Stock dividends have long been the backbone of investor returns, a truth as old as the markets themselves. And while it’s easy to get excited about high-yield stocks, not all are created equal. Yet there are two ultra-high-yield dividend stocks, boasting yields greater than 6%, that are poised to beat the trend in 2024.
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Altria Group: A Monster Yield that’s Also a Safe Bet
Altria Group (NYSE: MO) is a legacy tobacco company that has stood the test of time, boasting a history that stretches beyond two centuries. Despite a recent stock decline due to doubts about the company’s ability to diversify beyond tobacco, Altria’s shares are now trading at an attractive 7.8x 2028 estimated earnings.
While the decline in smoking poses a significant challenge, Altria has a robust strategy to enter new markets, such as pod-based e-vapor products, offering potential growth opportunities. This indicates that Altria is not likely to be a value trap.
Moreover, Altria offers an impressive 9.48% dividend yield. Although such a high yield may seem risky, the management has affirmed plans to continue increasing the dividend by mid-single-digits annually. This provides shareholders with confidence in the company’s ability to sustain its towering yield.
Verizon Communications: A Top Income and Value Play for 2024
Verizon Communications (NYSE: VZ) is a leading wireless provider renowned for its network quality. Despite facing challenges such as costly 5G and fiber optic network rollout and intense competition, Verizon’s stock has declined by about 21% since 2020. However, several factors lead us to believe that Verizon will bounce back in 2024.
Free-cash-flow generation has surged over the past year, thanks to lower capital-expenditure costs, industry-leading profitability, and a strong position in the U.S. postpaid phone market. Analysts expect this trend to continue into 2024 and beyond.
Furthermore, Verizon’s stock appears to be deeply undervalued, trading at only 8.35x forward earnings, well below the average earnings multiple for its Dow Jones peers.
Lastly, Verizon pays an impressive 6.9% yield, which ranks among the highest in the telecom sector. The company has also increased its dividend for 17 consecutive years, underscoring its commitment to rewarding shareholders.
Should you invest $1,000 in Altria Group right now?
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