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These 3 Dividend Stocks Yield More Than 6% and Their Payouts Look Safe
PfizerPfizer(US:PFE) The Motley Foolยท2025-05-20 07:50

Core Viewpoint - High dividend yields do not always indicate high risk; some stocks can be undervalued despite high yields [1][2] Group 1: Pfizer - Pfizer offers a dividend yield of 7.5% but has faced bearish sentiment due to declining revenue from its COVID vaccine and multiple patent expirations [4][5] - The stock has decreased over 35% in the past five years, raising concerns about future growth [4] - Despite uncertainties, Pfizer generated $11.2 billion in free cash flow over the last 12 months, with dividend payments totaling $9.6 billion, indicating a manageable dividend [5][6] - The stock trades at less than 8 times estimated future profits, providing a margin of safety for patient investors [6] Group 2: Verizon Communications - Verizon has a dividend yield of 6.2% but has seen a negative return of 21% over the past five years due to rising interest rates and economic concerns [8] - The company lost 289,000 wireless subscribers in Q1 2025, significantly worse than Wall Street's expectations [9] - Verizon's dividend payout ratio is 64% of its earnings, suggesting stability in its ability to maintain dividend payments despite recent performance [11] Group 3: Telus - Telus has the highest dividend yield on the list at 7.6% and has seen a modest decline of 3% over the past five years [12] - The company reported operating revenue of 5 billion Canadian dollars, reflecting a 3% year-over-year growth [12] - Telus generated CA$488 million in free cash flow, a 22% increase year-over-year, and has recently raised its dividend by 7% [13] - The company expects to continue increasing its dividend annually by 3% to 8% until the end of 2028, making it a stable long-term investment [13][14]