3 High-Yield Stocks Under $50 With Turnaround Potential

Dine Brands (NYSE: DIN), currently trading around $25 with a market capitalization of $388 million, presents a compelling case for income-focused investors. The parent company of Applebee’s and IHOP has seen its stock implode by more than 76% from previous highs, driving its dividend yield to a substantial 8.1%. Despite this dramatic decline, the dividend appears well-covered with a payout ratio still under 70%, suggesting sustainability even amid current challenges.

The restaurant chain faces significant headwinds, including intense competition and margin pressures from rising labor and ingredient costs. If unemployment continues to rise, consumer spending could further weaken, potentially extending Dine Brands’ operational struggles. However, the company maintains a decent balance sheet with healthy free cash flows, providing management with flexibility to navigate inflationary pressures while preserving the dividend. Trading at just 8.4 times trailing price-to-earnings, DIN offers value investors an opportunity to capture both substantial income and potential multiple expansion as IHOP looks to build on Applebee’s relative strength from the last quarter.

Wendy’s (NYSE: WEN), trading around $8 per share, offers investors a 6.4% dividend yield at a remarkably low valuation of 9.1 times trailing P/E. The $1.66 billion fast-food chain has declined approximately 64% from its peak, hitting new multi-year lows that suggest market pessimism may have overshot fundamentals. Like Dine Brands, Wendy’s operates in the competitive restaurant sector but maintains a cherished brand with significant comeback potential.

The company’s ‘Project Fresh’ strategic turnaround plan represents a comprehensive effort to revitalize operations and restore growth. While such initiatives require time and sustained execution, they provide a clear roadmap for recovery that could deliver substantial returns for patient investors. At current levels, Wendy’s appears to have only negative scenarios priced in, creating an asymmetric risk-reward opportunity for those willing to accumulate shares at what may prove to be cyclical lows. The combination of a robust dividend yield and operational turnaround potential makes WEN particularly attractive for income investors seeking capital appreciation.

Pfizer (NYSE: PFE) has retreated below $25 per share after the initial enthusiasm around its TrumpRX deal faded, bringing its dividend yield back near 7%. The pharmaceutical giant faces well-documented challenges, including patent cliffs that threaten revenue streams and the margin impact of lower drug prices. The recent deal with the Trump administration provided temporary optimism, but as other pharma companies potentially follow with similar agreements, Pfizer’s competitive advantage may diminish.

Despite these headwinds, Pfizer’s current valuation reflects significant pessimism, creating potential for substantial upside if the company can successfully navigate its patent challenges and develop new blockbuster drugs from its pipeline. The stock offers approximately 33% upside potential from current levels according to some analyses, though this comes with considerable uncertainty typical of biopharma companies facing product lifecycle transitions. For risk-tolerant investors, the combination of a 7% dividend yield and depressed valuation provides an opportunity to participate in what could be a gargantuan recovery if Pfizer’s research and development efforts yield successful new treatments.

These three companies—Dine Brands, Wendy’s, and Pfizer—share several key characteristics that make them noteworthy for yield-seeking investors. All trade below $50 per share, making them accessible to retail investors, while offering dividend yields substantially above market averages. More importantly, each company maintains manageable payout ratios that suggest dividend sustainability even during their respective turnaround efforts.

The common thread among DIN, WEN, and PFE is that their significant price declines have created valuations that appear to discount most negative scenarios while ignoring potential recovery pathways. Each company has active management initiatives aimed at addressing operational challenges—whether through cost management in restaurants or pipeline development in pharmaceuticals. For investors with patience and risk tolerance, these high-yield stocks represent opportunities to capture substantial income while positioning for potential capital appreciation as turnaround strategies unfold.