Top High-Yield Dividend Stocks to Watch in 2025: Kellogg & Procter & Gamble Reach New Highs

Shares of Kellogg Company (K) and Procter & Gamble Company (PG) have surged to 52-week highs, defying the broader market downturn. Meanwhile, Kraft Heinz Company (KHC) has retreated slightly following its second-quarter earnings report, signaling a significant shift from growth stocks to high-yield dividend investments. This trend is likely to accelerate in light of disappointing second-quarter GDP figures, as investors seek the stability and income that defensive stocks traditionally provide during economic slowdowns.

Key Insights

• Falling Treasury yields since 2019 have driven investors toward high-yield equities.
• Dividend yields typically decline when stock prices rise.
• The most robust high-income returns often emerge at the beginning of new upward trends.

With hundreds of stocks now offering yields exceeding the 10-Year Treasury Note, income-focused investors are increasingly favoring dividend-paying equities over bonds. However, selecting the right stocks requires caution, as some distressed companies may offer attractive dividends but carry significant risks, including potential bankruptcy.

Dividend yields tend to decrease as stock prices climb, which can diminish trading advantages. Stocks with solid turnaround strategies, like Kellogg and Kraft Heinz, often deliver the best returns in the early stages of a high-yield rally, rewarding shareholders who invest during recovery phases.

Investor Tip

Dividends impact stock prices in various ways. While a company’s dividend history influences its appeal, the timing of dividend announcements and payments can also cause predictable price movements in the underlying stock.

Kellogg’s stock peaked near $58 in 2007 before dropping to the mid-$30s during the 2009 recession. It recovered to previous highs by 2011 and surged to an all-time peak of $87.16 in mid-2016. After a prolonged decline that bottomed near $50 in 2019, the stock rebounded strongly, reaching a 21-month high in 2024. Despite rapid price gains lowering its forward dividend yield below 4%, Kellogg remains an attractive option within the food sector.

Procter & Gamble broke out above its 2000 high in 2005 but stalled until 2008. Following a sharp decline during the financial crisis and a brief dip in the 2010 flash crash, the stock reached new highs in 2013 but faced resistance in the mid-$90s for several years. A breakout in 2019 propelled shares to a February 2020 peak of $128.09. After a Q1 2024 dip, PG has rebounded strongly, supported by better-than-expected earnings and raised guidance. Its current dividend yield of 2.46% combined with upside potential makes it a compelling choice for dividend investors.

Investor Tip

A flash crash refers to a rapid, severe drop in security prices caused by a sudden withdrawal of buy orders, often occurring within minutes and leading to dramatic market moves.

Conclusion

As we approach the latter half of 2024, high-yield dividend stocks like Kellogg and Procter & Gamble are gaining momentum, offering investors reliable income and reduced risk in uncertain markets.

Disclosure: The author holds Kellogg shares in a family account but has no positions in other mentioned stocks at the time of publication.

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