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The average dividend yield in the S&P 500 Index remains low at 1.3%. As a result, income investors should focus on higher-yielding securities if they want additional income from their stock portfolios. 

Even better, investors can buy high yield stocks when they are also undervalued, which could lead to high total returns in the coming years. 

The following 3 undervalued hidden gems have yields above 5%, and high total return potential.

Pfizer Inc. (PFE)

Pfizer Inc. is a global pharmaceutical company focusing on prescription drugs and vaccines. Pfizer formed the GSK Consumer Healthcare Joint Venture in 2019 with GlaxoSmithKline plc, which includes its over-the-counter business.

Pfizer owns 32% of the JV, but is exiting the company, now known as Haleon. Pfizer spun off its Upjohn segment and merged it with Mylan forming Viatris for its off patent, branded and generic medicines in 2020.

Pfizer’s top products are Eliquis, Ibrance, Prevnar family, Vyndaqel family, Abrysvo, Xeljanz, and Comirnaty.

Pfizer’s current product line is expected to produce top line and bottom-line growth because of significant R&D and acquisitions.

Pfizer reported solid Q4 2024 results on February 4th, 2025. Company-wide revenue grew 21% operationally and adjusted diluted earnings per share climbed to $0.63 versus $0.10 on a year-over-year basis because of stabilizing COVID-19 related sales, growing revenue from the existing portfolio, and lower expenses.

Global Biopharmaceuticals sales gained 22% to $17,413M from $14,186M led by gains in Primary Care (+27%), Specialty Care (+12%), and Oncology (+27%). Pfizer Centerone saw 11% lower sales to $325M, while Ignite revenue was $26M.

Of the top selling drugs, sales increased for Eliquis (+14%), Prevnar (-4%), Plaxlovid (flat), Cominraty (-37%), Vyndaqel/ Vyndamax (+61%), Ibrance (-2%), and Xtandi (+24).

PFE has increased its dividend for 16 consecutive years and shares are currently yielding 6.9%.

Shutterstock, Inc. (SSTK)

Shutterstock sells high-quality creative content for brands, digital media and marketing companies through its global creative platform.

Its platform hosts the most extensive and diverse collection of high-quality 3D models, videos, music, photographs, vectors and illustrations for licensing. The company reported $935 million in revenues last year.

On January 7th, 2025, Shutterstock announced it entered a merger agreement with Getty Images through a merger of equals. The combined company will retain the name Getty Images Holdings, Inc and trade on the NYSE under ticker GETY.

Getty Images shareholders will own roughly 54.6% of the entity and Shutterstock shareholders will own the remaining 45.3%. Shareholders of SSTK will receive $28.84870 of cash, or 9.17 shares of Getty Images plus $9.50 in cash per share.

The combined company would have revenue between $1,979 million and $1,993 million, 46% of it being subscription revenue. About $175 million of annual cost savings is forecast by the third year, with most of this expected after 1 to 2 years.

On January 27th, 2025, Shutterstock announced a $0.33 quarterly dividend, a 10% increase over the prior year.

On February 25th, 2025, Shutterstock published its fourth quarter results for the period ending December 31, 2024. While quarterly revenue grew by a solid 15% year-on-year, it missed analyst estimates by nearly $4 million.

Adjusted EPS of $0.67 decreased by 7%, and also missed analyst estimates by $0.18.

Shutterstock has grown at astonishing rates over the past decade. Since 2015, the company’s adjusted EPS has increased at a 24.5% CAGR. And in the last five years, Shutterstock’s EPS has soared 25.9% annually. It has achieved this level of earnings growth from its many acquisitions that have expanded its product portfolio. 

Shutterstock has acquired many companies in recent years, such as Envato (May 2024), Backgrid (Feb 2024), GIPHY (May 2023), as well as Pond5 (2022), PicMonkey, TurboSquid, and Amper Music in recent years. Furthermore, Shutterstock has long-term goals it expects to achieve in 2027, such as $1.2 billion in revenue and $350 million in adjusted EBITDA.

SSTK stock currently yields 7%.

T. Rowe Price Group (TROW)

T. Rowe Price Group, founded in 1937 and headquartered in Baltimore, MD, is one of the largest publicly traded asset managers.

The company provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans and financial intermediaries.

On February 5th, 2025, T. Rowe Price announced fourth quarter and full year results for the period December 31st, 2024.

For the quarter, revenue increased 11% to $1.82 billion, though this was $50 million less than expected. Adjusted earnings-per-share of $2.12 compared favorably to $1.72 in the prior year, but missed estimates by $0.08. For the year, revenue grew 9.8% to $7.1 billion while adjusted earnings-per-share of $9.33 compared to $7.59 in 2023.

During the quarter, AUMs of $1.639 billion were up 19.2% year-over-year and 3.1% sequentially. Market appreciation of $205.3 billion was partially offset by $43.2 billion of net client outflows.

Asset managers like T. Rowe have low variable costs. As a result, higher revenues, driven primarily by increasing assets under management, allow for margin expansion and attractive earnings growth rates. Assets under management grow in two basic ways: increased contributions and higher underlying asset values. While asset values are finicky, the trend is upward over the long-term.

TROW has increased its dividend for 39 consecutive years and shares are currently yielding 5.3%.