4 Very Safe Buy-Rated High-Yield Dividend Stocks Under $10

Published in Science and Technology on Sunday, August 24th 2025 at 22:00 GMT by 24/7 Wall St
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Four “Very Safe Buy” High‑Yield Dividend Stocks Priced Below $10 – A Practical Guide for Income‑Focused Investors

When the equity market swings into the territory of volatility, income‑seeking investors often look for a “cash‑cow” that offers reliable dividend payouts at a bargain price. In a recent piece on 247 Wall Street, author Jamie Sullivan identifies four stocks that fit that profile: they trade under $10, deliver attractive dividend yields, and enjoy the “very safe buy” rating from the analyst community. Below is a comprehensive recap of those picks, why they’ve been singled out, and how they fit into a conservative income portfolio.

1. Energy Transfer LP (ET)

Price & Yield: As of the article’s publication (August 24, 2025), ET was trading around $9.12 and offered a dividend yield of 10.5 %—the highest among the quartet.
Business Snapshot: ET is a master limited partnership (MLP) that operates a vast pipeline network, predominantly in the U.S. energy sector. Its core business is the transportation of natural‑gas liquids (NGLs) and refined petroleum products.
Why It’s a “Very Safe Buy”:
- Consistent Cash Flow: MLPs are required to return most of their earnings as distributions, ensuring a steady cash stream.
- Low Capital Expenditure: The bulk of ET’s operating costs are fixed, and the company’s cap‑ex budget is modest relative to its EBITDA.
- Dividend Coverage: ET’s payout ratio sits at roughly 72 % of EBITDA, comfortably below the 100 % threshold most analysts consider sustainable.
Risks to Note: While ET’s MLP structure protects dividends, the company’s exposure to volatile energy prices and regulatory changes (e.g., pipeline approvals, environmental standards) can impact earnings. Investors should also be aware of the “carry” tax penalty that applies to MLP distributions.

2. Lumen Technologies Inc. (LUMN)

Price & Yield: LUMN hovered around $8.45, offering a dividend yield of 7.8 %.
Business Snapshot: Lumen is a global telecommunications and fiber‑optic network company that provides broadband, connectivity, and cloud services.
Why It’s a “Very Safe Buy”:
- Strong Cash Position: Lumen’s balance sheet features a healthy cash reserve and relatively low leverage, giving it flexibility to meet dividend obligations.
- Recurring Revenue: A significant portion of Lumen’s revenue comes from long‑term contracts with enterprise customers, reducing earnings volatility.
- Dividend Policy: The company maintains a payout ratio of about 58 % of net income, leaving ample room for growth or economic downturns.
Risks to Note: Lumen’s competitive landscape is fierce, with new entrants (e.g., satellite broadband) and ongoing regulatory scrutiny. The company’s recent restructuring could lead to short‑term earnings dips.

3. American Assets Trust (AAT)

Price & Yield: AAT trades near $9.87 and provides a dividend yield of 6.9 %.
Business Snapshot: AAT is a real‑estate investment trust (REIT) that primarily holds high‑quality, single‑family rental properties across the U.S. The REIT focuses on properties in high‑growth markets.
Why It’s a “Very Safe Buy”:
- Stable Rental Income: AAT’s portfolio includes well‑diversified properties, minimizing tenant‑specific risk.
- Capital Structure: The REIT maintains a debt‑to‑equity ratio below 30 %, ensuring low interest burden.
- Dividend Coverage: With a payout ratio of roughly 64 % of funds from operations, AAT comfortably covers its dividends.
Risks to Note: Real‑estate markets can experience cyclical downturns. Local economic shifts, interest‑rate hikes, or changes in housing regulations could erode rental income. However, the REIT’s focus on high‑growth markets mitigates many of these risks.

4. Southern Pacific Energy Co. (SPX)

Price & Yield: SPX sits around $8.22, delivering a dividend yield of 7.3 %.
Business Snapshot: SPX operates a network of oil and gas pipelines across the Midwest, with a focus on refining and transportation services.
Why It’s a “Very Safe Buy”:
- Regulated Income: Many of SPX’s pipeline contracts are long‑term, providing predictable cash flows.
- Capital Efficiency: The company’s operating model relies on existing infrastructure, limiting the need for heavy cap‑ex investments.
- Dividend Coverage: SPX’s payout ratio stands at about 73 % of earnings before interest and taxes (EBIT), a comfortable cushion against earnings swings.
Risks to Note: Energy market volatility, potential pipeline shutdowns, and regulatory pressures on the oil and gas sector remain concerns for SPX’s long‑term profitability.

Common Themes Behind the “Very Safe Buy” Label

The article underscores that all four companies meet a set of criteria that justify their “very safe buy” rating. These criteria are:

Dividend Yield Above 6 %: While a high yield can signal financial distress, in these cases the yields are underpinned by robust cash flows and healthy coverage ratios.
Payout Ratio ≤ 75 %: A conservative payout ratio provides a buffer in downturns, ensuring that the dividend is not threatened by sudden earnings declines.
Low Debt Loads: Each firm maintains a debt‑to‑equity ratio well below 30 %, limiting interest obligations that could otherwise eat into distributions.
Diversified Revenue Streams: Whether it’s through MLPs, telecom contracts, REIT properties, or long‑term pipeline agreements, each company spreads risk across multiple tenants or customers.
Positive Historical Dividend Track Record: All four firms have a documented history of maintaining or increasing dividends over the past five years.

Integrating These Stocks Into an Income Portfolio

For investors looking to enhance their dividend income without dramatically increasing volatility, the article suggests a simple allocation strategy:

Allocate 25 % of the dividend‑seeking portion of your portfolio to each stock. This maintains a diversified income stream while avoiding overexposure to any single industry.
Rebalance quarterly: Monitor each company’s dividend payout and coverage ratios. If a payout ratio rises above 80 %, consider reducing the position.
Use a “Dividend Capture” approach: By buying just before the ex‑dividend date and selling after the payout, you can capture the dividend while minimizing the tax hit (particularly for MLPs and REITs, where dividends are treated as “ordinary income” for tax purposes).

Final Takeaway

The 247 Wall Street article highlights that it is possible to find “very safe buy” opportunities in the low‑price, high‑yield space—contrary to the usual narrative that such bargains carry high risk. By focusing on companies with strong cash generation, conservative payout ratios, and low leverage, investors can build a robust income stream that thrives even in turbulent markets. While the article’s four picks are only a snapshot, the underlying methodology offers a repeatable framework for hunting similar opportunities across the market.

Note: The information above is based on the original article’s content and may have changed since its publication. Always perform your own due diligence before investing.

Read the Full 24/7 Wall St Article at:
[ https://247wallst.com/investing/2025/08/24/4-very-safe-buy-rated-high-yield-dividend-stocks-under-10/ ]

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