1 High-Yield Dividend Stock Yielding Nearly 6% That's Safe to Buy -- and 1 Yielding Over 8% I Wouldn't Touch
2026-09-27 09:15
•Matt Dilallo •The Motley Fool
••••• •• Axe Cap view
A Safe 6% Yield vs. a Risky 8% in Energy Dividends
South African income investors should prefer sustainable dividends over tempting high yields with shaky credit.
High yields can be seductive, but they often mask risk. Take Enbridge (ENB) versus Delek Logistics Partners (DKL) as an example. ENB offers about a 6% dividend with a conservative payout ratio, diversified revenue mostly from regulated contracts, and an investment-grade credit rating. It’s a company that has grown dividends for over 30 years and consistently beats its financial targets. DKL, on the other hand, yields over 8%, but it sups from a junk credit rating, a payout ratio north of 70%, and heavy reliance on its parent company. For South African investors, the lesson is clear. If you want stable income, look for companies with strong balance sheets and proven dividend histories — much like how we value banks like Standard Bank or insurers such as Sanlam here on the JSE. Chasing yield in high-risk names is akin to picking rand hedge stocks when the dollar weakens: tempting but fraught with danger. this is just our opinion and not financial advice
Buy low-risk dividend payers like Standard Bank and Sanlam for steady income. Avoid high-yield but credit-risky firms like DKL. If exposure to energy is desired, watch Sasol’s dividend health before jumping in.
- ENB
- DKL
- Standard Bank
- Sanlam
- Sasol
- Credit deterioration at low-rated companies surprises investors
- Commodity price swings hit energy dividends and rand volatility
7/10
Enbridge (ENB) and Delek Logistics Partners (DKL) both offer high dividend yields of ~6% and >8% respectively. However, Enbridge is recommended as the safer choice due to its diversified business model, strong investment-grade credit rating, conservative payout ratio, and 31-year dividend growth streak. Delek Logistics, despite 54 consecutive quarters of distribution increases, carries higher risk due to junk-rated credit, higher payout ratios, and heavy dependence on its parent company Delek U.S. Holdings for earnings.
Our take is based on reporting first published by The Motley Fool.