These Ultra-High-Yield Stocks Are Hated but Completely Misunderstood
Ultra-high-yield stocks can offer great opportunities for deep-value investors.
- These stocks often get overlooked as investors shy away from names under significant pressure.
- For those willing to take on higher risk, these stocks may present substantial rewards.
When dealing with stocks yielding significantly higher than historical averages, you’re often looking at companies under intense pressure.
- Dividend yields at extreme levels often signal struggling businesses.
- While many avoid “turnaround” plays, the potential for recovery can make these stocks enticing for value investors.
As with any high-yield investment, be cautious of overly attractive yields.
- A 10-12% yield might indicate a value trap with a dividend that may not be sustainable long-term.
- Always consider the company’s story and whether the dividend has staying power before making investment decisions.
This article will explore several misunderstood ultra-high-yielders with strong long-term prospects.
- These companies have the potential to regain investor confidence and reverse their fortunes in the coming years.
Key Points
- Wall Street is misjudging several high-yield stocks under pressure.
- BCE and DOW are two intriguing stocks worth considering for value-focused investors.
BCE
BCE (NYSE: BCE), a Canadian telecom company, offers a nearly 12% dividend yield.
- Despite a possible dividend cut, BCE’s potential for recovery in 2025 makes it worth considering.
- The Canadian telecom sector faces unique challenges, such as intense competition and high network spending.
- Canada’s lower population density increases costs without guaranteeing immediate rewards.
- However, Canada’s rapid population growth could fuel long-term success for telecom companies like BCE.
- Canada’s telecom industry remains largely insulated from U.S. competitors due to regulatory barriers, creating a strong economic moat for players like BCE.
Dow
Dow (NYSE: DOW) offers a 7.1% dividend yield and is trading at multi-year lows.
- The company is focused on cost-cutting efforts, aiming to save $1 billion and enhance shareholder value.
- Dow’s 0.65 P/S ratio signals that its stock is undervalued, despite the recent struggles since 2022.
- The dividend yield appears secure, which makes Dow an appealing option for value investors.
- As Dow works on its recovery plan, it presents an attractive opportunity for those looking for a great value in March.