Matt DiLallo, Neha Chamaria, and Reuben Gregg Brewer, The Motley Fool

Sun, May 25, 2025, 3:07 PM5 min read

• Buy Dominion Energy for the 4.8% yield; keep it for the unfolding turnaround.

• Western Midstream Partners pays a monster cash distribution.

• The recent drop in Chevron's stock price is a solid buy opportunity.

• 10 stocks we like better than Dominion Energy ›

Buying dividend stocks is one of many ways to generate passive income. Many companies offer attractive yields that are much higher than the S&P 500's average, which is currently below 1.5%.

Dominion Energy (NYSE: D), Western Midstream Partners (NYSE: WES), and Chevron (NYSE: CVX) stand out to a few Fool.com contributors for their higher dividend yields. Here's why they believe these stocks are great options for those seeking ways to boost their passive income.

Reuben Gregg Brewer (Dominion Energy): Some turnarounds are very risky, with companies working back from the brink of financial disaster. Then there are the turnarounds like the one Dominion Energy is undertaking. Dominion is basically a well-run utility that got over its skis because of an overly complicated business model.

It has been slimming down by selling assets such as pipelines and natural gas utilities. Now it is largely just a regulated electric utility operating in attractive regions. That makes the 4.8% yield on offer fairly attractive, noting that the average utility yields only around 2.9%.

Investors can buy for the yield, with management stating clearly that the dividend is safe at current levels as the turnaround progresses. What the dividend isn't doing, however, is growing. That will be a problem for some income-focused investors and really highlights the current turnaround effort.

Dominion is currently working on strengthening its financial position and trimming its payout ratio so that it's more in line with industry peers. Essentially, the heavy lifting here is on the balance sheet. Progress is being made, but it will probably take at least another few years before dividends are reliably growing again because the payout ratio remains elevated. But with earnings projected to grow between 5% and 7% a year, that, too, will change for the better in time.

A payout ratio below 70% will likely be a major dividend turning point. Meanwhile, while you wait for dividend growth to resume, you get to collect that well-above-average yield, which seems like a reasonable trade-off.

Matt DiLallo (Western Midstream Partners): Western Midstream Partners is a master limited partnership (MLP) that owns and operates midstream assets that gather, process, and transport oil and natural gas for energy companies, including its parent company, Occidental Petroleum. Most of its assets generate stable fee-based cash flows, which support a cash distribution that yields nearly 9.5%.