7 dividend stocks that can still compete with 5% bond yields

Income investors suddenly have more competition for their money.

US Treasury yields have surged again, with the 10-year approaching 5% as markets contend with sticky inflation, higher oil prices, heavy government borrowing and renewed expectations of a Fed hike. Rising yields are also becoming a global story, tightening financial conditions well beyond the US.

That raises an important question for dividend investors:

If relatively safe government bonds can offer close to 5%, what should investors demand before taking equity risk for income?

A high dividend yield alone is not enough. The payout needs to be supported by cash flows, ideally have room to grow, and offer something bonds cannot—whether that is earnings growth, inflation protection or the potential for capital appreciation.

Here are seven global stocks that offer different ways to approach the new income hurdle.

1. Verizon: high yield backed by recurring cash flows

Indicative yield: around 5.5%

Verizon remains one of the higher-yielding large US defensive stocks. Its current quarterly dividend is $0.7075 per share, up from $0.69 previously, continuing a long history of gradual dividend increases.

The attraction is relatively predictable subscription revenue combined with a yield already above most large US equities.

What to watch: free cash flow, debt reduction and competitive pressure in wireless.

2. Pfizer: a 6% yield, but with more questions attached

Indicative yield: around 6%

Pfizer offers one of the highest yields on this list. The company currently pays $0.43 per quarter, or $1.72 annually, equivalent to roughly a 6% yield at recent prices. It has also paid 351 consecutive quarterly dividends.

But this is also a useful reminder that high yield can reflect investor concerns. Pfizer continues to work through its post-pandemic earnings reset, patent expiries and the need for newer products to drive growth.

What to watch: pipeline execution, oncology growth, cost savings and whether earnings can sustainably cover the payout.

3. BNP Paribas: European banking income

Indicative yield: around 5%

European banks remain interesting for income investors because many combine relatively high payouts with earnings that can remain supported if rates stay elevated.

BNP Paribas provides diversified exposure across corporate banking, markets and European retail banking rather than relying on a single source of earnings.

The bigger question is whether higher yields remain supportive or eventually become restrictive enough to weaken credit growth and asset quality.

What to watch: net interest income, loan losses, capital returns and European growth.

4. AXA: dividend growth plus higher reinvestment yields

Indicative yield: around 5%

Insurance offers a slightly different way to approach higher rates.

AXA's dividend has increased from €1.43 in 2020 to €2.32 for 2025, with the latest payout rising from €2.15 the previous year.

Insurers can also benefit over time as maturing bonds are reinvested at higher yields, provided underwriting performance remains sound.

That combination of income today plus potentially stronger investment income tomorrow makes insurers particularly interesting in a higher-for-longer environment.

What to watch: underwriting margins, investment income, solvency ratios and catastrophe losses.

5. Sanofi: lower yield, stronger dividend history

Indicative yield: around 5+%

Sanofi does not offer the highest current yield, but its dividend record stands out.

Its 2026 dividend increased 5.1% to €4.12 per share, marking the 31st consecutive annual increase.

That puts Sanofi in a different category from a stock such as Pfizer. Investors are accepting a somewhat lower current yield in exchange for a stronger history of dividend growth and exposure to healthcare earnings that are less tied to the economic cycle.

What to watch: drug launches, pipeline execution and whether earnings growth keeps pace with dividend increases.

6. Eni: income with an oil-price kicker

Indicative yield: around 4.5%

Energy stocks offer something bonds do not: the potential for cash flows to rise with commodity prices.

Eni plans to pay €1.10 per share for 2026, up 5% from last year, and recently more than doubled its original share-buyback plan to €3.4 billion following stronger results.

There is also a particularly timely feature. Eni's shareholder-return framework allows for additional distributions when oil, gas or refining margins materially exceed its assumptions.

With oil prices elevated again amid Middle East tensions, that makes Eni a more macro-sensitive income name.

What to watch: Brent prices, refining margins, production growth and whether elevated energy prices persist.

7. DBS: Singapore's income anchor

Indicative total distribution yield: around 4%

DBS provides the Singapore component of the list.

The bank currently pays a S$0.66 quarterly ordinary dividend plus a S$0.15 quarterly capital-return dividend, taking the annualised distribution to S$3.24 per share.

Its dividend story has strengthened significantly in recent years, supported by strong earnings and excess capital. Higher rates can help banking profitability, although the benefit becomes less straightforward if funding costs rise or growth slows sharply.

What to watch: net interest margins, fee income, credit costs and the sustainability of excess-capital returns.

Not all dividend yields are equal

A stock yielding 6% because its earnings are deteriorating can be less attractive than one yielding 4% with growing cash flows and a rising dividend.

Likewise, investors should compare total return potential and risk, not simply the headline yield.

What could go wrong?

Dividend equities carry risks that government bonds do not.

• Dividends are not guaranteed. Companies can reduce or suspend payouts.
• Share prices can fall, potentially more than offsetting the income received.
• Higher yields can hurt leveraged companies by increasing refinancing costs.
• Banks and insurers face credit and balance-sheet risks if higher rates eventually trigger a downturn.
• Energy dividends depend partly on commodity prices, which can reverse quickly.
• High yields can be warning signals. Pfizer's elevated yield, for example, comes alongside significant earnings and pipeline uncertainty.
• Currency matters. Investors buying European, US or Singapore shares may face FX moves in addition to equity risk.

There is also a broader macro risk: the best environment for these stocks is arguably high but orderly yields. A disorderly bond selloff that pushes borrowing costs sharply higher could hurt equity valuations across the board.

The 5% bond test

The return of high sovereign yields does not make dividend investing obsolete.

It simply raises the hurdle.

For income stocks to justify taking equity risk, investors may increasingly want at least one of three things:

• A genuinely high and sustainable yield
• A credible history of dividend growth
• Earnings that can benefit from the same macro forces pushing bond yields higher

With government bonds once again offering meaningful income, dividend investors can afford to become much more selective.