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High-yield stocks pay out dividends that are significantly higher than the market average. For example, the S&P 500’s current yield is only ~1.2%.

High-yield stocks can be particularly beneficial in supplementing retirement income. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.

Next on our list of high-dividend stocks to review is Hooker Furnishings Corp. (HOFT).

Business Overview

Hooker Furnishings is a designer, marketer, and importer of furniture—including casegoods, leather, and fabric-upholstered pieces—along with lighting, accessories, and home décor for residential, hospitality, and contract markets. The company also produces premium custom leather and fabric furniture domestically. As the largest supplier of case goods and upholstery in the U.S., Hooker reaches over 75% of retail furniture distribution. Founded in 1924 and headquartered in Martinsville, Virginia, the company currently has a market capitalization of $93 million.

On September 11, 2025, Hooker Furnishings reported Q2 fiscal 2026 results (fiscal year ends January 2026), showing a 14% decline in net sales compared to last year, driven by weak demand and pre-pandemic home sales levels. High interest rates and elevated home prices have pressured the home furnishings sector over the past two years. Despite cost-cutting measures, loss per share widened from $0.11 to $0.31, missing analysts’ estimates by $0.19. This marked the seventh consecutive quarter of earnings misses. Consequently, our EPS forecast for fiscal 2026 has been reduced from $0.50 to $0.25.

Management cited weak new home sales and persistent inflation as key challenges. The company has reported weak sales and earnings for nine straight quarters. Assuming no significant tariffs are imposed on key trading partners, Hooker Furnishings could improve performance next year. The stock has fallen 22% this year due to these weak results.

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Source: Investor Relations

Growth Prospects

Hooker Furnishings has experienced a highly volatile business performance, failing to grow its earnings over the past decade. The company posted steady earnings growth until 2020 but was severely impacted by the coronavirus pandemic. Following a partial recovery, it faced another setback from surging inflation, which prompted the Federal Reserve to raise interest rates to a 23-year high. Combined with elevated home prices, these factors have constrained demand for new homes, creating a significant headwind for Hooker’s business.

Looking ahead, the outlook for Hooker Furnishings appears more favorable. Inflation is expected to moderate, and the Fed is likely to lower interest rates in the coming years. If these trends materialize, demand for new homes should strengthen, supporting a recovery in both sales and earnings for the company.

Given the business’s historical volatility, a conservative approach to growth expectations is warranted. Nevertheless, with this year’s exceptionally low comparison base, we project an average annual EPS growth of 32% over the next five years.

Competitive Advantages & Recession Performance

Hooker Furnishings’ competitive advantage lies in its scale, brand recognition, and extensive distribution network. As the largest supplier of case goods and upholstery in the U.S., the company reaches over 75% of retail furniture channels. Its combination of imported and domestically manufactured furniture, including premium custom leather and fabric pieces, allows Hooker to serve a wide range of residential, hospitality, and contract markets.

This diversification, along with decades of design expertise, positions the company to maintain a strong market presence despite sector volatility.

In terms of recession performance, Hooker Furnishings has historically faced challenges during economic downturns due to its reliance on new-home sales and discretionary spending. While the company experienced consistent growth before 2020, the COVID-19 pandemic and subsequent inflationary pressures highlighted its vulnerability to macroeconomic shocks.

Nevertheless, Hooker’s established brand, broad distribution, and cost management initiatives provide some resilience, allowing it to navigate recessions better than smaller, less diversified competitors.

Dividend Analysis

Hooker Furnishings offers a relatively attractive dividend yield of 10.4%, reflecting its commitment to returning capital to shareholders despite recent earnings volatility.

While the company has faced multiple quarters of weak performance, its ability to sustain dividends is supported by cost management measures and a diversified product portfolio. Investors should view the dividend as a strong income component, though potential fluctuations in earnings may affect its long-term stability.

However, the dividend is at risk of a cut this year, as the company has an over-100 % payout ratio. The company is expected to earn $0.25 per share this year while paying a dividend of $0.92 per share.

Final Thoughts

Hooker Furnishings has declined by over 36% this year due to the effects of high interest rates and inflation. While a recovery is likely over the coming years, investors should expect a gradual turnaround. However, the dividend is at risk of a cut this year because of the high payout.

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