When compared to other asset classes, nothing holds a candle to the average annual return delivered by stocks over long periods. But this doesn't mean all stocks or strategies are alike.
Among the various ways investors can grow their wealth on Wall Street, few have been consistently more successful than buying and holding high-quality dividend stocks.
Companies that pay a regular dividend to their shareholders often have a few things in common:
- They're almost always profitable on a recurring basis.
- They're time-tested and have demonstrated their ability to navigate challenging economic climates.
- They're capable of providing Wall Street and investors with transparent long-term growth outlooks.
Image source: Getty Images.
But perhaps the most important aspect of dividend stocks is their historical outperformance. In The Power of Dividends: Past, Present, and Future, the researchers at Hartford Funds, working in collaboration with Ned Davis Research, calculated the average annual return of dividend stocks from 1973-2024. What they found was a stark annualized return outperformance for the income payers (9.2% annualized) when compared to the non-payers (4.31% annualized).
The great news for investors is that phenomenal deals can be had right now among ultra-high-yield dividend stocks -- those with yields four or more times greater than the current 1.13% yield of the S&P 500. What follows are three magnificent dividend stocks, sporting an average yield of 8.5%, which can be bought with confidence in November.
Sirius XM Holdings: 5% yield
The first ultra-high-yielding stock that can be purchased hand over fist in November is none other than satellite-radio operator Sirius XM Holdings (SIRI +0.79%), which is currently doling out a 5% annual yield to its shareholders.
NASDAQ: SIRI
Key Data Points
One of the biggest competitive advantages for Sirius XM is that it operates as a legal monopoly. Although it's still fighting for listeners with terrestrial and online radio operators, it's the only company that holds satellite radio licenses. This affords Sirius XM a level of subscription pricing power that online radio operators typically can't match.
But perhaps the bigger dividing line that helps set Sirius XM apart is its revenue mix. Most traditional radio operators generate the bulk of their revenue from advertising, which works well when the U.S. economy is firing on all cylinders but can be problematic when economic downturns arise and businesses pare back their marketing budgets.
Through the first nine months of 2025, 20% of Sirius XM's net sales have come from ads, with the lion's share (76%) of its net revenue tracing back to subscriptions. Whereas businesses are quick to pare back their ad spending at the first hint of economic unrest, subscribers are far less likely to cancel their service. This makes Sirius XM's operating cash flow highly predictable year after year.
Opportunistic investors can also snag shares of Sirius XM at a historical discount. At its current forward price-to-earnings (P/E) multiple of 7, Sirius XM is valued 45% below its average forward P/E over the last half-decade.
Image source: Getty Images.
Pfizer: 7% yield
A second magnificent ultra-high-yield dividend stock that's begging to be bought in November is pharmaceutical titan Pfizer (PFE +0.62%), which is currently sporting an impressive 7% annual yield.
As I've pointed out in the past, Pfizer is a victim of its own success. Sales skyrocketed in 2022, thanks in part to its dynamic duo of Comirnaty and Paxlovid, which are COVID-19 treatments. Between 2022 and 2024, sales of this duo fell from north of $56 billion to just $11 billion. As we've moved further away from the height of the pandemic, sales projections for Comirnaty and Paxlovid have continued to taper.
But it's a completely different story if investors examine Pfizer's growth since the decade began. The inclusion of sales from the company's COVID-19 therapies, coupled with organic growth from existing drugs, as well as the introduction of new therapies, has led to greater than 50% sales growth from 2020 through 2024. Eventually, Wall Street is going to wake up and reward this growth, once it can look past the recent sales slump in COVID-19 therapy sales.
NYSE: PFE
Key Data Points
Pfizer's acquisition of cancer-drug developer Seagen for $43 billion in December 2023 should also be impactful. This deal meaningfully expands Pfizer's oncology pipeline, provided an immediate boost to cancer-drug sales, and will lead to billions of dollars in cost synergies, which adds to the operating efficiencies the company was already recognizing.
To keep with theme, Pfizer's historical cheapness makes it highly attractive. Pfizer's forward P/E of 7.8 represents a 22% discount to its average forward earnings multiple over the trailing-five-year period.
PennantPark Floating Rate Capital: 13.5% yield
Last but certainly not least, supercharged ultra-high-yield dividend stock PennantPark Floating Rate Capital (PFLT +0.06%) makes for a stellar buy in November. PennantPark is a monthly dividend payer that's currently yielding a hearty 13.5%.
PennantPark is a business development company (BDC), which is a type of business that invests in generally unproven/developing companies, known as "middle-market businesses." Though it does hold a shade over $240 million in various preferred and common stock, the bulk of the company's investment portfolio ($2.16 billion) is tied up in debt securities. This means PennantPark is predominantly a debt-focused BDC.
NYSE: PFLT
Key Data Points
The clear-as-day advantage of being a debt-driven BDC is the yield that can be generated on loans. Most middle-market companies have limited access to basic financial services, which means lending rates prove highly favorable for PennantPark. As of the end of June, its weighted average yield on debt investments totaled 10.4%, or more than double the yield of long-term U.S. Treasury bonds.
The not-so-secret sauce to PennantPark Floating Rate Capital's success is given away by its name. Approximately 99% of its $2.16 billion in loans sport variable rates. When the Federal Reserve aggressively raised interest rates from March 2022 to July 2023, it sent PennantPark's weighted average yield on its loans considerably higher. Even with the Fed now in a rate-easing cycle, the slow and telegraphed nature of these monetary policy moves has allowed PennantPark to maximize its investment portfolio for gains.
As should be no surprise, PennantPark Floating Rate Capital is also a phenomenal bargain. The shares of publicly traded BDCs typically hover very close to their book value. Shares of PennantPark are currently trading at a 17% discount to its book value in the June-ended quarter, which marks an opportune time for investors to pounce.
