3 Brand-Name, Ultra-High-Yield Dividend Stocks Patient Investors Can Confidently Buy With $300 Right Now

Globe and Mail

13-02-2025

With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, Wall Street offers no shortage of ways for investors to grow their wealth. But among this vast sea of pathways to become richer is one of the most-successful strategies: buying and holding high-quality dividend stocks.
Companies that pay a regular dividend often share a few traits:
They're usually profitable on a recurring basis.
They're often capable of providing transparent long-term growth outlooks.
They've demonstrated to Wall Street they can successfully navigate their way through recessions.
More importantly, dividend stocks have a knack for outperforming. In The Power of Dividends: Past, Present, and Future, researchers at Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks averaged an annualized return of 9.17% from 1973 through 2023, and did so while being 6% less volatile than the broad-based S&P 500. Meanwhile, the non-payers delivered a more modest annualized return of 4.27% over the same half century, and were 18% more volatile than the benchmark S&P 500.
Ideally, investors want the highest yield possible with the least amount of risk. The issue is that risk and yield tend to correlate, which means a lot of vetting is necessary on the part of investors to avoid getting stuck in a yield trap.
The good news is there are three exceptionally well-known, ultra-high-yield dividend stocks -- sporting an average yield of 6.65% -- which can be bought with confidence right now by patient investors with $300.
Pfizer: 6.74% yield
The first brand-name stock that long-term income seekers can set and forget in their portfolios is pharmaceutical goliath Pfizer (NYSE: PFE), whose 6.74% yield is nearing an all-time high.
Although Pfizer's stock chart gives the perception that it's struggling, a deeper dive into the company's operating performance shows it's been a victim of its own success. After generating in excess of $56 billion in sales from its COVID-19 therapies in 2022, Pfizer's combined COVID-19 drug sales fell to a little over $11 billion in 2024.
But taking a wider-lens approach completely changes the perspective of this data. Although COVID-19 sales declined by around $45 billion over the last two years, any revenue generated from Pfizer's COVID-19 vaccine (Comirnaty) and oral therapy (Paxlovid) compares quite favorably with the $0 it was generating from this segment four years ago. Between 2020 and 2024, Pfizer's net sales soared 52% to $63.6 billion. That's not a struggling business.
Something else exciting is Pfizer's $43 billion acquisition of cancer-drug developer Seagen in December 2023. This deal vastly expands Pfizer's oncology pipeline and provides an immediate boost to its sales. It'll also result in significant cost savings, which are reflected in its 2025 profit forecast.
Pfizer benefits from healthcare being a highly defensive industry, as well. Since we don't get to choose when we become ill or what ailment(s) we develop, the company's operating cash flow tends to be predictable and consistent. This makes its forward price-to-earnings (P/E) ratio of 8 quite the bargain.
Verizon Communications: 6.69% yield
A second brand-name stock that can be confidently scooped up with $300 by opportunistic long-term investors is telecom stalwart Verizon Communications (NYSE: VZ). Verizon's nearly 6.7% yield is also approaching an all-time high.
If there's a knock against Verizon, it's that it's not an artificial intelligence (AI) stock. Investors are gravitating to high-growth, high-volatility tech stocks, and not mature businesses like Verizon that generate low-single-digit sales growth and highly predictable cash flow. But investor apathy toward this telecom giant can be income seekers' gain.
The beauty of wireless services and the internet is that both are viewed as basic necessities. During periods of economic turbulence, consumers are unlikely to cancel their access to the outside world. Wireless retail postpaid churn rate was only 1.12% during the fourth quarter, with average revenue per account climbing by 4.2% from the prior-year period. Consumers are sticking around, with the 5G revolution incenting a steady upgrade to wireless devices.
Though Verizon's growth heyday ended long ago, you wouldn't know it by homing in on the company's broadband operations. Total broadband connections grew to more than 12.3 million in 2024 (a 15% year-over-year increase), which has the potential to boost its operating cash flow. Best of all, broadband subscribers are more likely to bundle their services, which can improve customer loyalty and, ultimately, Verizon's operating margin.
The final thing to note about Verizon is that its financial flexibility is improving. Over the last two years, its total unsecured debt has declined by almost 10% to $117.9 billion. When coupled with a forward P/E ratio of around 8, Verizon stands out as an amazing deal.
Ford Motor Company: 6.51% yield
The third brand-name, ultra-high-yield dividend stock that patient investors can purchase with $300 right now is legacy automaker Ford Motor Company (NYSE: F). Excluding the COVID-19 crash in the first quarter of 2020, Ford's yield hasn't regularly parked above 6% since 2019.
Ford's yield topping 6% is a reflection of its stock touching a greater-than-four-year low this week. Steep losses from its electric vehicle (EV)-focused Model e segment in 2024, along with uncertainties that caused management to forecast a tough year in 2025 -- Ford's EBIT (earnings before interest and taxes) forecast of $7 billion to $8.5 billion for 2025 missed the mark -- led to a breakdown.
Despite the cyclical nature of legacy automakers, there are a handful of long-term catalysts investors can focus on. For example, Ford does have the luxury of adjusting its spending spigot to match consumer demand. Being mindful of tepid EV demand allows management to pare back spending and shift it to legacy segments that are generating healthy profits.
Ford's shareholders can also take solace in knowing the company is making strides to improve its production quality. While higher-than-anticipated warranty expenses have weighed on the company's profits in recent years, many of these issues can be traced to before Jim Farley became CEO in October 2020. In 2024, J.D. Power's "Initial Quality Study" put Ford in the top third of all brands examined in terms of fewest problems per 100 vehicles.
To round things out, Ford F-Series pickup has been the best-selling truck in the U.S. for the last 48 years, and the top-selling vehicle domestically (period!) over the last 43 years. While bigger isn't always better in the business world, trucks are statistically better than sedans at generating juicier vehicle margins for automakers. As long as Ford can maintain the popularity of its F-Series truck line, its forward P/E ratio of roughly 5.4 is a steal.
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