High-Yielding Trio Offers Investment Opportunity for Dividend Enthusiasts

Investors should consider buying high-yielding stocks with strong underlying profits and investment-grade balance sheets, such as those recommended by Wide Moat Research. The article highlights the importance of sizable and comfortably backed dividends, and suggests that now is a good time to invest in high-yielding stocks.

Investors are increasingly seeking high-yielding stocks as a means to generate steady income. However, it is crucial to ensure that these high yields are backed by strong fundamentals and investment-grade balance sheets, as highlighted by Wide Moat Research. The firm emphasizes that high-yield stocks can be either a mirage or a hidden gem, depending on the company's fundamentals and market perception. This article explores three high-yielding stocks that Wide Moat Research recommends: Comcast Corporation (CMCSA), AES Corporation (AES), and Sanofi (SNY).

Comcast Corporation (CMCSA)

Comcast Corporation is a telecom and entertainment powerhouse, operating two predominant businesses: Connectivity & Platforms and Content & Experiences. The company's Connectivity & Platforms businesses include Xfinity cable television, Internet, telephone, and wireless services in the U.S., making it the largest Internet provider in the country. Its Sky brand is the second-largest broadband provider in the United Kingdom, and Sky Mobile is the fastest-growing wireless provider in this market. The company generated $81.3 billion in revenue and $32.8 billion in adjusted EBITDA in 2024, with Residential Connectivity & Platforms contributing the majority of the adjusted EBITDA.

On the Content & Experiences side, Comcast has powerful brands like Peacock, Universal Studios, and NBC News. The company is also a leader in theme parks, with resorts in the U.S., Japan, and China. In 2024, these businesses generated $45.1 billion in revenue and $6.1 billion in adjusted EBITDA. The FAST Graphs analyst consensus projects adjusted EPS to grow by 5.5% annually through 2027, off a 2024 base of $4.33. Comcast's 3.9% dividend yield is well-covered by a payout ratio set to be in the low-30% range for 2025. The stock is trading at a forward 12-month P/E ratio of 7.6, which is well below the 10-year average P/E ratio of 15.6 and 36% less than the fair value P/E ratio of 12. If Comcast returns to fair value and meets growth expectations, it could have a 63% upside through September 2026 and deliver 16% annual total returns by the end of 2030.

AES Corporation (AES)

AES Corporation is a deeply undervalued renewable energy trailblazer. As of December 31st, 2024, the company owned and managed $47 billion in assets, including 32.1 gross GW in operation and almost another 5 GW under construction. AES generated $12.3 billion in total revenue in 2024, making it a major hybrid (regulated and non-regulated) utility. The company has a considerable backlog and a favorable macro outlook, with 12 GW of backlog as of Q2 2025. The FAST Graphs analyst consensus projects non-GAAP EPS to grow by 3.2% annually through 2027, off a 2024 base of $2.14. AES's 5.2% dividend yield is rather generous and is poised to be manageable in the low 30% range in 2025. The stock is priced at a forward 12-month P/E ratio of 6.1, which is 44% below the 10-year average P/E ratio of 12.2 and the fair value P/E ratio of 11. If AES matches the growth consensus and reverts to fair value, it could have an 87% upside by the end of September 2026 and generate 17% annual total returns by 2030.

Sanofi (SNY)

Sanofi is a discounted pharma and vaccine innovator. The French drugmaker's $122 billion market cap places it outside of the top 10 largest pharmaceutical companies in the world. As of Q2 2025, Sanofi had five drugs that were already blockbusters or will be by the end of 2025, led by its star immunology medicine called Dupixent. The company's pipeline had 82 clinical-stage projects, with 30 in either phase 3 clinical trials or the registration phase. The FAST Graphs analyst consensus is for EPS to grow by 10.2% annually through 2027, off a 2024 base of $3.70. Sanofi's 4.4% dividend yield is appealing, considering that the payout ratio will be in the low-50% range in 2025. The stock is trading at a forward 12-month P/E ratio of 10.3, which is below the 10-year average P/E ratio of 13.4. If Sanofi returns to fair value and lives up to growth expectations, it could have a 31% upside through September 2026 and have 13% annual total return potential by the end of 2030.

Risks to Consider

While CMCSA, AES, and SNY are fundamentally solid businesses, they do face risks that could hurt or even shatter their respective investment theses. Key risks to CMCSA include the potential for an economic downturn to lower consumer spending and possible changes in consumer behavior. The risk of a recession is currently low, but the labor market is showing signs of weakening. Notable risks to AES include its business model and shifts in regulatory incentives surrounding renewable energy. Sanofi faces risks related to its product pipeline and regulatory approvals.

Conclusion

Investors should consider buying high-yielding stocks with strong underlying profits and investment-grade balance sheets, such as those recommended by Wide Moat Research. These stocks offer attractive total returns potential in the coming years. However, investors should be aware of the risks associated with these investments and monitor the companies' performance closely.

References

[1] https://seekingalpha.com/article/4818093-now-is-the-time-to-buy-this-high-yielding-trio