If you see a stock that pays 6% in dividends, you might assume it’s too risky — but that’s not always the case. In some situations, a yield can grow to such heights because investors have been dumping the stock. This can occur due to concerns around a company’s business, including poor financial results.
It’s not a good idea to assume that a high-yielding dividend always means that a reduction in the payout is inevitable. An assumption like that could result in an investor missing out on some great dividend income.
There are instances where high-yielding stocks can simply be great deals. Three stocks that pay at least 6% and don’t look risky right now are Pfizer (PFE 2.41%), Verizon Communications (VZ 0.47%), and Telus (TU 0.63%).
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Pfizer: 7.5%
Investors have been bearish on Pfizer in recent years. The big question why centers around how the business can grow as it’s no longer generating huge amounts of revenue from its COVID vaccine. It’s also facing multiple patent cliffs on top drugs. As a result of this negativity and lack of optimism, the stock is down more than 35% over the past five years.
That’s a brutal performance for investors who expect to see gains in the long run. There’s uncertainty around how Pfizer will grow in the future. However, the company has been investing via acquisitions and bolstering its pipeline in recent years, and it can take time for those moves to pay off.
The company’s dividend still looks safe. In the trailing 12 months, Pfizer has generated $11.2 billion in free cash flow, and its dividend payments during that stretch totaled $9.6 billion.
Pfizer is still generating in excess of $60 billion in revenue per year, and its business is diverse. Even if you’re not thrilled by the company’s growth prospects, its dividend can be manageable, given its strong cash flow. With the stock trading at less than 8x Pfizer’s estimated future profits (based on analyst expectations), there’s an excellent margin of safety for investors who are willing to be patient.
Verizon Communications: 6.2%
Telecom company Verizon is another example of a business that hasn’t been a good long-term buy. Its five-year return is negative 21%. Rising interest rates and questionable economic conditions have weighed on investors’ hopes for the business.
Verizon’s financial results, while stable, haven’t inspired much confidence. The company blamed the government for some of its first-quarter woes, saying that the “efficiency work” led to a reduction in wireless accounts. Verizon lost 289,000 wireless subscribers in the first three months of 2025 — far worse than what Wall Street expected (166,400).
As with Pfizer, Verizon’s troubles are centering around how much growth the business can generate. But with the Federal Communications Commission (FCC) recently approving the company’s deal to acquire Frontier, Verizon may get back to growth in the not-too-distant future.
For dividend investors, the payout ratio is what’s important, and that looks solid. Verizon’s dividend is just 64% of its earnings, suggesting there are no serious concerns about the telecom company’s ability to keep its recurring payments going. Although Verizon’s stock returns haven’t looked great in recent years, it can still make for a good investment if your priority is dividend income.
Telus: 7.6%
Another telecom company to make this list is Canadian-based Telus. Its dividend of 7.6% is the highest yield on this list.
The stock declined a modest 3% over the past five years, as this company, too, has been an underwhelming long-term hold. Its operations, however, have been fairly stable. The company posted single-digit revenue growth in its most recent quarter (which ended on March 31), with operating revenue totaling 5 billion Canadian dollars, which was up 3% year over year.
Telus hasn’t been a growth beast in recent years but can provide your portfolio with a good dividend. In its most recent period, its free cash flow totaled CA$488 million and rose by 22% year over year.
The company also recently boosted its dividend, which is now 7% higher than it was this time last year. And it expects to continue to raise that dividend annually between a range of 3% and 8% until the end of 2028.
As a leading telecom provider in Canada, Telus can be a safe investment to hang on to for the long haul.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends TELUS and Verizon Communications. The Motley Fool has a disclosure policy.