Despite the volatility the broader market has experienced in recent months, the S&P 500 index (^GSPC -1.61%) is still at lofty levels. The dividend yield is a miserly 1.3% or so. You can do better than that with an index fund focused on the out-of-favor energy sector, but even there, the average yield is “only” around 3.5%. You can do much better with Chevron (CVX -1.25%), TotalEnergies (TTE -0.86%), and Enterprise Products Partners (EPD -1.21%), which offer yields of up to 6.6%.

1. Chevron is a reliable dividend stock

The energy industry tends to be volatile, given the volatile nature of oil and natural gas prices. But Chevron has managed to ride the ups and downs in relative stride, having now increased its dividend annually for 38 consecutive years. With oil relatively weak today, the company’s stock price has fallen and the yield has risen to an attractive 4.8%. That’s well above the average energy stock.

Image source: Getty Images.

Chevron’s business model is the foundation of its success on the dividend front. First, the company’s integrated model exposes it to the upstream (drilling for energy), the midstream (pipelines), and the downstream (chemical and refining). This diversification helps to soften the effect of the peaks and valleys the sector goes through. Second, Chevron has a strong balance sheet, with a debt-to-equity ratio of around 0.2x today. That would be a low level of leverage for any company, but the key is that it gives management the leeway to lean on the balance sheet during hard times so it can continue to support its business and the dividend.

If you are looking for broad exposure to the energy sector, Chevron is usually one of the more attractive options available. And today, given its relatively high dividend yield, it is more attractive than usual.

2. TotalEnergies adds clean energy to the energy mix

TotalEnergies, which has a 6.5% dividend yield, is also an integrated energy major, like Chevron. So the two companies share a basic business model. That said, the French energy giant tends to carry more debt, so the balance sheet isn’t quite as strong. Management also carries more cash, so the net debt-to-equity ratio is on par with Chevron. That’s reassuring, but it still isn’t the same thing as having less debt. There is a bit more balance sheet risk with TotalEnergies.

Yet there’s a reason, beyond the higher yield, that income investors might prefer TotalEnergies over Chevron. That goes back to the integrated approach. Chevron has largely stuck to its oil and natural gas roots. TotalEnergies has been building a business around electricity and clean energy. Basically, it’s using the profits from dirtier carbon fuels to invest in the energy niche that is increasingly displacing those fuels. If you like the idea of Chevron but prefer a clean energy hedge, TotalEnergies will be a no-brainer high-yield switch-out for you.

3. Enterprise Products Partners sidesteps commodity prices

If you like the yields on offer from Chevron and TotalEnergies, but you just can’t get past the exposure to volatile commodity prices, don’t worry. There is still a high-yield energy opportunity for you in the form of midstream giant Enterprise Products Partners, which has a lofty 6.6% or so yield backed by 26 annual distribution increases. The key here is that this master limited partnership (MLP) is just a toll taker.

Enterprise owns the infrastructure (midstream assets) that helps move oil and natural gas from where it is produced to where it is used. It charges fees for the use of these assets, so demand for energy is more important than the price of energy to Enterprise’s top and bottom lines. Energy demand tends to remain robust regardless of energy prices, given the importance of power to the modern world. So Enterprise tends to produce reliable cash flows through the entire energy cycle. That allows it to support its large and growing distribution.

The one problem with Enterprise for some investors will probably be its growth profile, which is basically as exciting as watching a tortoise “run.” However, given the high yield, investors focused on maximizing the income they generate probably won’t care too much about that issue.

Don’t settle for average — you can do better

If you’re looking for energy exposure, you could simply buy an index-based ETF, settling for a yield of around 3.5%. That’s not exactly bad given the painfully low yield of the broader market. However, you can do better with well-run integrated energy giants Chevron and TotalEnergies. Meanwhile, you can sidestep commodity risk and still collect a lofty energy-related yield with Enterprise Products Partners. As little as $500 could get you started in each of these high-yield energy investments.

PepsiCo (PEP -0.27%) kicked off its 2025 reporting year with weak results and cut its full-year guidance — pushing shares down to a new 52-week low. In fact, Pepsi is down over 24% in the past year and is knocking on the door of a five-year low.

The sell-off has pole-vaulted Pepsi’s yield up to 4.1%. And with 53 consecutive years of dividend increases, the beverage and snack giant has an extensive track record of delivering reliable passive income to shareholders.

