This stock has a jaw-dropping dividend yield of 39%: Time to buy?

Brilliant Earth Group (NASDAQ: BRLT), a specialty jewelry retailer known for ethically sourced diamonds, is among the top names on Wall Street offering significant dividends for investors.

Currently, the company is paying a striking 39.84% dividend yield, an eye-catching figure in a market where most dividend stocks rarely exceed 5%. Year-to-date, BRLT’s share price has gained nearly 17% trading at $2.5 as of press time. 

BRLT YTD stock price chart. Source: Finbold

For income-seeking investors, however, there are several fundamentals worth considering before buying Brilliant Earth shares.

From a financial perspective, the company delivered better-than-expected results for the second quarter of 2025, reporting earnings of $0.01 per share. Analysts had projected a loss of $0.01 per share, making the result a 200% positive earnings surprise.

Still, this marks a decline from the $0.03 per share reported in the same quarter last year. Revenue for the quarter came in at $108.94 million, topping Wall Street’s estimate of $103.7 million and improving slightly from $105.43 million in the year-ago period.

Wall Street cautious on BRLT stock 

On Wall Street, analysts remain cautious, projecting a challenging year ahead for Brilliant Earth. Based on ratings from three analysts at TipRanks, BRLT holds a consensus ‘Hold’ recommendation, with no ‘Buy’ or ‘Sell’ ratings. The 12-month price target averages $2.10, implying a 16.33% downside from the stock’s recent close at $2.51.

BRLT 12-month stock price prediction. Source: TipRanks

Forecasts range from a high of $2.20 to a low of $2, suggesting limited upside potential in the near term.

It’s also worth noting that the retail trade sector is highly competitive and cyclical, leaving BRLT exposed to fluctuations in consumer spending and broader economic conditions.

Overall, for income-focused investors, BRLT’s sky-high yield may look tempting, but the numbers suggest it could be more of a dividend trap than a sustainable source of long-term returns. 

While the company’s ethical jewelry brand resonates with modern consumers, its fundamentals may restrict its ability to maintain shareholder payouts at current levels.

Featured image via Shutterstock

Source: https://finbold.com/this-stock-has-a-jaw-dropping-dividend-yield-of-39-time-to-buy/