The current market downturn presents a unique opportunity for income investors to snag attractive dividend stocks at lower valuations. With many stocks boasting sky-high yields and low forward earnings multiples, the selection process can be overwhelming. However, three standout stocks have caught our attention due to their ultra-high yield, recession-resistant business models, and undervalued status.
Ares Capital (ARCC) stands out for its 9.42% forward dividend yield, making it an income investor’s dream stock. The company’s low forward earnings multiple of 9.6 further solidifies its appeal. While the economy’s future is uncertain, Ares Capital has historically delivered impressive total returns of over 70% compared to the S&P 500.
Enterprise Products Partners (EPD) is another attractive option, boasting a 6.8% forward distribution yield and trading at only 10.3 times forward earnings. The company’s recession-resistant business model, with revenue protected from inflation, makes it an attractive choice for investors seeking stable returns.
Pfizer (PFE), despite its recent challenges, offers a compelling dividend yield of 7.72%. The company’s valuation is cheap, trading at 7.5 times forward earnings, making it an undervalued stock in the pharmaceutical sector. With several newer products driving growth and a 16th consecutive annual dividend increase, Pfizer seems poised for further upside.
These three stocks offer a compelling combination of high yields, low valuations, and recession-resistant business models, making them attractive options for income investors seeking to capitalize on the current market downturn.
Source: https://www.fool.com/investing/2025/04/20/3-ultra-high-yield-dividend-stocks-to-buy-right-no