Here’s why the fizz has evaporated from Pepsi stock and whether the Dividend King is worth buying now.

Image source: Getty Images.

Pepsi’s dividend is intact despite its guidance cut

Pepsi reported a 1.8% decline in revenue and a 4% decline in constant currency earnings per share (EPS). Constant currency adjusts for changes in currency conversions between reporting periods, making it a more accurate way to measure operating results.

The owner of several beverage brands as well as Frito-Lay and Quaker Oats saw flat beverage volume growth and a 3% decline in convenient foods — illustrating strain on consumer demand. The opening quote from CEO Ramon Laguarta in Pepsi’s earnings release was bleak:

Our businesses remained resilient in the midst of increasingly dynamic and complex geopolitical and macroeconomic conditions in the first quarter. As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs. At the same time, consumer conditions in many markets remain subdued and similarly have an uncertain outlook.

In 2025, Pepsi is now guiding for a low-single-digit organic revenue increase, $7.6 billion in dividends, and $1 billion in buybacks. It expects flat year-over-year core constant currency EPS compared to prior guidance of mid-single-digit growth. Core EPS excludes restructuring, acquisition, and one-time costs. All told, Pepsi expects 2025 core EPS to decline by 3% compared to previous guidance for a slight increase.

Value is top of mind for consumers

Pepsi cited three factors for its guidance cut: tariffs, macroeconomic uncertainty, and consumer weakness. On past earnings calls, Pepsi has discussed balancing quantity and price by offering more chips per bag to drive value and boost demand. However, pressure on consumers has intensified. Laguarta said the following on the call:

What we’re seeing is that consumers are giving a lot of value to absolute dollars now. So clearly, entry price points and absolute outlay of money per unit is a very important relevant metric. And so, we’re putting more emphasis on those entry price points and making sure that we’re not asking for a large amount of money for participating in our brands … that’s why smaller, single-serve, smaller multi-packs, those are all tools for us to keep the consumers in the brand.

In sum, tariffs are far from Pepsi’s only challenge. Consumer demand continues to deteriorate, which is pressuring Pepsi to make changes just to keep buyers engaged. Pepsi’s struggling snack business is relying on single-serve options below the $2 price point. When buyers spend more, they often gravitate toward multipacks. Pepsi has lowered the price of its 10-count multipacks to increase consumer frequency and shift its focus to a price-per-pack mindset.

In other words, if consumers can think of a low cost per pack rather than a higher cost for a larger quantity in a single bag, then it could make the purchase more appealing.

Adjusting to changing consumer preferences

Despite years of challenges and slowing growth, it may come as a surprise that Pepsi has continued to invest in product innovation and acquire new brands. In the last six months, Pepsi has become the sole owner of Sabra and Obela snack and dip products, completed its acquisition of the Mexican-American food brand Siete Foods, and announced its intention to acquire the prebiotic soda brand Poppi.

Together, these acquisitions diversify Pepsi’s convenient food and beverage lineup, making it less centered on chips and high-sugar soda, more adaptable to health-conscious consumers, and featuring ready-to-eat meal replacements.

These deals are too small on their own to move the needle in the near term. However, they reveal an element of self-awareness, suggesting that Pepsi is overly reliant on unhealthy snacks and beverages and recognizes the need to diversify to adapt to shifting consumer preferences.

However, Pepsi has been having some noteworthy successes with its core bands. The Pepsi brand has been gaining market share and focusing on the zero-sugar category. Gatorade and Propel have helped Pepsi maintain its leadership in the sports drink category. Pepsi believes it can improve its value chain by optimizing the processes of making, moving, and selling products, which can drive long-term margin growth.

Pepsi’s valuation has gone from inexpensive to bargain bin

Tariff turmoil adds another layer of complexity to what has already been a challenging few years for Pepsi. However, Pepsi has simply become too cheap to ignore. A 3% decline implies 2025 core EPS of $7.92 — giving Pepsi a price-to-earnings ratio based on its core EPS forecast of just 16.8. That’s a dirt cheap valuation for a high-yield Dividend King stock.

What’s more, Pepsi can continue supporting its capital return program even during this period of slowing growth. The company remains highly profitable, so its challenges are not severe enough to threaten a dividend cut.

