Looking to Earn $10,000 in Passive Income? Consider Investing $115,000 in These 3 Secure High-Yield Dividend Stocks.

Passive income is a concept that many people find appealing. The idea of making money without having to put in much effort sounds like a dream come true. While it may seem too good to be true, the reality is that passive income does require some upfront investment. However, once you have accumulated enough capital, generating passive income can be relatively easy and lucrative.

If you’re looking to make $10,000 in passive income this year, investing roughly $115,000 in three safe high-yield dividend stocks could be a smart move. Let’s take a closer look at these stocks and why they could be a good investment for generating passive income.

1. Ares Capital (NASDAQ: ARCC)
Ares Capital is a business development company (BDC) that offers a dividend yield of 9.49%. This high yield is primarily due to the company’s business structure, which requires it to distribute at least 90% of its income to shareholders in the form of dividends. Ares Capital has a strong track record of generating income, with net income of over $1.5 billion last year. The company has paid a dividend every quarter for 14 years without any cuts, thanks to its highly diversified portfolio and focus on the upper end of the middle market. With a stable business model and strong financial performance, Ares Capital could be a reliable source of passive income.

2. Energy Transfer (NYSE: ET)
Energy Transfer is a midstream energy provider with a distribution yield of 8.93%. The company’s earnings have been on the rise, with a 15% increase year over year in the fourth quarter of 2023. Energy Transfer recently completed an acquisition that expanded its pipeline network to over 125,000 miles in the U.S. The company’s management has a significant stake in the business, with executives and board members owning roughly 11% of its units. With a focus on growth and a solid financial position, Energy Transfer could be a lucrative investment for generating passive income.

3. Enterprise Products Partners (NYSE: EPD)
Enterprise Products Partners is another midstream energy stock with a distribution yield of 7.72%. The company has a strong track record of increasing its distribution for 25 consecutive years, with a compound annual growth rate of close to 7%. Enterprise Products Partners has weathered economic downturns and market volatility well, with its cash flow per unit holding up during challenging times. With a focus on stability and consistent growth, Enterprise Products Partners could be a reliable source of passive income for investors.

While investing in these high-yield dividend stocks could potentially generate passive income of over $10,000, it’s important to consider the risks involved. There is always a possibility that these companies could cut their dividend distributions or that the stock prices could decline, offsetting any passive income earned from dividends. However, with their strong financial positions and stable business models, Ares Capital, Energy Transfer, and Enterprise Products Partners are well-positioned to deliver positive returns and significant passive income for investors in the coming year.