Looking at high-yield healthcare stocks? These three stand out (but one has a slight skew to its story).
Dividend investors shouldn’t be dissuaded from investing just because the S&P 500 (SNPINDEX: ^GSPC) has a miserly 1.2% yield. If you dig in a bit, you can find attractive dividend stocks, including in the growth-oriented healthcare sector. Three you might want to consider right now are Kenvue (KVUE 0.60%), Medtronic (MDT 0.48%), and (with a grain of salt) Pfizer (PFE +0.36%). Here’s what you need to know.
Image source: Getty Images.
1. Kenvue is a boring consumer-staples business
Kenvue was created when it was spun off from “Dividend King” Johnson & Johnson. (A Dividend King is a company that has raised its dividend annually for 50-plus consecutive years.) That left J&J operating a drug and medical-device company and Kenvue operating J&J’s over-the-counter business.
Kenvue is a consumer-staples company, with iconic brands like Band-Aid, Johnson’s Shampoo, Aveeno, and Tylenol. However, right now, that last brand has gotten a lot of negative attention after it was singled out by members of the Trump administration as presenting a potential health issue for the baby if taken during pregnancy.
Today’s Change
(-0.60%) $-0.09
Current Price
$15.00
Key Data Points
Market Cap
$29B
Day’s Range
$14.98 – $15.33
52wk Range
$14.05 – $25.17
Volume
20M
Avg Vol
29M
Gross Margin
58.12%
Dividend Yield
0.05%
That attention has resulted in Kenvue’s stock price plunging. The stock price drop pushed the dividend yield up to 5.5%.
It is still a young business, for sure, but Kenvue has a strong stable of brands and products to which customers are loyal. This isn’t a fly-by-night company, and the negativity probably represents an emotional pendulum swing that’s gone too far. It’s true that the business hasn’t been performing particularly well in 2025 and recently lowered its full-year guidance, but even good brands go through weak periods.
It seems highly likely that this consumer-staples company will muddle through this period in one piece while continuing to reward investors for sticking around. That, by the way, is exactly what former parent J&J has provided for decades. A $1,000 investment will get you around 66 shares of Kenvue stock.
2. Medtronic is closing in on a big dividend achievement
Johnson & Johnson is a Dividend King because it has increased its dividend for over five decades. Medtronic’s streak is at 48 years, so it’s just two years shy of that incredible achievement. The company isn’t planning to fall short, noting that it specifically stated that a planned business spinoff of its diabetes division won’t lead to a change in its dividend policy.
The spinoff, however, is part of an important business overhaul. Medtronic, which makes medical devices, has been working through a period of slow growth. Now it has new products coming out and is looking to focus on only its most profitable businesses.
Diabetes doesn’t have the same margins as the rest of the company, and the spinoff is expected to be instantly accretive to earnings. This spinoff and other changes being made should position the company for stronger growth in the years ahead.
Today’s Change
(-0.48%) $-0.45
Current Price
$93.76
Key Data Points
Market Cap
$120B
Day’s Range
$93.29 – $94.95
52wk Range
$79.29 – $99.37
Volume
148K
Avg Vol
7M
Gross Margin
59.81%
Dividend Yield
0.03%
That said, Wall Street is taking a show-me attitude. Medtronic’s yield is a historically elevated 3% or so. If you like fairly boring dividend stocks, $1,000 will net you around 10 shares of Medtronic while the company works to get back into investors’ good graces.
3. Pfizer is a high-risk/high-reward dividend stock
Pfizer has the highest yield here at nearly 7%. However, the dividend-payout ratio is hovering worryingly close to 100%.
The pharmaceutical giant has cut its dividend before, specifically following the large acquisition of Wyeth. Given that it’s again working on a big acquisition of Metsera, there’s a risk that the dividend gets a haircut.
Today’s Change
(0.36%) $0.09
Current Price
$24.76
Key Data Points
Market Cap
$141B
Day’s Range
$24.68 – $24.83
52wk Range
$20.91 – $29.17
Volume
27M
Avg Vol
49M
Gross Margin
67.34%
Dividend Yield
0.07%
When you add upcoming patent expirations to the list of issues, you can see why investors are worried. But Pfizer is one of the largest and most resilient drug companies on the planet, and what’s happening to the business right now isn’t unusual for a drug company.
If you shift your view and look at it as a turnaround stock, it could be worth buying. The high yield, in this case, is simply a sign that the stock is deeply unloved today. But even if there’s a dividend cut, a dividend is likely to continue being paid. If history is any guide, the dividend will start to grow again after a reset.
The Metsera acquisition is actually a sign that the company is doing what it needs to do to get back on track. Simply put, Pfizer wasn’t having enough success with its own drug pipeline, so it bought a company with more promising drug candidates. It was the right move and a statement to the company’s long-term staying power. A $1,000 commitment here will allow you to buy roughly 40 shares.
Three options, from low risk to high risk
If you want a boring high-yield healthcare stock that’s on the cusp of being a Dividend King, Medtronic is for you. If you don’t mind a little uncertainty, Kenvue’s consumer-staples business could be interesting, even as the company deals with some business headwinds. For turnaround lovers, Pfizer’s high yield is a sign that Wall Street isn’t fond of the drugmaker, even though it has proven that it will do what’s necessary to be a long-term survivor.
