Aktienwelt360 » All articles » Return more than 7%! These two dividend stocks are now paying extremely high dividends!
During volatile times in the stock market, high dividends act as an anchor. However, a yield of more than seven percent is rarely a boon, since the risk of a sharp dividend cut is very high.
This makes it all the more important to look behind the scenes. Only those who understand the business model, competitive advantages and risks can evaluate whether a high payout will lead to attractive overall returns over the long term.
High dividends require strong moats
Pfizer (WKN: 852009) has been one of the most important pharmaceutical companies in the world for decades. The company develops, manufactures and markets prescription drugs and vaccines.
Its key competitive advantages are its extensive research base, billions of dollars of investment in innovation and a global distribution network. Patents protect successful drugs from imitators for many years and ensure high profits. At the same time, Pfizer has solid financial capabilities to develop new active ingredients or acquire companies.
However, so-called patent expirations are regularly threatened, which can put pressure on sales. The same applies to Pfizer: from 2026 to 2028, the company faces a major patent cliff. Between $15 and $20 billion could be lost due to loss of patent protection in the coming months alone.
What’s particularly important is that developing new drugs is not only time-consuming, but also expensive and carries significant risks. Also acquisitions, for example with biotech companies such as Visible or Biohaven Pharmaceuticals have been done, little will change in this regard. Fortunately, the company has made good money on its coronavirus drugs and has invested heavily, so growth can be expected to resume from 2028.
A completely different company with high dividends Hoegh Autoliners (WKN: A3C8LV). The shipping company is a specialist in the field of international transport of cars and heavy rolling stock.
The focus is on modern Ro-Ro vessels that transport cars, trucks, agricultural and construction equipment across the oceans. The moat is created by a specialized fleet, long-standing relationships with major auto manufacturers and high barriers to entry: modern car carriers cost billions and take years to build. At the same time, the company benefits from international automobile trade, which can be very dynamic in the short term.
However, business remains highly cyclical. Lower car sales, falling freight rates or geopolitical tensions could have a material impact on earnings and therefore the dividend. Thus, high payouts are closely linked to business performance, and layoffs are not uncommon. Historically, investors have benefited from high dividends and simultaneously rising stock prices. Since 2022, the share price has increased by 700%.
Dividend hunters should take a closer look
A dividend yield of more than seven percent could be a strong selling point. However, this is by no means safe and requires deeper analysis.
Pfizer stands out for its innovative potential and global market position, while Höegh Autoliners stands out for its unique position in the automotive transport market. At the same time, both companies show that high payouts are always associated with certain risks. If you know this and think long term, you increase the chances that attractive dividends will also lead to sustainable wealth creation.
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Frank does not own any of the shares mentioned. Aktienwelt360 does not recommend any of the stocks mentioned.