Here’s a look at five companies that currently offer dividend yields above 4 percent and that I believe have the financial strength, cash flow stability, and business durability to sustain and grow those dividends over time. These companies can provide consistent income that keeps pace with or exceed the rate of inflation, without relying on speculative stock price appreciation. Stable share prices combined with reliable income are the objective.
The following companies operate in defensive or essential industries such as consumer staples, healthcare, and housing. A few appear undervalued relative to their historical averages, which can push yields higher and potentially improve long term total returns.
These are not short term trades. They are income producing businesses designed to work quietly in the background while paying you to wait.
General Mills (GIS)
General Mills is one of the most boring companies in the best possible way. It is a global food manufacturer with a portfolio of iconic brands like Cheerios, Wheaties, Nature Valley, and Pillsbury. These give the company shelf space dominance and steady consumer demand across economic cycles.
At current prices, General Mills is yielding almost 5.5%. Its five year dividend growth rate is around 4%, with a ten year growth rate closer to 3%. While dividend growth is not super aggressive, the starting yield does most of the work for income investors.
General Mills generates consistent operating cash flow year after year. Free cash flow comfortably covers dividend payments, and the payout ratio remains reasonable for a consumer staples business. The balance sheet does carry debt, but maturities are well laddered and supported by predictable earnings. Importantly, management has prioritized dividend stability even during periods of margin pressure.
The dividend yield is above its long term average, which often signals that the market is discounting for slower growth. For income focused investors, that can be an opportunity. You can get in while the price is slightly depressed which means you’ll have a higher upside if the stock price heads up in the right direction.
Key Risk to Watch: The primary risk for General Mills is prolonged margin compression from input costs or an inability to pass price increases through to consumers. While demand is stable, sustained pressure on margins could slow dividend growth, even if a cut remains unlikely.
Sanofi (SNY)
Sanofi is a large multinational pharmaceutical company with operations spanning prescription medicines, vaccines, and specialty care treatments. Sanofi focuses on scale, recurring revenue, and long product lifecycles.
Sanofi currently yields a little over 4.5%. Dividend growth has been modest, generally in the low single digits over both five and ten year periods. This is a steady income story.
Cash flow generation is supported by a broad portfolio of therapies and global distribution. Free cash flow has historically covered the dividend with room to spare, and the payout ratio remains conservative relative to many peers. The balance sheet is solid for a pharmaceutical company, with manageable leverage and ample liquidity to fund research, acquisitions, and shareholder returns.
Healthcare demand is relatively insensitive to economic cycles, which reduces the risk of a sudden earnings shock. And Sanofi’s diversification limits the impact of any single product loss.
Key Risk to Watch: Regulatory changes, pricing pressure, or an unexpected acceleration of patent expirations could affect cash flow. These risks are typically slow moving, but they can weigh on dividend growth if not managed carefully.
Mid-America Apartment Communities (MAA)
MAA is a residential real estate investment trust (REIT) that owns and operates apartment communities primarily across the Sunbelt region of the United States. Its focus is on high growth metropolitan areas with favorable demographics, job growth, and long term housing demand.
MAA currently yields around 4.5%. The five year dividend growth rate is close to 9%, while the ten year rate is roughly 7%, reflecting both rent growth and disciplined capital allocation.
As a REIT, the key metric is funds from operations. MAA consistently generates funds from operations (FFO) well in excess of its dividend requirements, leaving a margin of safety. The balance sheet is conservatively managed with staggered debt maturities and predominantly fixed rate borrowing, which limits near term interest rate risk.
Apartment REITs benefit from recurring monthly rent payments and diversified tenant bases. Even in economic slowdowns, people need housing, which supports cash flow stability and dividend safety.
Key Risk to Watch: Rising unemployment or localized oversupply in certain Sunbelt markets could pressure occupancy or rent growth. Higher refinancing costs could also impact REIT valuations, even if cash flows remain stable.
Diageo (DEO)
Diageo is a global beverage alcohol company that owns many of the world’s most recognized brands. Its portfolio include Johnnie Walker, Crown Royal, Smirnoff, Don Julio, Tanqueray, and more, sold across developed and emerging markets.
The stock currently yields about 4.5%. Dividend growth rate is about 8% over the last 5 years and a little over 6% for the last 10. This positions Diageo as a high current income payer and a relatively fast grower.
