Two High-Yield Dividend Shares Worth Investing in by 2025 (adjusted)
Building long-term wealth is no small feat, and dividend-paying stocks have proven their worth in this area over the past century. Dividends have consistently accounted for a significant portion of total stock-market returns, even as tech giants have outperformed some high-yield stocks in recent years.
The current market dynamics have created an intriguing opportunity for investors, pushing certain fundamentally sound companies into value territory. Two such stocks that stand out as top buys for 2025 are Altria Group and Verizon Communications.
Altria Group: Adapting to a Changing World (MO)
Altria, with its century-old legacy and iconic brands like Marlboro, has shown remarkable resilience. Despite broader market concerns about declining smoking rates, investors can currently buy shares at an attractive price point.
The company's stock trades at just 9.87 times forward earnings, significantly lower than the S&P 500's multiple of 24.2. This discount hides an intriguing story — Altria's innovative efforts in non-traditional tobacco products, like oral tobacco and nicotine pouches, are yielding promising results.
Management's strategic plan envisions expanding the company's presence in alternative nicotine products. Believing in the opportunity, investors can benefit from Altria's growing success in these emerging areas.
But what truly sets Altria apart is its remarkable dividend. With a yield of 7.8%, it stands out in a sea of S&P 500-listed companies. Moreover, the company's comfortable payout ratio of 66.9% implies this generous dividend isn't a fleeting luxury but a steadfast, sustainable feature.
Verizon Communications: Navigating the Challenges (VZ)
Verizon is not just another telecom company. It serves millions of customers with its nationwide wireless network. But the past few years have been rough on Verizon's stock price, due to heavy spending on network upgrades and competitive pressures.
However, the rising tide of network buildouts has passed, and Verizon is starting to see the sunny side. Its overview has shifted significantly, as major network investments move into the rearview mirror.
Verizon's cash flow narrative has undergone a transformation, and its free cash flow has surged in the past 36 months. The wireless industry has also matured, necessitating pricing discipline.
All these factors contribute to a tantalizing yield of 6.78%, making Verizon a compelling choice for income-focused investors. Though a high payout ratio of 115% raises eyebrows, investors can take comfort in Verizon's unbroken 18-year streak of dividend hikes, a testament to its commitment to its shareholders.
Why Invest in Altria and Verizon?
Both Altria and Verizon have become outcasts in the eyes of Wall Street. But their single-digit earnings multiples, coupled with eye-catching dividend yields that beat the S&P 500's average payout, create an alluring proposition.
What truly sets these high-yield stocks apart is their staying power. Rather than speculative traps, they are proven market leaders with clear objectives.
In the case of Altria, that means navigating the transition to smoke-free alternatives. For Verizon, it means capitalizing on its 5G network and AI-driven enterprise solutions. No matter the headwinds, these companies' long-term projections paint a promising picture for income-focused investors.
- Investors looking for long-term wealth accumulation might consider Altria Group, given its century-old legacy and attractive price point, which is substantially lower than the S&P 500's multiple.
- Altria's innovative efforts in non-traditional tobacco products, such as oral tobacco and nicotine pouches, provide promising growth opportunities for investors seeking dividend income with a yield of 7.8%.
- Despite the challenges faced by Verizon Communications in recent years, its low price point and high dividend yield of 6.78% make it an attractive choice for income-focused investors, especially considering its maturing wireless industry and improving cash flow narrative.
- In the context of finance and investing, the potential for long-term wealth creation, combined with the consistent dividend payments and low price points of both Altria Group and Verizon Communications, may pose an intriguing opportunity for investors seeking dividend income over the short and long term.
){kind=link}