Some investors are skeptical of companies with high dividend yields, since it sometimes signals that the dividend may be unsustainable. However, plenty of high-yield dividend stocks look solid enough to maintain, and even increase their payouts regularly from here on out.
That said, let's consider three stocks yielding well above 4% that income-oriented investors should consider: Pfizer (PFE 1.35%), Bristol Myers Squibb (BMY 1.49%), and Medical Properties Trust (MPW +3.93%).
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Pfizer: 6.7% forward yield
Pfizer, a leading drugmaker, has struggled in recent years. But the pharmaceutical giant is slowly turning the tide. The company has expanded its pipeline, especially in oncology, and should see significant clinical progress over the next few years.
We can expect Pfizer to launch important brand-new medicines that will help it boost sales and overcome patent cliffs. Meanwhile, the drugmaker has been steadily cutting costs, partly through artificial intelligence (AI) initiatives.
NYSE: PFE
Key Data Points
The healthcare specialist also signed an agreement with the current U.S. presidential administration that will make it exempt from tariffs in exchange for slashing the prices of some of its medicines in the country. Pfizer won't see a massive rebound overnight, but it's on the right track. Patient income seekers can safely get this stock.
Bristol Myers Squibb: 4.6% forward yield
Bristol Myers Squibb is in a similar boat. Financial results have suffered due to patent cliffs and rising competition. The good news is that this pharmaceutical giant has a large portfolio of newer medicines it has launched over the past few years. Some of these are already contributing meaningfully to the company's sales.
NYSE: BMY
Key Data Points
What's more, some will also earn label expansions. And although there are more patent cliffs ahead, the healthcare giant looks ready, particularly thanks to the approval of a subcutaneous formulation of its blockbuster medicine, Opdivo. The therapy is set to lose patent exclusivity in the next few years, but the subcutaneous version will maintain exclusivity, help smooth out losses, and contribute to top-line growth into the next decade.
Bristol Myers Squibb is still making solid pipeline progress and should soon launch newer products. The stock is still a solid buy for dividend investors.
Medical Properties Trust: 7.1% forward yield
Medical Properties Trust faced significant challenges as one of its largest tenants filed for bankruptcy. The company's financial results worsened, and it even had to cut its dividends -- twice. But Medical Properties Trust has done a great job of putting all that in the rearview mirror.
The healthcare-focused REIT added several new tenants to replace the old one, a move that diversifies its portfolio and makes its business less prone to severe challenges if one or two tenants default on rent.
NYSE: MPW
Key Data Points
Medical Properties Trust also worked on refinancing its debt to give itself more financial breathing room. The company isn't completely out of the woods, but with an improving business and better prospects than it did two years ago, it is an intriguing play for income investors.
