If you haven’t finished your Christmas shopping yet, you’re rapidly running out of time. I suspect many people have already purchased most of the gifts they’ll give but might still have a few remaining.
Are there potential stocking stuffers for income investors? I think so. Here are three ultra-high-yield dividend stocks to buy before the end of 2024.
1. Enterprise Products Partners
Enterprise Products Partners (EPD 1.51%) operates over 50,000 miles of pipelines that transport natural gas liquids (NGLs), natural gas, crude oil, and petrochemicals across the U.S. The limited partnership (LP) also owns many other midstream energy assets, including storage facilities that hold over 300 million barrels of liquids and 42 natural gas processing trains.
As an LP, Enterprise Products Partners pays a distribution to unitholders rather than a dividend to shareholders. Whatever you want to call it, though, it’s juicy. The company’s forward distribution yield currently stands at 6.79%. Even better, Enterprise has increased its distribution for 26 consecutive years.
Income investors should also love Enterprise Products Partners’ resilient business. It’s the only midstream energy infrastructure company with an A credit rating reflecting a high credit quality with a low default risk. Enterprise has consistently generated double-digit percentage returns on invested capital (ROIC) over the last two decades — even during challenging times for the energy sector.
Why buy this ultra-high-yield stock before year-end? Enterprise should benefit from favorable policies likely to soon be implemented by the incoming Trump administration. It’s also cheap, with shares trading at 10.5 times forward earnings.
2. Pfizer
Some people seem to view big pharmaceutical companies in the same way they look at the Grinch who stole Christmas in Dr. Seuss’ famous tale. But I think Pfizer (PFE 2.29%) is a big pharma stock that should bring some holiday joy to income investors who understand the full picture of the company.
Granted, an investor who doesn’t understand the full picture probably won’t like the stock. Pfizer’s COVID-19 revenue has plunged faster than Santa going down a chimney. And the company faces a few brutal years when it will lose patent exclusivity for multiple blockbuster drugs.
However, Pfizer isn’t nearly as dependent on COVID-19 product sales now as it was a couple of years ago. It has several newer products on the market driving growth, including respiratory syncytial virus vaccine Abrysvo. The company’s acquisitions in recent years are paying off, with drugs including Adcetris and Padcev generating big bucks.
We can’t forget Pfizer’s strong forward dividend yield of 6.53%. The company should boost its dividend payout next year. I also suspect that concerns that officials in a second Trump term will make decisions that seriously hurt Pfizer’s business will prove to be overblown. With Pfizer’s shares trading at below 8.7 times forward earnings and better growth prospects for the company than many expect, now could be the perfect time to invest.
3. United Parcel Service
Many of the presents sitting beneath Christmas trees across the country were delivered by United Parcel Service (UPS 2.47%). That’s a certainty, considering that UPS is the world’s largest package delivery company and delivers an average of 22.3 million packages and documents each day.
UPS’ stock performance over the last few years hasn’t been good, but I don’t think it’s the equivalent of a lump of coal in the stockings for investors anymore. The company returned to revenue and profit growth in the third quarter of 2024. UPS has also moved past the overhang of the front-loaded costs associated with its five-year deal with the Teamsters Union.
Today, UPS is focused on improving the profitability of the packages it delivers. It’s expanding further into healthcare logistics and serving small-to-medium-sized businesses in furtherance of this goal. I expect these efforts to pay off over the next few years.
In the meantime, UPS offers an attractive forward dividend yield of 5.19%. The company has increased its dividend for 15 consecutive years, and I look for that streak to continue in 2025.
Keith Speights has positions in Enterprise Products Partners, Pfizer, and United Parcel Service. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends Enterprise Products Partners and United Parcel Service. The Motley Fool has a disclosure policy.
