Title: Analyzing the Top Dividend Stocks in the S&P 500 for 2025 Investments
Dividend stocks continue to capture my undying affection as underappreciated champions of the investing world. While they may lack the allure of high-flying growth stocks, they can be just as effective at generating wealth for investors.
With volatility lurking around every stock market corner, dividend stocks offer a steadfast source of income. Regardless of whether prices are up, down, or static, shareholders can anticipate receiving their monthly or quarterly payouts (with exceptions).
As we venture into 2025, deciding which dividend stocks to incorporate into your portfolio becomes equally crucial, particularly those boasting desirable dividend yields. Below are the S&P 500's leading high-yield stocks at the time:
| Company | Dividend Yield || ------------------ | -------------------------------------------------------------- || Walgreens Boots Alliance (WBA -4.65%) | 11.8% || Altria Group (MO 0.06%) | 7% || Pfizer (PFE -1.00%) | 6.6% |
Despite these elevated dividend yields, it's essential to scrutinize whether such companies deserve a spot in your portfolio for the upcoming year. Let's dissect each company's current standing below.
1. Walgreens Boots Alliance
Walgreens Boots Alliance (WBA -4.65%)
At first glance, an 11.8% dividend yield may seem like a dream for income investors. However, a closer examination reveals the reasons behind Walgreens Boots Alliance's lofty yield, along with potential pitfalls.
11.8%
The company slashed its quarterly payouts by a significant 48% to $0.25 during the early part of the year. By Dec. 6, 2024, the stock dropped by 68% for the year.
Aside from paltry financial numbers, Walgreens Boots Alliance's future looks bleak. Its operational losses for fiscal 2024 reached an alarming $14.1 billion. In response, the company announced plans to scrap around 1,200 stores from its inventory over the next couple of years.
Altria Group (MO 0.06%)
Competition from industry giants like Amazon and Walmart is intensifying, negatively impacting Walgreens Boots Alliance's business prospects.
7%
The investment case worsens when you consider the stock's heavier reliance on its dividend payouts. In 2024, it distributed $1.3 billion in dividends while remaining stranded far from breaking even. The specter of another dividend cut or even a suspension looms large.
While Walgreens Boots Alliance's financial condition remains in flux, it appears to be an unattractive investment option heading into 2025.
Pfizer (PFE -1.00%)
2. Altria Group
6.6%
Altria has developed a reputation as a top-tier dividend stock in the S&P 500. Its stock price soared by around 37% this year, yielding an impressive 7% yield as of Dec. 6, 2024.
Much of Altria's success stems from its progress in non-cigarette categories, such as vapor. In 2024, the company reaped the benefits of its recent acquisition of NJOY.
Although the decline in adult smoking rates in the United States has taken its toll on Altria's primary business, there's a silver lining to its storm. The trend has prompted the company to raise its prices per pack.
Despite the advantages, the urge to diversify and expand Altria's product portfolio should persist. Concentrating on cigarette sales alone is an uncertain long-term strategy, leaving the company vulnerable to wider market trends.
As long as Altria demonstrates a commitment to non-cigarette categories, it remains an appealing investment choice heading into 2025. However, investors will need to closely monitor its development and success in these areas.
3. Pfizer
Pfizer's stock has experienced a noticeable downturn since reaching a high of around $61 in late 2021. Despite the financial setbacks, Pfizer retains significant investment potential, especially for those seeking exposure to the healthcare sector.
Pfizer's diversified business strategy has kept it fueled throughout the past decade, with a consistent growth trajectory for its dividend — an impressive streak that spans 15 consecutive years. Over the span of the past decade, the company has boosted its payouts by an astounding 50%.
Should you choose to invest in Pfizer, the trailing 12-month dividend yield guarantees a steady income stream while investors wait for its long-term growth to materialize.
While the near-term prognosis for Pfizer's financial performance remains uncertain, its track record of success, emphasis on innovation, and solid dividend yield make it a formidable contender as a 2025 investment choice.
As we maneuver through the financial landscape of 2025, carefully selecting high-yield dividend stocks is crucial for maximizing investment returns. The S&P 500's leading high-yield stocks, such as Pfizer (PFE -1.00%), have displayed a strong potential for generating income.
Despite a temporary setback, Pfizer's stock has maintained a solid trajectory, boasting a consistent growth in its dividend for the past 15 years. With a 50% increase in payouts over the past decade, its 2025 dividend yield promises a reliable income stream for investors.
