Reuben Gregg Brewer, The Motley Fool

Sun, Jun 22, 2025, 5:25 AM5 min read

• The average healthcare stock has a yield of just 1.7%.

• Medtronic's dividend yield is 3.3%.

• Alexandria Real Estate Equities' yield is 7.4%.

• 10 stocks we like better than Medtronic ›

The healthcare sector isn't exactly known for offering huge yields, with Health Care Select Sector SPDR (NYSEMKT: XLV) offering a yield of just 1.7%. If dividend investors take some time to dig into the sector, however, they can do much better. For example, Medtronic (NYSE: MDT) has a 3.3% yield today, and Alexandria Real Estate Equities (NYSE: ARE) is offering a yield of 7.4%. Here's what you need to know about each of these high-yield healthcare stocks.

Medtronic makes medical devices. It is one of the largest competitors in the space, making products across the cardiovascular, neuroscience, medical surgical, and diabetes categories. It has a leading position in each of the areas in which it operates, and it operates on a global scale.

That said, the last few years haven't been the best ones for the company. Innovation, which is highly important in the healthcare space, can be lumpy. And given Medtronic's size, the business has become a little cumbersome. Growth has stalled out, and profitability has come under pressure. Investors have focused on the negatives pushing the shares lower and the dividend yield up toward the high end of Medtronic's historical yield range.

If you are a dividend investor that thinks in decades and not days, however, this is likely to be an investment opportunity. The company's innovation pipeline is starting to turn into new-product introductions. As new products gain traction, financial performance is likely to improve. And management has been working to streamline the business with cost cuts and a move to refocus on its most profitable operations. To that end, the company is set to spin off its lower-margin diabetes division in 2026. The move is expected to be immediately accretive to earnings, and the dividend policy isn't expected to change.

All in, Medtronic is doing what it needs to do to get back on the growth path. And that should support continued dividend increases; the medical device maker only has two years to go before it hits Dividend King status (50+ years of annual dividend increases). June could be an opportune time to buy the stock hand over fist.

Alexandria is a real estate investment trust (REIT), which seems pretty far away from healthcare. Its primary focus is on office properties, which also seems a bit removed from healthcare. The key here is that the REIT owns biomedical research facilities, which combine research space and office space in one property. Both are important to each other since the research takes place in specialized space, while the analysis of that research takes place in a normal office environment. Alexandria is one of the largest pure play medical research REITs you can buy.