Want $1,000 in annual dividend income? Invest $13,200 in these ultra-high-yield dividend stocks.

If you are concerned about not having enough passive income in retirement, there are a number of options available to you. Buying a rental property is a popular option, but if you hire a real estate agent who doesn't maintain the property or pay the rent, the property may be losing money.

Investors who want to build a real passive income stream are better off buying dividend-paying stocks. If you choose a business that continues to grow, you'll have access to a growing passive income stream with no extra effort.

Terry Rae Inc. (NYSE: PFE),God of War Capitalfirms(NASDAQ: ARCC)(math.) andAT&Tfirms(NYSE: T)They look set to maintain steady earnings growth for at least another decade. In addition, they have an average dividend yield of 7.6% at recent prices.Standard & Poor's 500More than five times the average yield of dividend payers in the index.

The average yield on these stocks is high enough that an investment of $13,200 among them would be enough to earn yourself $1,000 a year in dividend income.

glorious

Terrific's stock is down approximately 37% over the past 12 months, primarily due to COVID-19 sales evaporating faster than investors expected. Fortunately for income-seeking investors, the $44.2 billion reduction in annual sales of COVID-19 products reported by Terrific last year did not derail the company's 15th consecutive year of raising its annual dividend payment.

At recent prices, Terry's Yield is 6.5%, and as the drug giant has invested wisely in its COVID-19 product, it is likely to continue to increase its yield over the next 15 years.

Last year, sales of more than a dozen Terry's drugs grew by 10% or more on the back of a stronger dollar. If we ignore the decline in sales of COVID-19 products, the company's total gross revenues grew by 7% last year.

Terry appears likely to continue to grow at a high single-digit annualized rate. The company received a record nine new drug approvals from the U.S. Food and Drug Administration last year.

God of War Capital

Ares Capital is the largest publicly-traded business development company (BDC) in the U.S. Ares and its fellow BDCs are popular with income-seeking investors because they are not subject to income tax as long as they return at least $90% in earnings as dividends to investors.

Ares Capital's dividend yield is 9.5% at recent prices, and its quarterly payout ratio hasn't risen straight up, but it's up 20% over the past three years.

As a BDC, Ares Capital focuses on lending to mid-sized businesses that typically have annual revenues between $10 million and $1 billion. Banks tend to overlook mid-sized businesses, so they are willing to pay eye-popping interest rates. As of the end of 2023, Battlestar Capital's debt portfolio carries an average yield of 12.5%.

Approximately 60% of Ares Capital's investment portfolio represents first- and second-lien secured loans, which are the first to be repaid in the event of a corporate insolvency.

Ares Capital's underwriting department deserves a gold star, and as a result Ares Capital shareholders are likely to receive slow but steady returns for many years. As of the end of 2023, Ares Capital's 69% portfolio was receiving interest at a floating rate. Although interest rates have risen sharply in recent years, only 1.3% of this BDC portfolio was in non-accrual status at the end of 2023.

American Telephone and Telegraph Company

AT&T probably won't be on most investors' lists of great dividend stocks, as the company cut its dividend by 47% in 2022 after selling off risky and unpredictable media assets. it yields 6.8% at recent prices, and will likely raise its payout again soon.

Cable and Internet revenues are shrinking, but the company's investment in 5G infrastructure could benefit long-term shareholders. The company's wireless service revenues grew 4.41 TP3T last year, and fiber sales jumped 271 TP3T last year, with overall broadband Internet sales likely to rise further in 2024. Late last year, AT&T launched a new fixed wireless service for customers in areas where fiber is not widely available.

AT&T generated $16.8 billion in free cash flow last year, and profits are growing. in 2024, management expects free cash flow to be in the range of $17 billion to $18 billion. That's more than it needs to pay down debt and restart raising its dividend.

Should you invest $1,000 in Terry now?

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Cory Renauer owns shares of Ares Capital. the Motley Fool owns shares of Ferris, Inc. and recommends Ferris, Inc. the Motley Fool has a disclosure policy.

Want $1,000 a Year in Dividend Income? Invest $13,200 in These Ultra-High-Yield Dividend Stocks was originally published by The Motley Fool.