7 High-Yield Dividend Stocks With High-Upside Potential


  • Rio Tinto (RIO): Rio Tinto extracts critical resources that should boost its profile.
  • Hasbro (HAS): Hasbro effectively commands a permanently relevant business model.
  • Philip Morris (PM): Philip Morris may be controversial but it’s a viable two-in-one deal.
  • Read more about these high-yield dividend stocks with potential capital gains.
High-Yield Dividend Stocks with Potential - 7 High-Yield Dividend Stocks With High-Upside Potential

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High-yield dividend stocks with potential for upside gains is essentially the Tony Robbins of market opportunities. Robbins gives you a big smile, a warm hug and invites into a total transformation package, turning all your visions, dreams and desires into reality.

What I’m trying to get at is this: you don’t necessarily have to compromise. For example, a typical life coach may lead you to improve your resume. You might find a great job with a high salary and excellent benefits in no time. On the other hand, a spiritual advisor can lead you to a path of personal wellness and discovery but at the expense of constant financial worries.

That’s where Tony Robbins and his captivating presence enters the stage. Just because you collect passive income every quarter (or whatever the case may be) doesn’t mean you can’t get decent returns. On the flipside, growth doesn’t always spell zero dividends.

Get them both. No compromises. Below are compelling high-yield dividend stocks with potential for significant upside.

Rio Tinto (RIO)

A photo of the Rio Tinto sky scrapper
Source: BalkansCat / Shutterstock.com

A resource mining enterprise, Rio Tinto (NYSE:RIO) could be an intriguing way to play the volatile electric vehicle market. As I pointed out recently, EV upstart Polestar (NASDAQ:PSNY) was forced to cut around 15% of its workforce. Multiple factors, including a huge EV inventory dump along with a sector-wide price war imposed substantial hardships on individual players. So, it’s anyone’s guess which one of these pure-play EV makers will come out on top.

But if the sector were to rise, all these vehicles would need lithium among other critical resources. Rio Tinto provides exactly that along with other important resources like aluminum and copper. Unsurprisingly, analysts rate shares a unanimous strong buy with an $81.19 average price target. That implies growth potential of almost 15%.

Just as well, Rio Tinto offers a forward dividend yield of 5%. That’s well above the materials sector’s average yield of 2.82%. Further, the payout ratio lands at 49.11%, providing confidence regarding yield sustainability. Overall, it makes a great case for high-yield dividend stocks with potential for capital gains.

Hasbro (HAS)

Hasbro (HAS stock) letters standing next to Magic the Gathering trading cards (a game from Hasbro)
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A leading developer and marketer of toys and games, Hasbro (NASDAQ:HAS) owns several iconic brands, including Transformers, Monopoly, and Nerf. In addition, the company creates digital games and entertainment experiences. Basically, so long as there are kids around, Hasbro should command permanent relevance. And even though the toy industry is super competitive, its well-recognized brands distinguish it from the others.

To be fair, Hasbro hasn’t exactly enjoyed a stellar time in the market recently. Over the trailing one-year period, HAS gave up nearly 13% of equity value. Still, that could make it a contrarian opportunity for daring investors. On the capital gains side, analysts view HAS as a consensus moderate buy with a $61.38 price target. That implies upside of just over 20%.

As for passive income, the company carries a forward yield of 5.48%. That stands well above the consumer discretionary sector’s average yield of 1.89%. To be fair, the payout ratio is a bit elevated at 66.15%. Still, that’s not terrible given the generous payout. Thus, it’s another solid idea for high-yield dividend stocks with potential.

Philip Morris (PM)

Philip Morris factory offices in Lithuania. PM stock.
Source: Vytautas Kielaitis / Shutterstock

I don’t want to beat a dead horse as I’ve already talked about Philip Morris (NYSE:PM) multiple times. However, the topic of high-yield dividend stocks with potential for capital gains is a very specific one: relatively speaking, there aren’t that many enterprises that qualify. However, the tobacco giant certainly does.

Yes, it’s in a controversial industry and one that’s fading: global smoking prevalence rates are definitely on the decline. However, the tobacco firms have a clear edge in developing e-cigarette or vaporizer products. Essentially, these companies know smokers the best. Therefore, they can tailor make digital solutions that truly resonate with this core audience.

As for the discussion at hand, Philip Morris offers a forward yield of 5.72%, well above the consumer staple sector’s average yield of 1.89%. Additionally, the company features 16 years of consecutive dividend increases.

Lastly, analysts rate shares a consensus moderate buy with a $104.75 price target, implying over 15% upside potential. Thus, it’s one of the high-yield dividend stocks with potential.

