3 High-Yield Stocks Delivering Double-Digit Returns: Your 2026 Passive Income Playbook

The market’s dividend landscape has shifted dramatically. With the S&P 500 sitting at a paltry 1.1% yield—the lowest in over 25 years—hunting for genuine income opportunities feels like finding a needle in a haystack. But smart investors know the hunt is worth it: these three stocks are genuinely delivering what others can’t.

The Yield Reality Check

Most equities are barely worth holding for dividend purposes anymore. When average yields hover around 1%, generating meaningful passive income becomes nearly impossible. That’s exactly why certain companies that buck the trend deserve your attention. We’ve identified three standouts offering yields that range from 6.8% to 10.3%—substantially outpacing both the market average and prevailing interest rates.

Top Tier: Starwood Property Trust (STWD) - 10.3% Yield

Starwood leads the pack with a spectacular 10.3% distribution yield. This real estate investment trust focuses on income-generating properties and real estate-backed loans, converting interest and rental income into shareholder distributions. What makes Starwood particularly compelling is its decade-plus track record of maintaining these generous payouts through multiple market cycles.

The company recently made a strategic $2.2 billion move, acquiring Fundamental Income Properties to diversify its holdings. This addition brought 467 net-lease properties into the fold, each secured by long-term agreements with 17-year average lease terms and 2.2% annual rent escalation built in. Translation: predictable, growing income streams.

Year-to-date through Q3 2025, Starwood deployed $10.2 billion into new investments, including record infrastructure lending activity ($800 million in Q3 alone). This capital deployment muscle demonstrates management’s confidence in finding attractive opportunities while still funding that impressive distribution. The REIT’s diversified approach means it’s not betting everything on one property type or tenant.

Strong Second: Western Midstream Partners (WES) - 9.2% Yield

Trading at a 9.2% yield, Western Midstream operates as a master limited partnership controlling critical energy infrastructure: pipelines and processing facilities. The business model is deliberately boring in the best way—it generates cash from long-term contracts with fixed rates and government-regulated structures.

The numbers here are robust. WES expects to generate $1.3-$1.5 billion in free cash flow this year alone, easily covering both its distribution obligations and the capex needed for maintenance and expansion. The balance sheet backs this up: a leverage ratio of 2.8x sits comfortably below management’s 3.0x target, providing financial flexibility.

Recent acquisitions, including the $2 billion Aris Water Solutions deal, show how this flexibility translates to action. The payoff? Western Midstream just bumped distributions by 13% year-over-year. Management guides for low-to-mid single-digit annual increases going forward, with acquisition synergies capable of accelerating growth further.

Stable Play: Verizon (VZ) - 6.8% Yield

Verizon offers a more modest 6.8% yield but brings something the others don’t: a 19-year unbroken dividend growth streak. The telecom giant generates predictable revenue through mobile and broadband contracts, producing extraordinary free cash flow in the process.

The scale is impressive: $28 billion in operating cash flow through September, more than sufficient to cover $12.3 billion in capex and $8.6 billion in dividends with $7.2 billion remaining. Rather than pause or cut, management is channeling excess cash toward balance sheet fortification.

A transformative $20 billion acquisition of Frontier Communications is in process and should close soon. This deal amplifies Verizon’s ability to bundle mobile and broadband offerings, positioning the company for enhanced cash generation in 2026 and beyond—supporting further dividend growth.

The Passive Income Opportunity

These three represent a rare convergence: substantial yields far exceeding market averages, combined with management credibility demonstrated through years of consistent or growing distributions. Whether you’re targeting the aggressive 10.3% of Starwood, the infrastructure-backed 9.2% of Western Midstream, or the telecom stability of Verizon’s 6.8%, each offers a genuine pathway to meaningful passive income generation in 2026.

The key takeaway: high yields aren’t fantasies when you pick companies with sustainable business models, strong cash generation, and proven distribution discipline.