Key Takeaways:
- Verizon offers a 6% forward dividend yield, generates strong cash flow, and analysts see about 10% upside from current levels.
- Altria has a 7.5% forward dividend yield and has steady cash flow from its tobacco and reduced-risk products.
- British American Tobacco has a 7.8% dividend yield, and analysts think the stock has over 10% upside today.
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Dividend stocks can provide investors with steady cash flow, making them a great addition to any portfolio.
Here are three high-yield dividend stocks that pay investors regular cash payments just for holding the stock.
Stocks 2 and 3 offer dividend yields over 7%, meaning a $100,000 investment in these stocks could generate $7,000/year in annual dividend income, or about $583/month.
1: Verizon (VZ)
Verizon is one of the largest telecom companies in the U.S., providing wireless, broadband, and fiber services to millions of customers.
The stock currently offers just over a 6% forward dividend yield, making it an attractive option for investors looking for dividend income.
Why Verizon looks interesting:
- The company generates strong, consistent free cash flow, which supports its high dividend.
- Analysts see about 10% upside for the stock from current levels.
Verizon may not be a high-growth stock, but it could be a great long-term hold for investors looking for steady dividend income.
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2: Altria (MO)
Altria is the company behind Marlboro and other tobacco brands, and it currently has a 7.5% forward dividend yield.
Even though tobacco consumption has been declining, Altria is expanding into reduced-risk products like vaping and still maintains strong pricing power.
Analysts expect no revenue growth over the next 3 years, but normalized earnings per share, or EPS, and dividends are each expected to grow about 3-4% annually.
Even though this is pretty low growth, investors don’t necessarily need the company to see rapid growth to make a good return, since the stock already has a 7.5% forward dividend yield:
Key factors to consider:
- The stock is up over 30% in the past year, which is why analysts think the stock is fairly valued today.
- Even if the stock is fairly valued, Altria still offers a high dividend yield, which might make it appealing for dividend investors.
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3: British American Tobacco (BATS)
British American Tobacco, a global leader in the tobacco industry, currently offers a 7.8% forward dividend yield. This makes it the highest-yielding stock on this list.
The company is investing in reduced-risk products, such as vaping and heated tobacco, which could help sustain long-term revenue growth.
BAT has an average analyst price target of $44/share, which implies that analysts think the stock has just over 10% upside.
Why this stock stands out:
- Analysts expect the company’s revenue and earnings to grow in the future from reduced -risk products.
- British American Tobacco is Michael Burry’s second-largest holding, signaling confidence from a well-known investor.
With its strong yield and long-term growth strategy, British American Tobacco could be the best dividend stock on this list.
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TIKR Takeaway
Verizon, Altria, and British American Tobacco all offer high dividend yields, but British American Tobacco stands out as the most undervalued stock today.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks and was built for investors who think of buying stocks as buying a piece of a business.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
