3 Cheap Dividend Stocks With Excellent Yields

When it comes to picking stocks to buy in 2025, you need to look for stability and minimal volatility. The market has seen a lot of ups and downs this year, and building a portfolio that is resilient to that volatility should be your investment goal.

I believe that the best dividend stocks aren’t those that have the highest yields, but those that have the ability to sustain them. Be selective when looking for dividend stocks is more important than chasing yield. You should be looking for companies that have strong balance sheets and a history of paying sustainable dividends.

In that vein, I’ve identified three cheap dividend stocks with a strong history and excellent yield. Let’s take a look at them.

Pfizer

Dividend yield: 6.84%

Pharmaceutical company Pfizer (NYSE:PFE) has had a rough ride over the past two years, but its solid 6.84% dividend yield is safe. It is a favourite of many investors for the juicy dividend. Pfizer recently reported second-quarter numbers, and they’re improving. The revenue stood at $14.7 billion, up 10% year-over-year, while the EPS came in at $0.51. 

The company’s free cash flow stood at $571 million in the first half, while it paid $4.9 billion in dividends. Pfizer has increased its dividends for 16 consecutive years, and with financials improving, it will continue doing so. The management expects the cash flow to improve in the second half of the year. It is working on a cost cutting program and aims to save $7.7 billion by the end of 2027. 

Pfizer will have to deal with the loss of exclusivity for some of its drugs in the coming years. However, it does have an extensive pipeline, which could boost sales. The management believes that the loss of exclusivity could be offset by revenue growth from the new launches. It has 108 candidates in the pipeline, of which 28 are in Phase 3. 

Pfizer is a business whose priority is to reward shareholders, and its dividend is enviable. The stock is exchanging hands for $25.16 and is down 5.4% year-to-date. Pfizer is making enough money to pay dividends, and despite the losses in the past, it didn’t cut the dividend. Its turnaround has begun, and the stock could hit the 52-week high very soon. 

Realty Income

Dividend yield: 5.58%

Realty Income (NYSE:O) is a real estate investment trust (REIT) with an attractive dividend yield of 5.58%. Exchanging hands for $57.89, O stock is down 25% from the pre-pandemic highs. Realty Income is a trust that allows you to invest in real estate. The REIT bills itself as The Monthly Dividend Company since it makes 12 distributions a year.  

It focuses on single-tenant retail properties where the tenant pays most of the property-related expenses. It owns over 15,600 properties and is one of the biggest players in the industry. The company invests in retail and industrial properties across North America and Europe. It enjoys a high occupancy level and pays out 90% of the earnings as dividends. Realty Income pays monthly dividends and has increased the payout for 30 consecutive years. 

For the second quarter, it generated adjusted funds from operations of $947.5 million and generated $1.2 billion from same-store rental revenue. It invested $1.2 billion in new properties across Europe and the U.S. This diversification strategy has allowed the business to grow despite market volatility. Its strong first-half and a pipeline of new investments have helped the management raise its guidance. It is now aiming for an adjusted funds from operation between $4.24 and $4.28 per share, up 2% from last year. 

Realty Income is a top-notch dividend stock with the ability to drive investments and distribute steady dividends. It is a cheap stock with an exceptional yield, and the best thing about buying O stock is the sustainability of the dividends. Its highly diversified portfolio will continue generating funds from operations to keep investors happy. 

Verizon Communications 

Dividend yield : 6.20%

Shareholders of telecommunications giant Verizon Communications, Inc. (NYSE: VZ) enjoy a dividend yield of 6.20%. Meanwhile, the stock has been climbing on a positive outlook. Trading for $43.49 as of writing, VZ stock has seen an 8.16% year-to-date gain. Its growth driver is the broadband business, which added 293,000 net broadband users in the quarter to reach 12.9 million, up 12% year-over-year.

It managed to offset the lost subscribers in the consumer wireless business through steady growth in the broadband segment. The prepaid subscribers increased by 50,000, and the wireless retail postpaid segment added 65,000. 

The company reported a service revenue of $20.9 billion and an EPS of $1.22, up 6%. Its total business revenue was $7.3 billion, and business wireless service revenue was $3.6 billion. The management has maintained its full-year forecast for growth between 2% and 2.8% for wireless revenue and an adjusted EPS growth by 1% to 3%. 

Investors are attracted to the juicy dividend yield. Most importantly, the dividends are sustainable and covered by free cash flow. In the first six months of 2025, the company generated free cash flow of $8.8 billion and paid $5.7 billion in dividends. This means it has the potential to increase the dividends in the coming years. Its acquisition of Frontier Communications next year will also help the business see an improvement in network and subscribers. If you are an income-oriented investor, VZ deserves a place in your portfolio. 

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