Global equities have had a rough April, and the outlook remains unsettled. Inflation is still running hot, recession chatter is growing louder, and geopolitical risks aren’t going away. In this environment, dividend stocks are back in favor. The steady passive income they provide can help absorb market losses, and reinvesting those payouts is a proven way to juice long-term returns.
Two healthcare names stand out right now: Medical Properties Trust (MPT) and Pfizer (PFE). Both trade at attractive yields — 7% and 6.4%, respectively — and offer defensive characteristics that could serve investors well if the economy slows further.
MPT is a healthcare-focused REIT, and it has been through the wringer. Several tenants either defaulted on rent or went bankrupt. The company responded with painful but necessary steps: it slashed its dividend twice, sold off some assets, and found new tenants to replace the bankrupt ones.
The result? A much more diversified business. Today, no single tenant or even a pair of tenants can easily derail MPT.
Given the shaky economic backdrop, it’s fair to ask whether the 7% forward yield is still at risk. My take: the worst is likely behind the REIT. All REITs face tenant defaults, but healthcare-focused ones are inherently more defensive because medical services are a necessity. MPT is unlikely to repeat the same nightmare anytime soon.
More tellingly, last year MPT announced it would raise its dividend — a clear sign that management believes the underlying business has turned a corner and wants to reward shareholders.
The stock is still deeply underwater from three years ago, and the rebound is far from complete. But as operations stabilize, MPT is well positioned to outperform in the long run. For income-focused investors with a multiyear horizon, this 7% yield is compelling.
Pfizer’s 6.4% forward dividend yield is eye-catching for a blue-chip pharma giant. But the company has struggled lately: weak financial results, patent cliffs on blockbusters like Eliquis, and an unstable COVID franchise.
So can the dividend hold?
The case for “yes” starts with Pfizer’s deep portfolio of approved drugs. Even ignoring minor products, the company had several medicines pulling in over $1 billion each last year. Yes, some of those will lose exclusivity soon, but new drugs are ramping up faster than many realize. Abrysvo, an RSV vaccine approved in 2023, generated about $1 billion in sales last year – up 37% year over year. Elrexfio, a cancer drug also approved in 2023, saw revenue jump from $103 million in 2024 to $304 million last year.
The new products aren’t yet big enough to fully replace declining legacy drugs. But Pfizer’s pipeline is rich. The company has launched multiple phase 3 trials over the past two years, with more on the way. By 2030, Pfizer’s portfolio could look dramatically rejuvenated, and its financials should follow.
Crucially, despite all its recent troubles, Pfizer has never cut its dividend – and a cut looks unlikely in the near term. That makes it a rare blue-chip high-yielder worth considering.
When markets stay volatile, a high-dividend strategy makes sense. MPT and Pfizer offer two different flavors of healthcare income: MPT has cleaned up its tenant mess, raised its payout, and now yields 7%; Pfizer leans on its massive drug lineup and deep pipeline to support a 6.4% yield. Both have risks, but for investors seeking stable cash flow, the current payout levels and valuations are looking increasingly attractive.