However, Pepsi’s acquisition spree, paired with slowing growth, has added debt to its balance sheet. Its leverage ratios remain in decent shape, but investors should monitor Pepsi’s net debt position to see if it can decrease over time as the company leverages its global supply chain, distribution, and marketing to maximize the benefits of its recently acquired brands.

A reliable income stock that’s worth buying and holding

Entering 2025, Pepsi was not at the top of its game. And now that tariffs are expected to add further cost pressure, short-term investors may feel compelled to sell the stock.

Management’s lack of enthusiasm for Pepsi’s 2025 outlook is palpable, but the stock is simply too cheap to ignore. With expectations down, Pepsi doesn’t have to do much to surprise to the upside. In the meantime, the 4.1% dividend yield offers a worthwhile incentive to hold the stock during this period.

Add it all up, and Pepsi stands out as a high-conviction buy for value investors with at least a three to five year investment time horizon to boost their passive income stream.

Most Americans still park their savings in traditional checking or savings accounts earning just 0.07% APY. That means if you have $30,000 sitting in there, it’s making about $21 a year. That’s less than the price of two movie tickets — for the whole year.

What people should be doing is keeping their cash in a high-yield savings account (HYSA). With APYs up to 4.40%, that same $30,000 could earn over $1,300 a year, without any added risk.

Let’s take a closer look at what you stand to gain by switching to a high-yield savings account.

What $30,000 earns in high-yield savings (vs. traditional accounts)

I’ve done the calculations for a few different scenarios to show you how much $30,000 would earn over the course of a year in various account types.

Our Picks for the Best High-Yield Savings Accounts of 2025

American Express® High Yield Savings Account Member FDIC. APY 3.70% Rate info 3.70% annual percentage yield as of April 26, 2025. Terms apply. Member FDIC.	3.70% Rate info 3.70% annual percentage yield as of April 26, 2025. Terms apply.	$0
CIT Platinum Savings Member FDIC. APY 4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000+ for max APY Member FDIC.	4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY	$100 to open account, $5,000+ for max APY
Barclays Tiered Savings Member FDIC. APY 4.10% Rate info Balances less than $250,000 earn 4.10%, and balances greater than $250,000 earn 4.30%. Member FDIC.	4.10% Rate info Balances less than $250,000 earn 4.10%, and balances greater than $250,000 earn 4.30%.	$0

Here’s a simple comparison based on national average checking and savings account rates, plus a competitive HYSA rate you can find today:

Shares of FedEx (FDX -0.84%) hit a new 52-week low on March 21 after the company reported fiscal third-quarter earnings and trimmed its full-year guidance again. Shares of rival package delivery company United Parcel Service (UPS -1.18%) also fell on the news, and then sold off by another 5.1% on March 25 in apparent response to Bank of America analyst Ken Hoexter’s downward revision of his forecast for the logistics giant. Hoexter now expects UPS’ earnings for the current quarter to be 15% below his prior estimate.

With the stock at its lowest level since July 2020, is UPS a buy, or is the dividend stock falling for valid reasons?

Image source: Getty Images.

UPS is in for another challenging year

UPS’ sales and operating margins have been falling as the transportation sector has been hit hard by pullbacks in consumer spending and high interest rates. Management is guiding for 2025 revenue to decline by 2.3%, but expects its operating margin to rise by 130 basis points to 8.8% — an increase compared to 2024, but still below pre-pandemic levels.

UPS Revenue (TTM) data by YCharts.

That guidance is fairly weak, but what was even more concerning was this comment from CFO Brian Dykes on the Q4 earnings call: “Our guidance for 2025 does not reflect any significant potential global trade implications due to changes in tariffs.”

On the earnings call, UPS noted that S&P Global forecasts 2.5% GDP growth in 2025, and a 2% increase in real exports and global industrial production. However, if tariffs and trade wars hinder economic growth, these estimates could prove too optimistic, and UPS’ results could be noticeably worse than its already uninspiring projections.

FedEx just cut its fiscal-year adjusted earnings per share (EPS) guidance to a range of $18.00 to $18.60 per share. At the midpoint, that’s down by more than 6% from the guidance it gave just a quarter ago, and down 12.9% from its initial forecast for the year from June. Given the analyst cut that sent UPS stock falling last Tuesday, there appear to be reasons to be concerned that UPS’ results could be even lower than projected.

