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3 High-Yield Dividend Stocks to Buy in August 2025 and Hold Through at Least 2030

3 High-Yield Dividend Stocks to Buy in August 2025 and Hold Through at Least 2030

Author:
foolstock
Published:
2025-08-21 22:45:00
20
2

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An asphalt road with “2025,” “2026,” “2027,” “2028,” and other years painted on the road heading in the direction of a rising sun.

Image source: Getty Images.

The new tariff landscape suits this high-yield stock

Household appliance company Whirlpool cut its dividend recently, so don't be fooled by its trailing dividend yield of 8.2%. The new dividend is an annualized $3.60 per share, which still gives the stock an annual yield of 4.2% based on the price at the time of this writing.

That's still a very attractive payout for income-seeking investors. But the investment case for the stock isn't just based on income; it rests on the idea that the new tariff landscape will fundamentally alter the playing field in Whirlpool's favor.

It's a somewhat nuanced argument right now, because Whirlpool is suffering intense price competition as Asian competitors preloaded the market in the first and second quarters ahead of any tariff actions, and also when the TRUMP administration paused the implementation of higher rate tariffs in April.

But here's the thing. WOULD Whirlpool's foreign competitors have rushed to export products to the U.S. if the new tariff regime wasn't going to disadvantage them? Moreover, while the tariff landscape is dynamic and evolving, every indication suggests the administration will favor U.S.-manufactured products. Whirlpool (which manufactures 80% of U.S. sales in the U.S.) is ideally placed to benefit.

Foreign competitors can respond by increasing manufacturing in the U.S., but likely without the cost advantages they previously had over Whirlpool, and that might be enough to trigger long-term expansion of market share for the company.

Big Blue can provide big passive income

When looking for compelling passive income plays, the tech sector usually isn't the first place investors will rush to. Yet those who find themselves looking to procure more prodigious passive income have a great opportunity with IBM stock right now. Shares of the tech powerhouse currently provide an attractive -- and sustainable -- 3.5% forward dividend yield.

While energy and utility stocks may be the usual suspects for high-yield, reliable dividends, IBM certainly fits the bill, having logged 29 years of consecutive dividend increases. That's no small feat considering how tech companies often reinvest available capital into the business to keep current with their offerings. IBM, however, is a monster at generating free cash flow. In fact, IBM produced its highest free-cash-flow margin ever in 2024 -- 20.2% -- and generated $12.7 billion in free cash flow.

This helps illustrate the allure of IBM's dividend. Not only does the stock offer a juicy high yield, it's also well sourced from ample free cash FLOW -- something that has been the case for over a decade now.

IBM Free Cash Flow Per Share (Annual) Chart

IBM Free Cash Flow Per Share (Annual) data by YCharts.

With the organic cash that it generates that isn't returned to investors, IBM is able to reinvest into the business, ensuring that it stays relevant in the modern tech space. For example, the acquisition of hybrid cloud provider Red Hat has helped IBM to strengthen its AI offerings, and the company's generative AI business remains strong.

Moreover, IBM has increased its generative-AI book of business -- basically a running total of active contracts and orders it has secured -- to $7.5 billion at the end of Q2 2025, after booking $1 billion alone in the first quarter of 2025. For a solid dividend opportunity that also provides AI exposure, IBM stock is a great opportunity today.

A reliable dividend stock with a high yield for value investors

It's been a rough year for Clorox investors, with the stock down 24.8% year to date at the time of this writing.  The sell-off isn't unwarranted, as Clorox continues to feel the pressures of strained consumer spending and cost inflation.

On July 31, the company reported its fourth-quarter and full-year fiscal 2025 results. Net sales came in flat, and earnings jumped for one-time factors, such as the divestiture of Clorox's Argentina business, pension settlement charges, soft comps due to Clorox's cyberattack, and the timing of its enterprise resource planning (ERP) transition. The ERP transition should help Clorox reduce its costs and become a more efficient company -- with results expected to show up in calendar year 2026.

Clorox expects ERP to hurt its 2026 results because retailers ordered ahead in fiscal year 2025 to prepare for inventory impacts during the transition. Specifically, Clorox expects retailers to go through their elevated inventories in fiscal 2026, reducing sales by 7 to 8 percentage points and earnings per share (EPS) by $0.85 to $0.95.

The rest of Clorox's business isn't performing well enough to offset these declines. The company's fiscal 2026 guidance calls for organic sales to fall 5% to 9%. So outside of the ERP transition, Clorox isn't meaningfully growing sales.

The company is in a multiyear transition period, but the good news is that it has already set weak expectations for the next 12 months. And those weak expectations are reflected in its languishing stock price.

The long-term investment thesis for Clorox is that the company's ERP transition will pay off and lead to higher margins and decent sales growth. In the meantime, the stock sports a 4.1% yield. And Clorox has raised its dividend for 48 consecutive years -- an impressive track record.

Even when factoring in the ERP hit to fiscal 2026 earnings, Clorox is still guiding for $5.60 to $5.95 in diluted EPS. Based on the midpoint of that guidance and the stock price of $122.17 at the time of this writing, Clorox would have a forward P/E ratio of just 21.2. So even with a significant earnings hit, the stock still looks fairly inexpensive.

Now is a great time for income investors with an investment time horizon that goes out to at least 2030 to scoop up shares of Clorox while they are out of favor. The company's near-term results will look a little wonky, but management's efforts to improve the underlying business and position its products to take market share across categories are the right long-term move.

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