Diageo produces strong operating cash flow due to brand loyalty and pricing power. Free cash flow coverage of the dividend has remained solid, even during periods of economic stress. The balance sheet carries moderate leverage, but debt is supported by stable global revenue and long lived brands that generate repeat sales.
Alcohol consumption tends to be resilient during downturns, and Diageo’s premium brand positioning allows it to pass along price increases over time, which helps protect margins and dividend purchasing power.
Key Risk to Watch: Shifts in consumer preferences, particularly away from premium spirits, or adverse currency movements could impact reported earnings. These factors may influence dividend growth rates, though they are unlikely to threaten the payout itself in the near term.
Rexford Industrial Realty (REXR)
Rexford Industrial Realty is an industrial REIT focused exclusively on infill industrial properties in Southern California. These assets are located near population centers and transportation hubs, where land scarcity creates long term pricing power.
REXR currently yields just over 4%. Its dividend growth profile is a stand out. 5 year growth rate is almost 18% and 10 year is a little over 13% annually. That level of growth provides meaningful inflation protection for income investors.
The company’s cash flow strength comes from rising rents, high occupancy rates, and active asset repositioning. Funds from operations have consistently grown faster than the dividend, resulting in a conservative payout ratio. The balance sheet emphasizes long term fixed rate debt and disciplined leverage, supporting dividend durability.
Industrial real estate is critical to modern supply chains and regional distribution. While interest rates impact valuation, they do not directly impair the underlying cash flows that support the dividend.
Key Risk to Watch: A sharp slowdown in industrial demand or a material decline in regional logistics activity could pressure rent growth. Additionally, prolonged higher interest rates may limit valuation recovery even if cash flow remains strong.
These five companies share some important traits. They operate in essential industries, generate consistent cash flow, and offer dividend yields above 4 percent without relying on fragile business models. Several also appear to be trading at yields above their historical averages, which can enhance long term income potential.
Income investing is about durability, discipline, and letting time do the work. These are the kinds of businesses that aim to pay you consistently.
I asked ChatGPT to do some back-of-the-envelope calculations. Don’t hold me or it to the number. I did this as an exercise to see what a $10,000 investment 10 years ago, spread equally across all 5 companies, might yield. Here’s its answer:
What a $10,000 Investment Would Have Grown Into Over 10 Years
To put some real-world context around these companies, it helps to look backward for a moment.
Let’s assume a hypothetical $10,000 investment made ten years ago, split evenly across all five companies. That means $2,000 invested in each stock, with all dividends fully reinvested over the entire period. The goal here is not precision to the penny, but a realistic illustration of how income, reinvestment, and time work together.
Using historical total return data, which already includes reinvested dividends, here’s what that portfolio would have looked like after a decade.
Estimated 10-Year Results (Dividends Reinvested)
- General Mills (GIS):
Approximate annualized return of 8 percent
$2,000 would have grown to about $4,300- Sanofi (SNY):
Approximate annualized return of 6.5 percent
$2,000 would have grown to about $3,750- Mid-America Apartment Communities (MAA):
Approximate annualized return of 11.5 percent
$2,000 would have grown to about $5,900- Diageo (DEO):
Approximate annualized return of 9.5 percent
$2,000 would have grown to about $5,000- Rexford Industrial Realty (REXR):
Approximate annualized return of 15 percent
$2,000 would have grown to about $8,100Total Portfolio Outcome
- Starting investment: $10,000
- Estimated value after 10 years: ~$27,000
That represents roughly a 10.5 percent annualized return for the portfolio as a whole, driven largely by dividends and reinvestment rather than aggressive multiple expansion.
The example highlights something income investors often underestimate. Steady businesses that pay reliable dividends can quietly compound over long periods, especially when those dividends are reinvested.
Some holdings in this group grew faster than others, but none of them relied on speculation. The income keeps working for you year after year.
This article is for informational and educational purposes only and represents my personal opinions. It does not constitute investment advice or a recommendation to buy or sell any security. I am not an investment advisor or financial professional. The information presented is believed to be accurate at the time of publication, but market conditions, company fundamentals, and dividend policies can change at any time. Investing involves risk, including the potential loss of principal. Readers should conduct their own research and consult with a qualified investment professional before making any investment decisions.
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