The Nasdaq exchange is usually known for its concentration on technology and growth companies, which typically do not pay high dividends. Still, sometimes there are stocks with unusually high dividend yields that can catch investors' attention. Are these dividends really opportunities for profitable investments, or could there be hidden problems behind them?

In the following article, we'll take a look at the three stocks with the highest dividend yields on the Nasdaq and find out if there are solid investment opportunities behind these enticing numbers or if you need to be wary.

Which 3 stocks are they? 👇

DouYu International $DOYU+3.5%

DouYu International…

DOYU

$8.61 $0.29 +3.49%

Capital Structure

Market Cap

275.3M

Enterpr. Val.

-2.1B

Valuation

P/E

-15.7

P/S

0.4

Open $8.34

Day range $8.20 - $8.63

52 week range $6.29 - $20.17

Incredible 62.9% dividend yield

DouYu International, a Chinese e-sports streaming company, stands out with a dividend yield of 62.9%. However, this yield is the result of an extraordinary dividend paid on September 3, 2024, of $9.76 per share. This represented 52% of DouYu's share price on the date the dividend was paid.

It is important to note that this extraordinary dividend is the exception rather than the rule. DouYu has had three years of declining earnings and financial problems, suggesting that this high yield is due to an effort to improve the company's image rather than a sustained profit trend. The company's stock has experienced a dramatic decline, with the price down 96% since its peak in 2021. Thus, this stock represents more of a speculation than a stable investment.

Icahn Enterprises $IEP-1.4%

Icahn Enterprises L.P.

IEP

$12.94 -$0.18 -1.37%

Capital Structure

Market Cap

6.2B

Enterpr. Val.

11.4B

Valuation

P/E

-11.7

P/S

0.6

Open $13.10

Day range $12.73 - $13.12

52 week range $9.72 - $22.59

37% dividend yield

Icahn Enterprises, the investment company of billionaire Carl Icahn, offers a dividend yield of 37%. This yield comes from regular quarterly payouts of $1 per unit. While this looks enticing, it's important to note that Icahn Enterprises operates as a limited partnership, which means these payouts are distribution payments rather than traditional dividends.

The high yield is the result of a 48% drop in the unit price over the past year. Icahn Enterprises invests in risky businesses and has faced significant losses recently, suggesting that high yields may be an indicator of trouble. Thus, in the current situation, it may be a high-risk investment.

Torm $TRMD-3.6%

TORM plc

TRMD

$35.11 -$1.33 -3.65%

Capital Structure

Market Cap

3.3B

Enterpr. Val.

4.1B

Valuation

P/E

4.5

P/S

2.0

Open $34.77

Day range $34.45 - $35.26

52 week range $25.28 - $40.47

19.1% dividend yield

Torm, a Danish bunker operator, reports a dividend yield of 19.1%. The company is struggling with the declining importance of fossil fuels due to the growing popularity of alternative energies, but it still shows strong revenue growth of 37% over the past three years and a more than threefold increase in free cash flow.

Torm pays dividends based on excess liquidity and appears to maintain solid financial health despite the general downturn in the fossil fuel industry. However, it is important to keep in mind that the transition to alternative energy may affect the demand for bunker ships in the future. Torm is therefore a solid investment in the short term, but may be risky in the longer term.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.

Source..