Hidden High Yielders

Have you ever read Safe Strategies for Financial Freedom by Van K. Tharp, D.R. Barton, and Steve Sjuggerud? It’s a little dated, and the book’s broad-brush approach means certain investment strategies won’t appeal to everyone, but overall it’s a solid read.

One section in particular really stuck with me…

And that’s the idea of sitting down and calculating your “Freedom Number.” This is the amount of monthly recurring passive income needed to finance your current lifestyle without lifting a finger to earn it.

As the authors explain, “Real wealth is owning assets other people pay you to own.”

Hitting your freedom number means having enough income-producing assets to give yourself greater control over your own destiny. You could quit working, if you wanted. You could pursue new hobbies. Or, you could radically redesign your lifestyle in ways you couldn’t before.

Of course, not all income-producing assets are equal.

This is especially true when it comes to dividend stocks. Many high-yielders — looking at you shipping industry — are either cyclical or unsustainable over the long-term.

Likewise, there are some terrific blue chip stocks that pay extremely low starting yields while offering ho-hum dividend growth. Take H.B. Fuller Company, for example. It has an extremely safe payout ratio and has raised its dividend every year for more than 50 years. However, with a starting yield of just 1.61%, you’d need to invest $1 million just to collect $16,000 in annual income.

With this in mind, here are three “secret high yielders” that offer blue chip stability while often paying 8% or more…

1. CompX International Inc. ($CIX)

A debt-free business with a 5-year compound annual dividend growth rate of 24.57% and a starting yield that routinely exceeds 10%?

CompX International Inc. is a relatively obscure business, but one that’s consistently delivered strong returns for its shareholders.

CompX manufactures locks and boat equipment. This may sound boring, but CompX actually has a secret moat. Many CompX products are made for the U.S. government. For example, CompX supplies the locks used on U.S. Postal Service mailboxes and makes aftermarket parts for U.S. military and government vessels.

Government contracts and a portfolio of essential-if-mundane products, like cabinet locks and keypads, make this a profitable business.

And since CompX has zero debt, the firm often rewards its shareholders with massive dividend raise or special distributions.

• In 2021, CompX raised its dividend by 50%.

• In 2022, it raised the dividend by 25% and paid a $1.75 per share special distribution.

• In 2024, it raised the dividend by 20% and paid a $2.00 special dividend.

• In 2025, it paid a $1.00 special dividend.

CompX also delivered a solid 10-year average annual total return of 12.24%. And bought on a dip, this stock often yields 10% or more thanks to its special distributions.

2. Enterprise Products Partners L.P. ($EPD)

Enterprise Products Partners L.P. is a midstream energy company. This is a firm that transports natural gas, oil, and petrochemicals. The company owns and operates pipelines, tanker trucks, and storage facilities.

Fossil fuels are unpopular investments. And, Enterprise Products Partners is a Master Limited Partnership (MLP).

Some investors dislike MLPs because of the Schedule K-1 tax form, which can be confusing depending on your financial situation. A dentist in California with 15 rental properties and a private practice generating $20 million a year in revenue will have a very different tax profile from someone in a low-tax state earning $60,000. For some investors, the form is a nuisance. But, as Peter Lynch explained more than 30 years ago:

“This is less of a nuisance than it used to be, because the investor relations department of the partnership fills in all the blanks. Once a year, you get a letter asking you to confirm how many shares you own and whether or not you bought additional shares.”

Enterprise Products Partners doesn’t pay special dividends, but it offers a 6.81% starting yield and has raised its dividend every year for 27 years. Additionally, due to the controversial nature of oil as well as the firm’s MLP structure, this stock trades at a price to earnings ratio of just 12.05.

3. Old Republic International Corporation ($ORI)

The most stable and blue chip stock on this list, Old Republic International Corporation is a consistent market-beater that often yields 8% or more thanks to special dividend payments.

Old Republic International Corporation is an insurance company. The firm writes specialty and title policies. A boring-but-profitable niche.

Old Republic has been in business for over 100 years. And the company has paid uninterrupted dividends 84 years. Old Republic has also raised its payout every year for 44 consecutive years.

In addition to regular dividend payments, Old Republic routinely issues special distributions. These often bump the firm’s yield on cost up to 8% or more.

For example, an investor who bought this stock on December 30th, 2024, would have paid $36.11 per share. By December 30th, 2025, this investor will have received $1.16 per share in total quarterly dividends plus a $2.00 per share special dividend.

In total, this investor will have received $3.16 per share, or an 8.75% starting yield.

Old Republic doesn’t pay a special dividend every year. But this is a market-beating investment that’s delivered a 10-year average annual total return of 16.63%. The firm also trades at a reasonably low price to earnings ratio of 13.67 while its quarterly dividend is backed by a respectable 5-year compound annual dividend growth rate of 6.46%.

Conclusion

Achieving financial freedom and living off dividends doesn’t require you to accumulate millions of dollars in Coca-Cola stock just to make ends meet. Nor do you have to chase high-yield covered call ETFs, speculative shipping companies, or other volatile and unpredictable assets.

There are blue-chip stocks like Old Republic that offer high starting yields thanks to their special distributions.

There are obscure companies with debt-free balance sheets, like CompX, that can reward shareholders with massive raises and one-time payouts.

And there are firms operating in sectors Wall Street views as “gross,” such as Enterprise Products Partners, that trade cheaply while offering a consistently high starting yield.

It’s always worth keeping an eye out for stocks like these, because even a small position in one or two quality high-yielders can provide you with a large and steady stream of recurring dividend income.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.