Income-seeking investors tend to be drawn to high dividend yields. The higher the yield, the better a dividend becomes at generating income that can fund an investor's spending as well as beat inflation. A high yield from the dividend of a great company is highly sought after.

But not all dividend yields are high for good reasons. A rising yield can also be an indication of a falling stock price and an unhealthy business. The chance of a dividend cut tends to grow in relation to the rise in the yield.

There are plenty of stocks with competitive dividend yields worth serious consideration for investors. But they aren't always obvious at first glance. For instance, Pfizer (PFE 3.87%) and Gilead Sciences (GILD 0.45%), are two dividend payers whose stocks have lagged the market recently. Here's why these two high-yield dividend stocks are worth buying on the dip.

1. Pfizer

Despite appearances, Pfizer's business is not in trouble -- far from it. The company's share prices are down by 31% this year as the market continues to factor in the end of Pfizer's coronavirus vaccine tailwind. But the need for the vaccine (or its updated versions) may not be as over as some think. A recent surge in COVID-19 cases highlights the fact that we still have a need for products like Comirnaty and Paxlovid, Pfizer's coronavirus vaccine and treatment. The pandemic is also still ongoing in many countries around the world.

Still, it is unlikely the drugmaker will generate the outsized levels of revenue it did in 2021 and 2022 from these products. Pfizer management planned for this eventuality and used the excess revenue to set up a solid foundation for the future.

Some of the funds went toward acquisitions, including Seagen -- an oncology specialist with four approved products on the market -- for $43 billion in cash. However, Pfizer's management is even more attracted to Seagen's innovative potential. As CEO Albert Bourla said, "We are not buying the golden eggs. We are acquiring the goose that is laying the golden eggs."

Pfizer also entered into collaborations to help it uncover more gems. It recently announced a partnership with life sciences-focused venture capitalist Flagship Pioneering to discover and codevelop innovative medicines. Will this partnership yield positive results down the road? It's hard to say, but the most important thing is that Pfizer is casting a wide net.

At least some of the company's initiatives will be successful. And we are already seeing that play out. Pfizer said that in the 18 months starting in January of this year, it would record 19 new launches or major label expansions; some of these new approvals will be from relatively recent acquisitions.

Pfizer's business is just fine and should reward patient investors with rich dividends, literally. The company's yield currently stands at 4.64% -- the S&P 500's average is only 1.54%. Pfizer has paid out a dividend quarterly for at least 85 years and has raised its dividend annually for the past 13 years. Pfizer's payout ratio is about 31%, which is quite manageable and leaves plenty of room for additional growth. The drugmaker has also hiked its payouts by 4.6% annually in the past five years.

In short, Pfizer is an excellent stock for income-seeking investors focused on the long game.

2. Gilead Sciences 

Gilead Sciences' share prices are down 8% so far in 2023. The company also suffered from decreased sales from its coronavirus antiviral, Veklury. Sales of this medicine will continue to fluctuate along with coronavirus cases, so investors shouldn't pin Gilead Sciences' hopes on it. The good news is that the biotech remains a leader in the HIV market, its most important therapeutic area. Gilead Sciences is also making headway in oncology.

Let's first start with HIV, where Gilead Sciences markets products such as Biktarvy, Descovy for PrEP, and the newly approved Sunlenca. Biktarvy is the leading HIV regimen in the U.S. Descovy is one of the leaders in its field as well, and while Sunlenca has been approved for less than a year, it could quickly become an important growth driver for the company.

Sunlenca is the first six-month subcutaneous HIV medicine to be approved. It also has the potential to earn new indications, for instance, in the PrEP market and is currently undergoing late-stage studies to that effect. Gilead Sciences' HIV segment has arguably been its most exciting one, and given the company's existing portfolio and innovative potential, that should continue to be the case.

Meanwhile, Gilead Sciences' oncology sales grew rapidly thanks to medicines such as Trodelvy and Yescarta. The former seems particularly promising. Trodelvy first earned the green light in the U.S. in 2020; since then, it has earned three additional indications. There should be more on the way. Gilead Sciences' oncology pipeline features more than three dozen programs, 16 of which are in phase 3 studies. So expect new approvals and label expansions for Gilead Sciences in this area in the next few years.

The biotech will be just fine over the long run. Gilead Sciences' 3.96% dividend yield is higher than the S&P 500's average, while it has managed to increase its payouts by 6.3% annually over the past five years. The company began paying a dividend in 2015. And the company's 68% trailing-12-month payout ratio suggests there is room for more dividend hikes.

All this means dividend investors can't go wrong with this company.