Investors are looking for growth beyond the technology sector, and that’s putting dividend stocks back in favor. The idea is simple: When a stock’s growth outlook is unclear, dividends can help boost its total return and mitigate downside risk to investors’ portfolios.
For example, The Coca-Cola Company (NYSE: KO) stock has been up about 17% in the last 12 months. When you add in the company’s dividend yield, which currently is about 2.12%, the total return for KO stock is closer to 20%. That’s something that many investors can get behind.
Right now, several high-yield dividend stocks are trading near their 52-week lows but have catalysts for growth in 2025. While investors wait, they can collect a sizable dividend right now for income or to reinvest.
This Utility Stock Is Undervalued Even in a Worst-Case Scenario
[content-module:DividendStats|NYSE:AES]The AES Corp. (NYSE: AES) owns and operates power plants that generate and sell power to customers such as utility companies. The company also acts as a utility company that distributes, transmits, and sells electricity directly to end-user customers. It also generates and sells electricity on the wholesale market.
The company generates power using a variety of fuels and technologies, making it the definition of the all-of-the-above model favored by the Trump administration. One of those energy sources is coal. However, the company’s renewable energy projects may intrigue investors most.
Although the Trump administration is de-emphasizing the role of renewables, AES has several projects already underway before 2025 via the Inflation Reduction Act. Some analysts believe those programs could be in danger of having federal funding pulled. AES contends that sunset provisions protect those projects.
But even if they do go away, earnings still appear to be undervalued by at least 20%. And if the company’s predictions are accurate, it’s not hard to believe that forecasts from analysts such as JPMorgan Chase & Co. (NYSE: JPM) can lead the stock price over 35% higher, along with a dividend with a juicy 6.95% yield.
An Excellent Long-Term Buy-and-Hold If You Trust the Company’s Math
[content-module:DividendStats|NYSE:PFE]Medical stocks, and particularly biopharmaceutical stocks, can be volatile investments in the best of times. Now add in an uncertain outlook for the broader economy, and you can see why some investors believe Pfizer Inc. (NYSE: PFE) stock is cheap for a reason.
It’s not that the company hasn’t done its part to fuel its detractors. In April 2025, Pfizer announced it would discontinue work on its obesity drug candidate. Furthermore, it claims that loss of patent protection (i.e., the patent cliff) could wipe out $18 billion in revenue through the rest of the decade.
That said, the company has an expansive pipeline, which was bolstered by its acquisition of Seagen. That’s why Pfizer believes it will be able to generate up to $25 billion in new revenue by 2030.
While investors wait for that revenue, they get a dividend with a 7% yield that’s protected by a 58% payout ratio based on current-year estimates. For what it’s worth, analysts are forecasting a stock price gain of around 22% in the next 12 months.
LyondelBasell Is a Solid Choice If You Can Weather the Tariff Storm
[content-module:DividendStats|NYSE:LYB]Chemical companies have been underperforming many basic materials stocks. However, investors who believe that finding stocks that offer products that are in high demand with a high barrier to entry should consider LyondelBasell Industries (NYSE: LYB).
The company is one of the world’s largest producers of plastics and resins. This gives it a huge addressable market. But one that’s not protected from tariffs. That uncertainty and a slowing economy put pressure on the company’s short-term outlook.
Chemical stocks, in general, are cyclical and dependent on commodity prices. Rather than trying to time a bullish reversal, investors can buy an undervalued stock like LYB and collect a dividend that yields over 9%. The payout ratio of 84% based on this year’s earnings estimates is a little uncomfortable, but the company is showing no signs of cutting the dividend, which has increased by an average of 5.5% over the last three years.
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