Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Stock Market»2 High-Yield Dividend Stocks That Could Shine in 2025
    Stock Market

    2 High-Yield Dividend Stocks That Could Shine in 2025

    July 27, 20244 Mins Read


    With interest rates expected to decline, high-yield dividend stocks offer attractive income potential and possible capital appreciation.

    Dividend investing has long been a popular strategy for generating passive income and building long-term wealth. High-yield dividend stocks, in particular, can offer attractive returns to investors seeking regular cash flow from their portfolios. These stocks typically pay out a higher percentage of their earnings as dividends compared to the broader market average.

    Recent economic indicators suggest that interest rates may soon decline, potentially making high-yield dividend stocks even more appealing. As bond yields fall, income-seeking investors often turn to dividend-paying equities as an alternative source of cash flow. This shift can drive up demand for high-yield stocks, potentially leading to capital appreciation on top of the dividend income.

    A yellow sign that reads high yield low risk.

    Image source: Getty Images.

    Armed with this background, here is a breakdown of two high-yield dividend stocks that may be worth adding to your portfolio soon.

    An undervalued high-yielder

    Pfizer (PFE 3.39%), a leading pharmaceutical company, presents an intriguing income opportunity given its substantial 5.58% dividend yield. The drugmaker’s rather modest forward price-to-earnings (P/E) ratio of 12.8 also indicates that its stock may be undervalued at current levels.

    This view is echoed by Wall Street analysts, who project Pfizer’s shares are trading at a mere 10.2 times 2026 projected earnings — a notable bargain within the typically premium-priced pharmaceutical industry. Eli Lilly, for instance, trades at nearly 32 times 2026 projected earnings.

    Perhaps most importantly, the pharma titan’s dividend appears to be sustainable, as evidenced by its trailing-12-month payout ratio of 68.2%. In other words, the drugmaker’s earnings comfortably cover the dividend distribution, which is a critical feature for long-term income investors.

    Lastly, Pfizer’s diverse pipeline of innovative drugs and vaccines positions it well to not only sustain its substantial yield but also to continue its recent pattern of dividend growth. Over the past five years, the company has boosted its dividend by an average of 3.1%, which is well above average for a company paying a yield north of 5% (author’s data).

    Given Pfizer’s solid financial footing, attractive valuation metrics, and promising product pipeline, it stands out as a potentially rewarding option for income-focused investors seeking both yield and growth potential in the pharmaceutical industry.

    This high-yielder is a top contrarian pick

    Bristol Myers Squibb (BMY 11.44%), another tier 1 pharmaceutical company, offers a healthy 5.3% dividend yield. And like Pfizer, Bristol’s shares trade in bargain territory at just 7.24 times 2026 projected earnings.

    The drugmaker’s stock is cheap based on this valuation metric — compared to both its pharmaceutical peer group and the U.S. stock market at large — due to concerns about its upcoming bout with the patent cliff. A whopping 63% of the company’s current revenue is at risk from patent expires this decade, according to analysts at Morgan Stanley.

    Aside from its attractive valuation, Bristol Myers Squibb’s modest payout ratio of 59.8% is also a big plus for long-term investors. This fairly low payout ratio for a big pharma stock suggests the dividend is sustainable.

    While the drugmaker does have work to do to safely navigate the forthcoming loss of exclusivity for key growth drivers like cancer medication Opdivo, its robust pipeline and spate of recent acquisitions should drive notable levels of growth and dividend increases over the long haul.

    The crux of the matter is that Bristol Myers Squibb is a proven commodity in terms of product innovation and shareholder value creation. Buying shares when market sentiment is at its nadir could prove to be a shrewd investment decision.

    Key takeaways

    Research has shown that dividend yields are strong predictors of stock returns over longer time horizons (more than 20 years). And while trying to time the market is never a wise idea, it may be an ideal time to stock up on high-yield equities due to the anticipated rate cuts by the central bank.

    Pfizer and Bristol Myers Squibb sport yields north of 5%, appear to be severely undervalued relative to their long-term earnings potentials, and operate in an industry that’s expected to benefit from the aging global population over the next two decades. As such, these two stocks stand out as top vehicles to play a possible rally in high-yield dividend stocks.

    George Budwell has positions in Pfizer. The Motley Fool has positions in and recommends Bristol Myers Squibb and Pfizer. The Motley Fool has a disclosure policy.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    North Korea unveils ‘unique technology’ in new air defence missile test

    Stock Market

    Dow, S&P 500, Nasdaq futures hold near records after surge with Nvidia earnings in focus

    Stock Market

    Sensex Today | Stock Market LIVE Updates: Nifty heads into truncated week as Trump tariff deadline looms

    Stock Market

    Sequins, feathers… and a groundbreaking arrest using facial recognition cameras: The Daily Mail sees police deploy slick new technology at Notting Hill Carnival

    Stock Market

    ThingX Technology Launches Nuna Pendant This 2025Q3: The World’s First AI Emotion-Tracking Pendant

    Stock Market

    The Motley Fool: Invest in diversified dividends

    Stock Market
    Leave A Reply Cancel Reply

    Top Picks
    Investments

    JPMorgan Raises $9 Billion of Bonds in Post-Earnings Spree

    Commodities

    de possibles baisses de production dans le nucléaire dès lundi

    Commodities

    South America Commercial Greenhouse Market Forecasts 2024:

    Editors Picks

    Performances & Cotations, Cours QTZC.F Bourse OTC Markets

    April 18, 2025

    pourquoi Klarna opère un grand rétropédalage

    May 12, 2025

    Sun Silver enregistre une interception record de teneur en équivalent argent lors de forages au Nevada ; l’action grimpe de 10 %

    July 1, 2025

    Taux : vague de ‘risk-off’, seuls les T-Bonds US en profitent – 10/03/2025

    March 10, 2025
    What's Hot

    ‘Worst hack in history’ as $1.5bn in cryptocurrency stolen | Money News

    February 22, 2025

    Un système de recharge électrique économique et écologique, c’est possible ?

    February 18, 2025

    Sensex Today | Stock Market LIVE Updates: Nifty holds 23,650, Kotak Mahindra Bank, NTPC top gainers

    March 24, 2025
    Our Picks

    Medieval Buckinghamshire Abbey up for sale

    July 19, 2024

    Wall Street’s Most Accurate Analysts Spotlight On 3 Defensive Stocks Delivering High-Dividend Yields – Altria Group (NYSE:MO), WK Kellogg (NYSE:KLG)

    June 30, 2025

    BPA-free, glass, and metal – the top 3 toxin-free coffee makers recommended by a trained barista

    August 13, 2025
    Weekly Top

    Holo closes $22mln funding round to scale regional fintech

    August 25, 2025

    More than 50 percent of Hongkongers plan to work past retirement age

    August 24, 2025

    FLEX Commodities Hires Senior Trader in Greece

    August 24, 2025
    Editor's Pick

    Bengaluru-based fintech firm Velocity announces Rs 400 crore fund

    August 26, 2024

    UK’s coin maker turning e-waste into gold

    August 7, 2024

    Tout comprendre à la nouvelle étiquette énergie des smartphones

    June 20, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.