For anyone looking to become a savvy investor, there’s key information in the following table.
|
Status of Dividend Payments |
Average Annual Total Return (1973-2025) |
|---|---|
|
Dividend Growers and Initiators |
10.22% |
|
Dividend Payers |
9.20% |
|
No Change in Dividend Policy |
6.87% |
|
Companies that Don’t Pay Dividends |
4.21% |
|
Dividend Shrinkers and Eliminators |
(0.96%) |
|
Equal Weight S&P 500 Index |
7.74% |
As illustrated here, if your goal is to build wealth over time, investing in healthy, growing, high-dividend stocks seems to be a solid strategy. There are three points to contemplate.
1. Pfizer
Getting started with major pharmaceutical firms, we have Pfizer. The company currently boasts an attractive dividend yield of 6.7%. This high yield is somewhat a consequence of its average annual drop of around 7% over the past three years. Interestingly, it has rebounded with a 17% rise in the last year. It’s not uncommon for high-yield stocks to face challenges, especially when dividend yields increase as stock prices decline.
Today’s Changes
(1.34%)
Current Price
$April 26th
Key Data Points
Market Capitalization
$148 billion
Daily Range
$25.80 – $26.20
52 Week Range
$November 23rd – $28.75
Volume
1.2M
Average Volume
36.9 million
Gross Profit
65.16%
Dividend Yield
6.61%
One of Pfizer’s main hurdles is the expiration of patent protection for some of its key products. This issue isn’t unique to Pfizer, as it affects many pharmaceutical firms. Typically, companies manage this by developing new drugs or acquiring those that show promise. Pfizer seems to be doing a bit of both.
Moreover, Pfizer stock might be undervalued, given its recent forward P/E ratio of 9.0, which sits below its five-year average of 9.7.
2. United Parcel Service (UPS)
UPS also showcases a high dividend yield, recently recorded at 7.7%. Like Pfizer, though, the last three years have not been kind, leading to an 8.6% average annual loss. Nevertheless, there are promising aspects to UPS’s situation.
Today’s Changes
(-1.52%)
Current Price
$108.54
Key Data Points
Market Capitalization
$92 billion
Daily Range
$108.52 – $110.70
52 Week Range
$82.00 – $122.41
Volume
4M
Average Volume
6.2M
Gross Profit
18.32%
Dividend Yield
6.04%
There’s been concern over UPS’s decision to reduce shipping volumes with Amazon.com, but some analysts view it as a strategic move, given that it often results in low margins. The company appears to be pivoting toward more lucrative clients, particularly in the healthcare sector and small businesses.
In its first-quarter report, UPS revealed a 2.3% decline in overall domestic revenue, yet saw package revenue increase by 6.5%. Additionally, international revenue edged up by 3.8%, with a remarkable increase of 12.1% in revenue per package. The stock is reasonably priced with a recent forward P/E ratio of 14x, just below its five-year average of 15x. This might reward long-term believers in UPS’s strategy.
3. Schwab US Dividend Stock ETF
Finally, I’m recommending not just a stock but an exchange-traded fund (ETF) called the Schwab US Dividend Stock ETF, which trades like stocks. Its current yield stands at 3.25%, distributing funds across about 100 dividend-paying companies, such as Qualcomm, Texas Instruments, and United Health Group. Interestingly, UPS stock has recently made it to the top 30 holdings.
Schwab US Dividend Stock ETF
Today’s Changes
(-0.89%)
Current Price
$32.30
Key Data Points
Daily Range
$32.29 – $32.66
52 Week Range
$26.16 – $32.91
Volume
26.8M
This ETF strikes a nice balance of income and growth. It has performed well, showing nearly a 20% increase year-to-date as of June 4. So, if you prefer a diversified option instead of putting your money solely into individual dividend payers, this ETF is a wise choice.
