You’ve probably thought about whether that 13%-yielding stock could be a steal of a deal. All that dividend income could be significant. And so what if you lose money on the stock — the dividend income could help make up for it. Plus, if things turn out well, the stock could even rise in value, giving you some great returns along with all that dividend income.
That’s undoubtedly a big allure when it comes to Medical Properties Trust (NYSE: MPW). The stock pays an extremely high yield of around 13%, and it can easily generate $1,000 or more in dividend income for your portfolio. That is, if it can continue paying its dividend. There’s no certainty that it can.
While the stock looks cheap and may seem like it possesses a lot of upside, it also faces significant risk. It’s selling assets to boost liquidity, and one of its key tenants recently filed for bankruptcy protection. Forget gains along with dividend income — you could end up with losses and a dividend suspension instead.
The risk is extremely high with Medical Properties Trust, and it’s not one most investors should consider taking. If you want a stock with a lot of upside and a high yield, I’ve got a better option for you: Pfizer (NYSE: PFE).
Pfizer’s near-6% yield is well above average
You won’t get a double-digit yield with Pfizer’s stock, but you can still get a fairly high-yielding dividend. It currently pays around 5.8%, which is four times higher than the S&P 500 average of 1.3%. As a bonus, the stock has also increased its dividend payments in recent years. The stock’s quarterly dividend of $0.42 is 17% higher than the $0.36 it was paying investors five years ago.
Some investors are worried about Pfizer’s dividend, too. After all, the company is facing some significant headwinds. Some of its drugs are losing patent protection, and Pfizer is also seeing big declines in revenue from its COVID vaccine and pill.
But on the company’s most recent earnings call in May, management made it abundantly clear that the dividend is a high priority for the business. CFO Dave Denton said that “our No. 1 priority from…
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