The London Stock Exchange is home to some of the best income stocks in the world. And right now, several FTSE stocks stand out, thanks to their enormous dividend yields. But one company that really stands out right now is Victrex (LSE:VCT).

A combination of external and internal pressures has dragged down the share price over the last 12 months. And yet it remains confident in rewarding loyal shareholders with juicy dividends. So much so that the FTSE 250 stock now pays a staggeringly-high 9.9% yield!

So could this be a rare opportunity to lock in an awesome passive income at a massively discounted price? Let’s find out.

The Victrex puzzle

As a quick introduction, Victrex is the world’s largest manufacturer of PEEK– a high-performance engineering polymer with pretty exceptional material properties.

PEEK’s chemically inert, biocompatible with the human body, electrically and thermally resistant, and offers impressive strength, all while being incredibly lightweight. As such, manufacturers within the automotive, aerospace, healthcare, and electronics sectors are increasingly substituting traditional metals such as aluminium with this polymer. And the steady increase in demand is reflected in the group’s rising PEEK volumes.

Yet, despite this higher demand, revenue and earnings are still struggling, sending the share price down almost 40% in the last 12 months. What’s going on?

Good strategy meets bad execution

While PEEK volumes have been rising, a combination of shifting product mix and stiff Chinese competition has resulted in average selling prices suffering.

As such, revenue growth over the last five years has pretty much flatlined. And the profit picture is even less impressive, as heavy investment into a new manufacturing plant in China weighed down on the bottom line.

The plant was supposed to improve Victrex’s competitive position in a key market. But this once-highly anticipated growth catalyst has so far proven to be a bit of a headache, with initial volumes struggling to ramp up and no clear breakeven timeline available.

Yet despite these stumbles, dividends are still being paid. How?

What’s behind the 9.9% yield?

While disappointing, operations at Victrex’s China plant are slowly getting back on track. And management is also expecting to deliver £10m in annualised savings by September 2027.

At the same time, new contracts are emerging from the group’s ‘mega programme pipeline’. This includes the firm’s Magma project, where PEEK piping is used for deepwater oil & gas production, with revenues expected to start materialising in 2026.

As such, management appears fairly confident about Victrex’s financial outlook, describing 2026 as a transitional year before a solid earnings recovery story kicks off in 2027.

In the meantime, dividends are being maintained with debt. That’s fine if the promised turnaround is successfully delivered. But if this expected recovery fails to materialise, Victrex could be stretching its balance sheet too thin, ultimately leading to a painful payout cut.

So, what’s the verdict?

The possibility of an earnings inflexion in 2027 is very real. But it relies on solid execution – something that Victrex hasn’t exactly demonstrated in recent years.

So, while a £5,000 investment does snap up 827 discounted shares and unlocks a near-£500 passive income, it comes with a high level of risk. And personally, I think there are other income stocks that look far more secure right now.