A slowdown in 2025 could put the company’s medium-term goals in jeopardy. On the latest earnings call, UPS said it expects to return to margin growth in 2026 — forecasting a domestic operating margin of 12% by the fourth quarter of 2026. But if there’s a period of prolonged economic weakness, it may not be able to hit that goal on schedule.

UPS dividend is becoming unaffordable

Since it began distributing regularly scheduled quarterly payouts in 2000, UPS has never cut its dividend. However, there have been years when the company did not raise it. But in 2022, UPS boosted its quarterly dividend from $1.02 per share to $1.52 per share — a massive increase that may have been a mistake in hindsight.

At the time, UPS was firing on all cylinders — growing its revenue, expanding its operating margin, and generating tons of free cash flow (FCF). If UPS had built on that momentum, that 49% higher dividend would have been reasonable. Instead, EPS and FCF fell while UPS continued to make modest annual increases to its payout.

UPS Dividend Per Share (TTM) data by YCharts.

Now, UPS’ dividend payments are absorbing the bulk of its FCF and earnings. When UPS decided on that large dividend raise in 2022, it had a much more manageable payout ratio.

On UPS’ fourth-quarter 2024 earnings call on Jan. 30, management said it expects $5.7 billion in 2025 FCF, which includes its annual pension of $1.4 billion, $3.5 billion in capital expenditures as it invests in improving its network, $1 billion in stock buybacks, and $5.5 billion in dividends. In short, UPS doesn’t think it will generate enough FCF to cover its capital allocation targets, which will put pressure on its balance sheet.

Fortunately, UPS could take on debt, and even if it did, its balance sheet would still be in great shape. UPS paid down debt during the pandemic years when it was booking unusually strong earnings. Its net total long-term debt position is just $15 billion — which is healthy for a company of its size — as evidenced by its strong leverage ratio.

UPS Net Total Long Term Debt (Quarterly) data by YCharts.

UPS can cover a bit of its capital return program by taking on debt in the near term. However, that’s not a sustainable strategy, and it will need to improve its earnings and FCF significantly to reach its target payout ratio of 50%.

President Donald Trump’s tariffs are coming at a terrible time for UPS, as the company was already in recovery mode. A U.S. economic slowdown could delay the company’s turnaround and put further pressure on its balance sheet. If its FCF continues to decline, it could cut its stock buyback program. And if macroeconomic conditions get really bad and stay bad for a while, UPS could have little choice but to consider a dividend cut.

While no investor welcomes a dividend cut, UPS’ yield is high enough that it could trim the payout and still be an excellent source of passive income. For example, if UPS reduced its dividend to $1 per share per quarter — about the same payout it was distributing at the end of 2021 before its massive raise, the stock would still yield 3.6% based on its share price of around $110 at the time of this writing. That’s still a far higher yield than the market average, and higher than many quality dividend stocks.

UPS could still be a good long-term buy

UPS’ near-term prospects look bleak, but its balance sheet is strong, it remains an industry leader, and its dividend could take a cut and still be attractive. UPS is also trading at a dirt-cheap valuation of just 16.3 times earnings. If its earnings fall by, say, 20% in 2025, UPS would still have a P/E of around 20 at the current share price, making it a bargain even assuming an especially negative scenario.

Add it all up, and UPS could be a great buy for patient investors willing to look past the next few years.

During Brookfield Renewable‘s (BEP 0.11%) (BEPC -0.34%) fourth-quarter 2024 earnings call, the company’s CEO stated very clearly that, “Following several decades of modest electricity demand growth, we are experiencing a dramatic shift in demand driven by the AI revolution.” That’s basically the same sentiment that’s being expressed by electricity providers across the board and it highlights an opportunity for investors broadly and income investors specifically.

Who is going to win?

Brookfield’s CEO went on to explain that he believes artificial intelligence (AI) is “one of, if not the most, significant advancement in technology in our lifetime.” That may very well be true, but history is filled with massive technological advances and the investment lessons aren’t great. Very recently there was the advancement of electric vehicles (EV), with Tesla effectively creating an entire new industry.

Image source: Getty Images.

There was great excitement at first, with a host of companies attempting to follow Tesla’s lead and build EV companies from the ground up. Only many of those companies have now gone bankrupt. The ones that have survived experienced massive stock spikes early on when Wall Street was enamored with the EV story. But many have lost 90% or more of their value as investors realized that not every EV company was going to be a winner.

