3 High Yield Stocks For Dividend Compounding

High yield securities are thought of primarily as income generators. Less attention is paid to their ability to compound income over time. There are three drivers for compounding income from any investment:

1. Reinvesting dividends
2. Dividend growth on a per share basis
3. The time over which the investment is held

The first compounding driver – reinvesting dividends – is especially powerful with high-yield securities. Higher yields mean that you can compound your income stream faster by reinvesting dividends.

There are many high yield securities out there. But it’s not as common for a high-yield security to pay rising dividends on a per share basis over time. When this happens, your income compounds, even when you don’t reinvest dividends.

The following 3 dividend stocks have high yields above 5%, and have steadily increased their dividends over time.

Sonoco Products Co. (SON)

Sonoco Products provides packaging, industrial products and supply chain services to its customers. The markets that use the company’s products include those in the appliances, electronics, beverage, construction and food industries.

The company generates over $5 billion in annual sales. Sonoco Products is now composed of 2 major segments, Consumer Packaging, and Industrial Packaging, with all other businesses listed as “All Other”.

On April 16th, 2025, Sonoco Products raised its quarterly dividend 1.9% to $0.53, extending the company’s dividend growth streak to 49 consecutive years.

On July 23rd, 2025, Sonoco Products announced second quarter results for the period ending June 29th, 2025. For the quarter, revenue grew 17.9% to $1.91 billion, which was in-line with estimates. Adjusted earnings-per-share of $1.37 compared to $1.28 in the prior year, but was $0.08 less than expected.

Revenues and earnings benefited from the addition of Eviosys. For the quarter, Consumer Packaging revenues surged 110% to $1.23 billion, mostly due to contributions from Eviosys. Volume growth was strong and favorable currency exchange rates also aided results. Industrial Paper Packing sales fell 2% to $588 million due to the impact of foreign currency exchange rates and lower volume following two plant divestitures in China last year.

SON has increased its dividend for 49 consecutive years and currently yields 5.2%.

Bristol-Myers Squibb (BMY)

Bristol-Myers Squibb is a leading drug maker of cardiovascular and anti-cancer therapeutics has annual revenues of about $46 billion.

On July 31st, 2025, Bristol-Myers announced second quarter results for the period ending June 30th, 2025. For the quarter, revenue inched higher by 0.6% to $12.3 billion, which was $890 million more than expected. Adjusted earnings-per-share of $1.46 compared unfavorably to $2.07 in the prior year and was $0.36 below estimates.

That said, EPS had favorable impact of $0.57per share related to an in-process research and development charge related to the company’s partnership with BioNTech.

U.S. revenues declined 3% to $8.5 billion. International grew 10% to $3.8 billion, but revenue grew 8% when excluding currency exchange. Eliquis, which prevents blood clots, grew 8% to $3.7 billion as U.S. growth was partially offset by changes in Medicare Part D related to legislation to lower drug prices.

Eliquis remains the top oral anticoagulant outside of the U.S. and generated more than $13 billion in revenue for 2024, which was a 9% increase from the prior year. Opdivo, which treats cancers such as advanced renal carcinoma, was higher by 7% to $2.6 billion due once again to global volume growth. Bristol-Myers provided revised guidance for 2025 as well. Adjusted earnings-per-share are now projected to be in a range of $6.35 to $6.65 for the year.

BMY has increased its dividend for 18 consecutive years and currently yields 5.3%.

Eastman Chemical (EMN)

Eastman Chemical is a global specialty materials company that produces a broad range of products found in items people use every day. It serves transportation, consumables, building and construction, animal nutrition, crop protection, energy, personal and home care, amongst other markets.

On November 3rd, 2025, Eastman Chemical reported its Q3 results. For the quarter, sales declined by 11% to $2.20 billion. Revenue decreased primarily due to a 10% lower sales/volume mix and a 1% lower selling price, reflecting weaker demand in consumer discretionary end markets and continued customer inventory reductions.

Additives & Functional Products sales fell 4%, Advanced Materials declined 7%, Chemical Intermediates declined 16%, and Fibers fell 24%. Adjusted EPS decreased by 50% to $1.14. Management emphasized strong execution on cash generation, delivering $402 million in operating cash flow (roughly in line with last year) supported by about $200 million in inventory reduction and continued cost-cutting efforts.

The company remains on track to achieve more than $75 million in net cost reductions this year and an additional $100 million in 2026. Despite the challenging macroeconomic and trade environment, Eastman continues to focus on cash flow discipline, structural cost reductions, and progress in its circular economy initiatives.

Looking ahead, management expects 2025 adjusted EPS between $5.40 and $5.65 and operating cash flow approaching $1 billion, aided by cost savings, stable pricing, and a ramp-up in Renew rPET volumes.

EMN has increased its dividend for 15 consecutive years and currently yields 5.3%.