High-Yield Dividend Stocks Worth Adding to Your Upcoming Investment List—Yields Up to 10.7%

The search for income-generating investments often leads investors to a disappointing reality. Today’s market landscape presents relatively thin dividend opportunities, with the S&P 500 yielding just 1.1%—near historic lows. Yet beyond mainstream index picks, there exists a curated selection of dividend stocks that buck this trend, offering substantially higher payouts. Here are three compelling candidates for investors building an upcoming portfolio focused on passive income generation.

Ares Capital: A Decade-Plus Dividend Growth Story

Ares Capital trades under ticker ARCC on the NASDAQ with a current 9.5% distribution yield. Operating as a business development company (BDC)—a registered investment vehicle—it must distribute at least 90% of taxable earnings to shareholders, a structural feature that incentivizes consistent payouts.

What distinguishes this BDC from peers is its exceptional consistency. While many competitors have stumbled through interest rate volatility and market headwinds, Ares Capital has successfully grown or maintained its dividend for over 16 consecutive years. The company focuses on providing growth capital to middle-market enterprises (businesses generating $100 million to $1 billion annually), sourcing returns through direct lending and equity stakes.

The investment thesis rests on several pillars. Its portfolio spans 587 companies with an annualized net realized loss rate hovering near 0%—outperforming both its peer group at -1.1% and traditional banking institutions at -0.6%. Concentrated in senior secured loans, the portfolio offers downside protection while generating steady interest and dividend income to fuel distributions.

Starwood Property Trust: Multi-Strategy Dividend Resilience

Starwood Property Trust (NYSE: STWD) leads this group with a 10.7% distribution yield, making it the highest-paying option among the three. As a real estate investment trust (REIT), it faces the same 90% payout obligation, yet has maintained an unbroken dividend since its 2009 public debut—an impressive record that spans over a decade of consistency at current payment levels.

The REIT’s resilience stems from deliberate portfolio diversification. Originally focused exclusively on commercial mortgage lending, it has evolved into a multi-pronged investment platform encompassing direct real estate ownership, residential lending, and infrastructure assets. This strategic shift reduced concentration risk while opening new revenue channels.

Recent growth initiatives underscore management’s confidence. The $2.2 billion acquisition of Fundamental Income Properties added 467 net lease properties with weighted-average lease terms of 17 years and 2.2% annual rent escalations—creating a predictable, inflation-hedged income stream. This platform expansion provides Starwood with durable revenue sources to support its premium distribution level going forward.

Western Midstream Partners: Infrastructure Income With Growth Optionality

Western Midstream Partners (NYSE: WES) offers a 9% distribution yield through a master limited partnership (MLP) structure. These vehicles funnel cash to investors via Schedule K-1 tax forms, creating a pass-through arrangement that benefits from favorable tax treatment.

The MLP temporarily reset its distribution in 2020 as pandemic disruptions weighed on earnings, but has since staged a robust recovery. Today’s payout level substantially exceeds pre-pandemic levels, reflecting operational normalization and renewed strategic focus. The portfolio comprises energy midstream assets—pipelines and processing infrastructure—predominantly backed by long-term contracts or government-regulated tariffs, ensuring cash flow predictability.

Capital deployment strategy reinforces the growth narrative. The $2 billion acquisition of Aris Water Solutions, combined with construction of the Pathfinder Pipeline and North Loving II gas processing facility, should continue driving distribution increases at low-to-mid single-digit annual rates, the company’s stated long-term target.

Strategic Considerations for Income-Focused Investors

These three stocks represent a curated selection of income opportunities for portfolios prioritizing dividend performance. Ares Capital delivers steady, predictable growth; Starwood Property combines resilience through diversification; and Western Midstream pairs infrastructure stability with organic growth. All three maintain solid operational foundations and management teams committed to supporting their sizable distributions.

For investors evaluating which upcoming dividend stocks deserve portfolio space, these three merit serious consideration as core holdings in an income-generation strategy focused on building long-term passive revenue streams.