The same story unfolded with internet stocks at the turn of the century. Yes, some very important companies were created and they are now giants in the industry and in absolute terms, including Alphabet. But don’t forget that Google competitor Yahoo! has suffered through material difficulties and it didn’t work out very well for investors. And there were many other one-time internet darlings that flamed out entirely.

If history is any guide, it will be very difficult to correctly select the few AI stocks that will end up winners. But there is one thing that every AI winner will need a lot of: electricity.

Plenty of electricity options when it comes to AI investing

Perhaps the safest way to play the AI electricity demand increase is with a regulated electric utility. Regulated utilities are granted monopolies in the areas they serve, so they have a pretty strong head start when it comes to supplying AI’s needs. But there are big and small utilities, so there are still different ways to play this angle.

For example, industry giant Dominion Energy (D 0.09%) has seen an 88% increase in interest from data centers for electricity in its Virginia based utility operations since just July 2024. Virginia happens to be an important hub for data centers, which also support AI. Dominion, which has a lofty dividend yield of 4.8%, is working through a business turnaround and its dividend has been static for a couple of years. Spiking electricity demand driven by AI could get the dividend back on the growth track. But you’ll be paid very well to wait even if the return to dividend growth takes a little while.

At the other end of the size spectrum is relatively small Black Hills (BKH 0.03%), which expects the earnings contribution from data centers, and AI, to more than double by 2028. At that point this single customer group should account for 10% or more of earnings. Black Hills has a yield of 4.4% but it happens to be a Dividend King, with more than 50 consecutive annual dividend increases under its belt.

Shifting gears a little, you could also look at Brookfield Renewable. This clean energy company owns assets across the renewable power spectrum, including hydroelectric, solar, wind, storage, and nuclear. It also has a globally diversified portfolio. Management expects to benefit from AI demand growth as companies increasingly look for clean power options. Brookfield Renewable’s yield is as high as 6.5% for the partnership share class and it isn’t limited by geography when it comes to supplying power to AI companies.

And then there’s a company like NuScale Power (SMR 4.08%), which is looking to produce small-scale modular nuclear reactors. It hasn’t actually sold one yet, but for more aggressive investors its technology is very interesting and perfectly suited to AI. Essentially, a small nuclear reactor could be placed right next to the AI data center that needs the power. It has a speed to market advantage that could make it an attractive partner for AI companies. But, as a start-up, it isn’t making money right now and doesn’t pay a dividend.

Play it safe or take on a little more risk, electricity demand is key for AI

Clearly, there is a huge spectrum of investment options when it comes to supporting AI with the electricity it needs. The safest way to play this is going to be regulated utilities, but they aren’t the only way. Brookfield Renewable provides a clean energy angle and NuScale is a direct way to invest in the nuclear industry in a way that may benefit greatly from AI’s demand for electricity. Dividend investor or growth investor, there’s likely to be an electricity option that will meet your investment needs around AI here.

If you have extra cash sitting in a traditional savings or checking account, you could be missing out on free money.

High-yield savings accounts (HYSAs) offer interest rates around 10 times most traditional bank accounts, helping your money grow while still keeping it safe and accessible.

So, what kind of returns can you expect if you park $5,000 in a high-yield savings account? Let’s break it down.

How much interest can you earn with $5,000?

The amount you earn depends on the annual percentage yield (APY) your bank offers. The national average is 0.41%, according to the FDIC. But high-yield savings accounts currently earn rates ranging from 3.70% to 4.50%.

Our Picks for the Best High-Yield Savings Accounts of 2025

American Express® High Yield Savings Member FDIC. APY 3.70% Rate info 3.70% annual percentage yield as of March 24, 2025. Terms apply. Member FDIC.	3.70% Rate info 3.70% annual percentage yield as of March 24, 2025. Terms apply.	$0
CIT Platinum Savings Member FDIC. APY 4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY Min. to earn $100 to open account, $5,000+ for max APY Member FDIC.	4.10% APY for balances of $5,000 or more Rate info 4.10% APY for balances of $5,000 or more; otherwise, 0.25% APY	$100 to open account, $5,000+ for max APY
Capital One 360 Performance Savings Member FDIC. APY 3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening. Member FDIC.	3.70% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Feb. 6, 2025. Rates are subject to change at any time before or after account opening.	$0

Here’s how your $5,000 could grow over time at different interest rates: