Pay Me While I Wait: 3 Turnaround Stocks That Keep Paying Investors Through the Rebuild

Turnaround stocks ask investors to be patient. Waiting is easier when the company continues sending a dividend check every quarter. United Parcel Service (NYSE:UPS | UPS Price Prediction) is the clearest example. Its shares have fallen 35.10% over five years, and the quarterly payout continues coming the whole time. Pfizer (NYSE:PFE) is in the same position while it rebuilds its drug pipeline. Best Buy (NYSE:BBY) shows what this trade looks like once the turnaround is mostly done. Below is how well each dividend is covered and what has to go right for each company.

UPS: Collecting a 6.99% Yield While the Network Gets Rebuilt

At $93.02, UPS yields 6.99% on an annualized dividend of $6.56 per share, which puts it in ultra-high-yield territory. The stock is down 1.70% year to date, so the market has not yet given UPS credit for the rebuild. Shareholders get paid while they wait for that credit.

Dividend Safety Read

Earnings cover the dividend, but only just. Management expects adjusted diluted EPS of about $7.22 for the full year, which is above the $6.56 payout. Trailing diluted EPS of $5.38 is below the payout because of heavy transformation charges. Cash flow is just as tight.

UPS expects about $5.5 billion of free cash flow this year, including one-time Driver Choice Program payments. It plans to pay around $5.4 billion in dividends, subject to board approval, and also has a $1.3 billion pension contribution to fund. UPS still has a buffer, ending the second quarter with $4.7 billion in cash and no outstanding commercial paper.

UPS has paid a dividend every quarter since 1999. The quarterly payment jumped from $1.02 in 2021 to $1.52 in 2022 and $1.62 in 2023. Since then the raises have been token: $1.63 in 2024, then $1.64 from 2025 onward.

What Has to Get Fixed

The main driver is two cost programs, Network Reconfiguration and Efficiency Reimagined. Together with the volume reduction from Amazon (NASDAQ:AMZN), management expects them to deliver about $3 billion in benefits this year. UPS cut roughly 2 million pieces per day of lower-quality Amazon volume and removed about $4.5 billion of related expense. It closed 45 buildings in the first half, out of nearly 150 planned closures. It now sends 68.5% of U.S. volume through automated buildings, where the cost per package runs about 28% lower. The results are starting to show. Second-quarter revenue rose 7.6% to $22.8 billion, and U.S. domestic operating profit climbed 21% to $1.2 billion. The piece still missing is volume. Management expects U.S. volume excluding Amazon to grow in the back half of the year.

Risk to Watch

Guided free cash flow only just covers the dividend. Fuel costs, tariffs or a Teamsters contract renewal that management places two years out could each eat into that thin buffer. Income investors should continues an eye on the “subject to board approval” phrasing.

Pfizer: A 6.17% Yield Backed by a Public No-Cut Pledge

Pfizer trades at $27.80, down 15.55% over five years. It yields 6.17% on a $1.72 annualized dividend. That is ultra-high-yield income from a company whose COVID windfall has mostly gone away.

Dividend Safety Read

Adjusted earnings cover the dividend comfortably. Pfizer reaffirmed full-year adjusted diluted EPS guidance of $2.80 to $3.00, well above the $1.72 payout. On a GAAP basis, trailing diluted EPS is lower at $0.76. Cash flow is the pressure point.

Implied free cash flow (operating cash flow minus capital spending) was $9.076 billion in 2025, short of the $9.771 billion Pfizer paid in dividends. Pfizer made no share repurchases in 2025 and expects none in 2026, which leaves more cash for the dividend and the pipeline. Leverage stood at 2.7 times at the end of the second quarter, and interest coverage is 5.78.

The quarterly dividend rose every year from $0.38 in 2020 to $0.43 in 2025 and has stayed there since. Management has addressed the question of a cut head-on. On the most recent earnings call, Albert Bourla, who was chairman and CEO at the time, said: “We feel extremely confident that, even in the most stretched scenarios that we are running, we will be able to maintain our dividend.”

What Has to Get Fixed

Pfizer needs to replace shrinking COVID sales, which it now expects to be about $4 billion this year, down from an earlier $5 billion. It has three specific tools:

• Cost cuts: Pfizer remains on track to deliver most of its $7.2 billion in planned net cost savings by the end of this year.
• Padcev: sales of the bladder cancer drug grew over 20% last quarter, and the FDA expanded its approval to muscle-invasive bladder cancer.
• Obesity: the once-a-month GLP-1 drug from the Metsera deal is targeting its first approval in 2028, after showing placebo-adjusted weight loss of up to 12.3% in a mid-stage trial.

A patent settlement also gives the heart drug Vyndamax effective U.S. exclusivity until June 2031, which pushes back one of the patent cliffs investors feared most.

Risk to Watch

The years when key patents expire (loss of exclusivity) are the real test. Generic and biosimilar competition is expected to cut about $1.5 billion from revenue this year. Bourla has said dividend growth would resume only “after the LOE period”, so income investors should plan around a flat payout for a while.

Best Buy: A 4.36% Yield on a Turnaround Already Paying Off

Best Buy is the furthest along of the three, and the stock price shows it. Shares trade at $87.93, up 36.57% year to date and 20.86% over the past year. The market is already rewarding this turnaround, so most of the waiting is over. The stock yields 4.36% on a $3.84 annualized dividend, which makes it high-yield.

Dividend Safety Read

Coverage is the strongest of the three. Best Buy raised its full-year adjusted diluted EPS guidance to $6.70 to $6.90, against that $3.84 payout, and trailing EPS is $6.01. In the fiscal year that ended in January, operating cash flow of $1.962 billion covered both $704 million of capital spending and $801 million of dividends. Cash rose 31.6% from a year earlier to $2.26 billion. Shareholders’ equity is fairly thin at $3.18 billion against $12.92 billion in liabilities. The quarterly dividend has grow every year, from $0.55 in 2020 to $0.88 in 2022 and $0.96 this year.

What Has to Get Fixed

Most of the fix is already showing up in the numbers. Comparable sales grew 4.1% last quarter, and adjusted EPS rose 15% to $1.47. The next leg depends on higher-margin profit streams. Best Buy Ads is expected to grow 10% this year after bringing in $900 million last year. The full-year sales target for Marketplace, Best Buy’s platform for outside sellers, was raised to $1.3 billion. Store formats are changing too. Best Buy is opening smaller stores in markets too small for a full-size location, and it is more than halfway through adding 50 dedicated Meta Platforms (NASDAQ:META) spaces. The International business still needs work, with comparable sales down 1.8%.

Risk to Watch

Leadership is changing hands just as expectations have grow. Corie Barry has held her final earnings call as CEO, and Jason Bonfig formally takes over on November 1, alongside new CFO Anne Braman.

What Separates Getting Paid to Wait From a Value Trap

A value trap pays its yield out of a business that continues shrinking. A real turnaround pays its yield while a specific, measurable fix takes hold. UPS has its cost programs and automated buildings, Pfizer has its savings plan and its cancer and obesity drugs, and Best Buy has already shown its fix in its comparable sales and margins. For a shortcut to tell the two apart, we put the seven warning signs that a fat yield is about to be cut in a free dividend trap guide. The dividend pays you to wait, and the driver is what makes the wait pay off.

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