an above-average payout. The REIT projects its core funds from operations (FFO) per share to be around $5.39 to $5.47 this year, well above the size of its annual dividend of $3.84.

Prologis has been generous when it comes to dividend growth. The company has increased its payout to $0.96 per share from $0.53 five years ago. That represents an 81% dividend increase over that period and a compound annual growth rate of 12.6%. Given the cushion between the stock’s FFO and the dividend, it’s likely that Prologis will increase its payout significantly again next year.

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David Jagielski does not own any of the stocks mentioned. The Motley Fool owns positions in Abbott Laboratories and Prologis and recommends them. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.

3 high-dividend stocks with growth potential that retirees can rely on for regular income was originally published by The Motley Fool