Three Dividend Stocks Yielding 5% to 11% to Scoop Up Now

Stability in a Volatile Market

In a volatile market, dividend stocks often provide a safer investment avenue for individuals seeking consistent and regular income streams. With growth stocks appealing for their potential to yield significant returns, dividend stocks, on the other hand, offer a cushion of stability during market tumult. Not all dividend stocks, however, are created equal. Certain companies stand out for their attractive yields and long-term growth prospects. Here, we will delve into three dividend stocks that merit investors’ attention right now.

1. Pfizer: Dividend Yield of 5.7%

With a market capitalization of **$164.8 billion**, Pfizer (PFE) is a household name in the pharmaceutical landscape, widely recognized for its pivotal role in developing the COVID-19 vaccine. However, the company boasts a broad and diversified portfolio spanning various therapeutic areas such as oncology, immunology, cardiovascular health, and rare diseases.

Year-to-date, Pfizer shares have gained a modest **0.5%**, contrasting sharply with the annual gain of **20.8%** in the S&P 500 Index. Regardless, its extensive lineup of blockbuster drugs—including Vyndaqel for treating nerve damage, Eliquis as an anticoagulant, and Ibrance for breast cancer—positions Pfizer favorably in both sales and future growth potential.

Moreover, Pfizer’s current dividend yield of **5.7%** exceeds the healthcare sector average of **1.6%**. The company has distributed approximately **$4.8 billion in cash dividends** during the first half of **2024** and has consistently raised its dividends over the last **15 years**. With an expected earnings growth of **44.2%** to **$2.65** per share in **2024**, followed by an additional **7.8%** in **2025**, Pfizer appears to have a sustainable payout ratio of **58.7%**.

Analysts maintain a “moderate buy” rating on Pfizer, highlighting that among the **21 analysts** covering the stock, **9** recommend it as a “strong buy.” The **average price target of $33.26** suggests an upside potential of **14.9%** from current prices, with a high target of **$45** implying a remarkable **55.5%** increase over the next year.

2. Walgreens Boots Alliance: Dividend Yield of 11%

Walgreens Boots Alliance (WBA) stands as one of the leading retail pharmacy chains globally, operating numerous locations selling prescription drugs, over-the-counter medications, and health products. Despite a staggering **65.6% drop** in its stock year-to-date, which starkly contrasts with overall market trends, Walgreens presents a compelling dividend yield of approximately **11%**, significantly higher than the consumer sector average of **1.8%**.

The past fiscal third quarter was challenging, with adjusted earnings dropping **36.6%** to **$0.63** per share. Nonetheless, the company managed to distribute **$1 billion** in dividends. While this yield is enticing, the forward payout ratio of **54.3%** raises questions about the sustainability of these dividends amid declining earnings expectations, with projected earnings falling **28.4%** in **2024**.

Current Wall Street sentiment is hesitant, with Walgreens rated a “hold.” Out of **15 analysts**, only **2** rate it as a “strong buy,” while **10** suggest holding, and a couple recommend selling. The **average price target of $11.73** indicates a potential **30.9%** upside, while a high target of **$19** suggests an impressive **112%** upside potential over the next year.

3. Altria Group: Dividend Yield of 7.9%

Altria Group (MO) has remained a prominent choice for dividend investors in the tobacco and nicotine product sector, known for its **7.9%** forward dividend yield—well above the consumer sector’s average. Valued at **$87.6 billion**, Altria’s stock has surged **26.5%** year-to-date, outpacing the broader market despite facing substantial headwinds due to health initiatives influencing smoking rates.

With a strategic shift toward diversification in sectors such as cannabis, wine, and smokeless tobacco, Altria continues to show resilience. Its dividends are robust, totaling **$1.7 billion** in the second quarter of **2023**, even as adjusted earnings remained stable at **$1.31** per share. Projections anticipate earnings growth of **3.1%** in **2024**, complemented by an additional **3.8%** in **2025**.

Despite a high payout ratio nearing **76.9%**, Altria is committed to increasing dividends by mid-single digits annually through **2028**, which aligns with its historical performance as a “Dividend King.” The stock is currently rated a “hold” by analysts; among the **10** analysts covering MO, **3** label it a “strong buy,” while **5** recommend a hold, and **2** suggest a sell. Notably, Altria has surpassed its average price target of **$48.94**, with a high target reaching **$57, suggesting an additional** **11.7%** upside potential.

Conclusion

The biotechnology and pharmaceutical sectors present various opportunities for income-seeking investors in an unpredictable market. Each of the stocks discussed—Pfizer, Walgreens Boots Alliance, and Altria—offers a unique risk-reward profile underpinned by dividend yields that could create a compelling case for investment. While the volatility persists, the underlying fundamentals of these companies suggest promising avenues for both income and potential capital appreciation. As always, potential investors should carry out due diligence and weigh their risk tolerance before making investment decisions.