Chasing high yields can be risky. Sometimes, yields look elevated because the stock price recently dropped sharply - which, depending on the reason for the drop, might mean you just bought into a loser.

Then, there are times when high yields are masking sky-high payout ratios, meaning they’re unsustainable for any prolonged period. In other cases, yields are boosted by one-off dividends that are unlikely to be repeated. 

The point is, high yields aren’t a sure sign of elevated, steady income. However, limiting your search to high-quality dividend companies like Dividend Kings with Wall Street’s buy ratings helps mitigate some of those risks.

Today, let’s look at the highest-yielding, buy-rated Dividend Kings in the market. 

How I Came Up With This List of Stocks

Using Barchart’s trusty Stock Screener tool, I entered the following criteria: 

• Dividend Payout Ratio: Left blank. The dividend payout ratio shows what percentage of the company’s earnings are used to pay dividends. I’ll review the results for each company and check if they are justified in having high or low payout ratios. 
• Current Analyst Ratings: 3.5 (Moderate Buy) to 5 (Strong Buy). 
• Annual Dividend Yield: Left blank so I can arrange the results based on this. 
• Watchlists: Dividend Kings. 

With those filters, I got 33 results: 

I then arranged them from highest to lowest dividend yield. Now, let’s discuss the top three, starting with number one: 

Northwest Natural Gas Company (NWN)

Rating: Moderate Buy

Northwest Natural Gas Company (NYSE:NWN) is a utility company that services over two million customers in the Pacific Northwest region of North America. It serves more than 140 communities spanning Oregon and Southwest Washington, with operations anchored by one of the most modern and extensive pipeline networks in the nation. 

Northwest Natural pays 49 cents quarterly in dividends, which works out to $1.96 per share, per year and around a 4.9% yield. The company has increased its payouts for 69 consecutive years, with the 70th increase expected to come in October 2025. 

Now, Northwest Natural does have a 65.02% dividend payout ratio, which I’d say is the upper limit of what most conservative investors are comfortable with. Still, the figure is supported by the company’s relatively stable cash flow, strong presence in the utilities sector, and regulated operations that provide predictable revenue even in challenging economic conditions.

Federal Realty Investment Trust (FRT)

Rating: Moderate Buy

Federal Realty Investment Trust (NSYE:FRT) is a real estate investment trust specializing in owning, operating, and redeveloping high-quality retail and mixed-use properties. The company boasts over 50 years of operating experience, ranking it as one of the oldest US REITs. 

As of February 2025, Federal Realty operates 102 properties that cover over 27 million commercial square feet, giving it a reliable stream of rental income backed by long-term leases with a diversified tenant base.

The company recently increased its dividends to $1.13 quarterly or $4.52 annually, which translates to around a 4.95% yield. This increase marks Federal Realty’s 58th consecutive year. 

As Federal Realty is a REIT, the company’s 92.32% dividend payout ratio shouldn’t be a problem, as all REITs are required by law to pay out 90% or more of their earnings to shareholders.

Stanley Black & Decker Inc (SWK)

Rating: Moderate Buy

Stanley Black & Decker Inc. (NYSE:SWK) is a global manufacturer of industrial tools, hand and power tools, outdoor equipment, and engineered fastening solutions. The company’s most recognizable brands include DEWALT, CRAFTSMAN, STANLEY, BLACK+DECKER, and Lenox - some of which I personally use around the house. Stanley Black & Decker has a significant presence in North America and Europe and has been making headway in emerging markets. 

The company pays 82 cents per share, or $3.28 annually, which translates to around a 4.7% yield. Stanley Black & Decker also boasts a 58-year streak of dividend increases, along with an unbroken 149-year streak of consecutive payments. 

For those interested in SWK stock, though, you need to know that it has a high 73.58% dividend payout ratio. That means that the company retains only 24.42% of its earnings to invest in itself. Now, this might not be a deal-breaker to most investors, but a high payout ratio such as this needs to be monitored, especially if you are buying SWK stock for the long haul. 

Final Thoughts

Dividend Kings offer unsurpassed reliability when it comes to shareholder value, and getting the highest-yielding ones with buy ratings from Wall Street can be a good way to pick and choose. However, due diligence does not end with your stock screener. You need to monitor your holdings for changes in fundamental metrics, industry conditions, and payout sustainability to ensure they continue to meet your income and growth objectives.

On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.