High-growth AI stocks are undoubtedly the most appealing investments right now. But one cannot ignore the peace of mind passive income stocks offer when high-growth stocks go through their roller coaster ride. Long-term income investors looking to scoop up some quality stocks now might want to take a look at these three high-yield dividend stocks yielding above 5%.
Dividend Stock No. 1: Altria
Tobacco giant Altria (MO) has earned its name among passive income investors with its high yield of 5.7%, making it one of the highest-yielding blue-chip dividend plays in the market. It’s not just the yield that has made Altria a reliable dividend stock. The company has spent decades rewarding shareholders with massive dividends, steady cash flow, and consistent payout increases. It holds a 56-year track record of dividend hikes, earning it a place among the “Dividend Kings.”
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Altria Group owns several of the most well-known tobacco brands in the U.S., with Marlboro remaining its flagship cigarette brand. Despite long-term declines in cigarette volumes across the industry, the company has maintained strong profitability through pricing power, brand loyalty, and disciplined cost management. It has also expanded into oral nicotine products and e-vapor market with brands such as on! nicotine pouches and NJOY products.
Its high forward payout ratio of 76% has often raised questions about dividend sustainability. But in the recent first quarter, adjusted earnings increased 7.3% and the company paid out $1.8 billion in dividends. For the full year, Altria expects adjusted EPS growth of 2.5% to 5.5% year over year. That leaves room for Altria to continue funding its dividend while still supporting buybacks and investments in smoke-free products.
On Wall Street, MO stock has a consensus “Moderate Buy” rating. Of the 14 analysts covering the stock, five rate it a “Strong Buy,” seven have a “Hold” rating, one has a “Moderate Sell,” and one recommends a “Strong Sell.” MO stock is up 25% YTD, surpassing its average target price of $68.82. However, the high price estimate of $82 implies the stock could climb by 11% from current levels.
www.barchart.com Dividend Stock No. 2: Pfizer
Pharmaceutical giant Pfizer (PFE) has also built a reputation as a dependable dividend stock. Pfizer offers a dividend yield of around 6.6%, making it one of the highest-yielding large-cap health care stocks on the market. Pfizer became an even more renowned health care stock during the COVID-19 pandemic thanks to its vaccine and antiviral products. However, investors started questioning whether it can sustain such a high dividend yield after the sharp decline in COVID-related revenue in the post-pandemic era.
But Pfizer continues to generate enormous cash flow from its diversified pharmaceutical business. It has developed a diverse portfolio of medicines and vaccines across oncology, immunology, cardiovascular disease, and rare diseases. This diversification helps stabilize revenue even when certain drugs face patent expirations or weaker demand. In the most recent first quarter, while Pfizer’s revenue increased by 5% to $14.5 billion, adjusted EPS declined by 18% to $0.75. Nonetheless, the company paid $2.4 billion in cash dividends.
Furthermore, Pfizer has increased its dividend consistently for the past 17 years. Its forward payout ratio of 56% also remains reasonable, leaving room for reinvestment in pipeline development.
Wall Street rates PFE stock an overall “Hold.” Out of the 28 analysts who cover PFE, eight rate it a “Strong Buy,” one rates it a “Moderate Buy,” 16 rate it a “Hold,” and three suggest a “Strong Sell.” The average price target of $29.28 suggests the stock can climb by 13% from current levels. However, its high target price of $36 implies upside potential of 39% over the next 12 months.
www.barchart.com Dividend Stock No. 3: Verizon Communications
Telecom giant Verizon Communications (VZ) has long been considered one of the market’s classic dividend stocks. It offers a forward dividend yield of 5.9%, significantly higher than the S&P 500 average, and remains attractive for income-focused portfolios.
Verizon runs one of the biggest wireless communication networks across the U.S. It provides wireless phone services, high-speed internet, broadband, 5G network services, and business communication solutions to consumers and enterprises. Since wireless connectivity is an essential service, it generates consistent cash flows for the company. This stability has allowed Verizon to maintain its dividend payouts for years.
In the first quarter, Verizon’s adjusted earnings increased 7.6% to $1.28 per share and generated $3.8 billion in free cash flow (FCF). The company expects adjusted earnings to increase by 5% to 6% in 2026. It also expects to generate FCF of around $21.5 billion, which would potentially be its highest since 2020. Importantly, Verizon has increased its dividends for the past 22 years. The company is on the verge of joining the “Dividend Aristocrats,” that is companies that have increased their dividends for 25 years consecutively.
Furthermore, Verizon’s forward payout ratio sits comfortably at 57%, leaving room for further dividend hikes and also allowing the company to pay its debt and reinvest in the business.
Overall, Verizon stock has earned a “Moderate Buy” recommendation on Wall Street. Of the 29 analysts that cover the stock, nine rate it a “Strong Buy,” two recommend a “Moderate Buy,” and 18 suggest a “Hold.” The stock’s average target price of $51.92 suggests a potential upside of 7.4% from current levels. But its Street-high estimate of $71 implies VZ stock can go as high as 47% in the next 12 months.
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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