My 3 Favorite High-Yield Dividend Stocks to Buy This September (1 Yields 6.4%)

Realty Income raised its monthly dividend for 115 consecutive quarters (5.2% yield) while Verizon is set to extend its dividend growth streak toward 20 years (5.7% yield). Verizon reported $18.4B in cash flow from operations in H1 2026, covering $8.2B capex and $5.9B dividends, and is on track for $21.5B+ free cash flow after capex (up 9%+ YoY). Energy Transfer boosted its distribution for 19 straight quarters, offering a 6.4% yield, with $5.3B distributable cash flow in H1 comfortably covering $2.3B paid to investors.

Analysis

This is more a duration/carry screen than a true fundamental catalyst. O has the cleanest operating leverage to falling rates and tighter credit spreads because its growth model depends on acquiring assets at spreads to its cost of capital; if financing stays sticky, the payout is durable but the equity can remain range-bound. VZ is the weakest upside story: the dividend looks safe, but the stock still behaves like a levered bond proxy unless subscriber trends and pricing improve, so incremental yield buyers may be disappointed by limited multiple expansion. ET has the best medium-term compounding profile because retained cash flow and a long project pipeline can lift per-unit distributions without needing a commodity bull market.

Second-order effects matter more than the headline yield. For O, lower rates help cap rates, but they also attract more private capital into sale-leasebacks, which can compress acquisition spreads over 6-18 months and slow external growth. For ET, the real beneficiaries are midstream contractors, compressor makers, and gas-processing adjacencies; the losers are smaller, more levered midstream names that need capital markets access. For telecom, a lower-rate backdrop helps all large carriers mechanically, but TMUS likely converts cheaper capital into growth and buybacks faster than VZ converts it into equity upside.

The contrarian risk is that investors overpay for dividend streaks and underweight the fact that these are still balance-sheet and growth stories. The dividend itself is not the catalyst; the catalyst is either cheaper funding or a re-acceleration in fundamentals. If 10-year yields stay sticky, O and VZ can underperform even while dividends keep rising, while ET is the most resilient but still vulnerable to execution and regulatory delays.

Key Decisions for Investors

• Long ET / short VZ, 3-6 months, as a relative-value income trade: ET has better cash-flow growth optionality and less dependence on a re-rating, while VZ needs rate relief or operating inflection to outperform. Falsify if VZ guidance turns meaningfully better or ET project execution slips.
• Do not chase O at current levels; buy only on a 5%+ pullback or if the 10-year yield breaks lower and credit spreads stay tight. Use a 6-12 month call spread if expressing the view, since upside is more rate-driven than company-specific.
• For telecom exposure, prefer TMUS over VZ on any sector pullback; if rates fall, TMUS should convert lower financing costs into faster equity compounding, while VZ remains capped by low-growth perception.
• Treat ET as the highest-quality hold in the group, but monitor FERC/permitting and in-service timing on new projects. If distribution growth guidance drops below the 3%-5% framework, cut exposure; the market will not pay a premium multiple for missed execution.