B2Gold (BTG)

b2gold (BTG) logo on a web browser enlarged by a magnifying glass
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If you want to dial up your prospects for capital gains and passive income to “11” all on the same security, look no further than B2Gold (NYSEAMERICAN:BTG). A Canadian mining enterprise, B2Gold owns and operates gold mines in Mali, Namibia, and the Philippines. On a narrative basis, BTG theoretically should benefit from the Federal Reserve’s dovish monetary policy pivot – if it goes through with it. That’s still a big “if.”

Moreover, BTG just hasn’t resonated with investors. In the trailing 52 weeks, shares gave up nearly 32% of equity value. That’s not exactly encouraging when the underlying asset has gone back up to above the $2,000 level. However, a case can be made that B2Gold is merely lagging behind its competitors. To lend credibility to this idea, analysts peg shares a consensus strong buy with a $4.68 price target.

If you do the quick math, the forecast comes out with a return potential of almost 70%. Just as well, on the passive income side, B2Gold offers a forward yield of 5.8%. That’s a big gap compared to the materials sector’s average yield of 2.82%. Thus, BTG deserves consideration for high-yield dividend stocks with potential.

Pfizer (PFE)

blue Pfizer logo on the windows of a corporate building PFR stock
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A multinational pharmaceutical and biotechnology firm, Pfizer (NYSE:PFE) really needs no introduction. Recently, of course, the company generated waves thanks to its efforts in forwarding a Covid-19 vaccine. However, that narrative has suffered as fears of the SARS-CoV-2 virus slipped into the rear-view mirror. Nevertheless, PFE could be one of the compelling high-yield dividend stocks with potential because of the underlying acumen.

As you likely know, Pfizer went with a messenger-RNA-based approach to its Covid vaccine. Looking out to the future, the scientific community believes that mRNA could possibly be used to help treat cancer. If so, Pfizer represents one of the companies that command a significant advantage.

Currently, analysts rate shares a consensus moderate buy with a $32.56 price target. Should PFE get there, we’re talking a return of almost 19%. As well, the high-side target clocks in at $45, projecting nearly 64% growth potential.

For passive income, Pfizer carries a forward yield of 6.12%. That just screams past the healthcare sector’s average yield of 1.58%. If you can accept volatility risk, It presents an intriguing canvas.

Petrobras (PBR)

the Petroleo Brasileiro logo on a building during daylight
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Based in Brazil, Petrobras (NYSE:PBR) – whose official name translates to Brazilian Petroleum Corporation – represents a hydrocarbon powerhouse. What’s intriguing about PBR is its market performance. Despite the coordinated efforts of major oil-producing nations to cut production, the impact didn’t yield higher prices. Therefore, many oil giants suffered. Not PBR. It gained 51% of equity value over the past 52 weeks.

Even with the robust print, Petrobras may have more room to run. Even though the company enjoys a strong 38.7% three-year EBITDA growth rate, PBR remains undervalued, trading at 4.28X forward earnings. Not only that, analysts peg shares a unanimous strong buy with an $18.94 average price target. Should it get there, investors can expect a return of 11%. Plus, the high-side target lands at $21.20, implying over 24% growth.

Turning to passive income, Petrobras offers a forward dividend yield of 6.43%. That’s conspicuously above the energy sector’s average yield, which is already high at 4.24%. Therefore, PBR ranks among the high-yield dividend stocks with potential.

Stellantis (STLA)

Stellantis (STLA) logo at the transmission factory. The Stellantis subsidiaries of FCA are Chrysler, Dodge, Jeep, and Ram.
Source: Jonathan Weiss / Shutterstock.com

One of the riskiest ideas among high-yield dividend stocks with potential, Stellantis (NYSE:STLA) doesn’t initially seem particularly treacherous. An automaker featuring renowned brands such as Alfa Romeo, Jeep, and Dodge, Stellantis saw its market value jump over 36% in the trailing one-year period. That’s not bad at all. Again, when you look at the pure-play EV manufacturers, STLA is looking mighty fine.

Still, the long-term assumption remains the same: EVs are the future of mobility and transportation. And so, perhaps inevitably, Stellantis will need to get with the times. And it’s doing just that. Moreover, the upcoming electric-powered Dodge Charger could potentially change the game. Here, we’re talking about muscle car brawn becoming integrated with the new paradigm of mobility.

Sure enough, analysts appear quite enthusiastic about STLA’s prospects, rating it a consensus strong buy. What’s more, the average price target clocks in at $25.85, implying nearly 22% upside potential. Finally, we gotta talk passive income. Stellantis offers a massive forward yield of 6.9%. With the payout ratio sitting at under 25%, STLA is one of the high-yield dividend stocks with potential.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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