These are value stocks with reliable dividends.
High-yield dividend stocks are appealing because they can deliver significant income to investors through their quarterly payouts. Unfortunately, some high-yield stocks are incredibly risky — and the big dividends that are so attractive to investors today could dry up as quickly as tomorrow. If you’re interested in receiving a big payday from your stock investments, then it’s better to consider high-yield dividend value stocks. As value picks, these stocks come with solid underlying businesses — generating robust revenue and profits to support operations for many years to come. Here are seven value stocks with high dividend yields.
Altria Group (ticker: MO)
The maker of Marlboro cigarettes as well as various chewing tobacco and vaping products, Altria is certainly not a growth stock as the obvious health risks of these products ensure a pretty low ceiling. However, the addictive nature of nicotine coupled with the fact that MO has some of the most dominant brands on the planet adds up to a strong value proposition here. A well-run business with free cash flow of about $8 billion each year, there’s a firm foundation underneath Altria shares that should give investors peace of mind as they hang on for the very generous dividend in this value stock.
Current yield: 8.3%
Big Telecom stock AT&T is a great example of a dominant company with strong value characteristics. It has a $200 billion market cap, generates more than $170 billion in annual revenue and tallied an impressive $29 billion in free cash flow last year. While there’s admittedly a lack of breakneck growth ahead as AT&T is pretty much locked in a dead heat with domestic telecom rival Verizon Communications (VZ), income investors can take comfort in the strong financials. Those financials also support a generous and growing dividend that has been increased in each of the last 35 or so years.
Current yield: 7.2%
Biopharmaceutical giant Abbvie is the company behind Humira — a blockbuster antiflammatory drug — and other various treatments for autoimmune disorders, cancers and other diseases. While health care stocks working on potential virus treatments have generally been in focus across 2020, a slow-and-steady drugmaker like ABBV is just what the doctor ordered for income investors who are averse to risk. While the stock’s dividend is very generous, it remains less than half of total earnings per share and is perhaps ripe for big increases in the near future, too.
Current yield: 5.2%
Exxon Mobil Corp. (XOM)
It’s true that Exxon has been on the outs due to increased focus on climate change and the reduction of fossil fuel consumption. That said, in classic value stock fashion, this energy company has stabilized lately as investors have realized the inherent assets of its business and the chance of strong revenues in 2021 despite the long-term headwinds. Consider that XOM is valued at $160 billion, while it’s set to post nearly $220 billion in top line revenue next year. That’s a significant discount, which makes this battered name worth a look at current prices now that the worst of the declines seem to be behind it.
Current yield: 9%
International Business Machines (IBM)
IBM is another old-school name that some investors may have written off for more fashionable tech companies, but the fact remains that this company is more than a century old and has one of the most dominant and entrenched businesses on the planet — with around $9 billion in annual net income in recent years on some $70 billion in sales. It’s also important to remember that while IBM’s older business lines may not be doing so well, such as the physical servers people used to use before the cloud, IBM’s Watson artificial intelligence products and services are definitely on the right side of current tech trends and will ensure the company remains relevant for many years to come.
Current yield: 5.5%
Kimco Realty Corp. (KIM)
KIM is a real estate investment trust, or REIT, which is a special class of publicly traded stock that must deliver 90% of its taxable income back to shareholders in exchange for preferential tax treatment of its real estate assets. Those properties are primarily “grocery anchored” shopping centers and mixed-use assets, commonly referred to as strip malls. While Kimco has admittedly seen some pressures lately as e-commerce weighs on retailers and pandemic disruptions have shuttered some local restaurants, KIM has valuable locations that will remain in demand even if the current tenant makeup may change. Real estate has inherent value, and that means KIM stock has a strong floor underneath it like the other value stocks on this list.
Current yield: 6.2%
PPL Corp. (PPL)
Headquartered in Allentown, Pennsylvania, PPL delivers electricity to millions of customers in Kentucky, Virginia and Pennsylvania. It also operates electricity distribution infrastructure in the United Kingdom and supplies natural gas to about 330,000 customers across the U.S. As with other names on this list of high dividend yield value stocks, it’s unlikely we’ll ever see a ton of growth out of PPL — but it’s equally unlikely we will see a major disruption to this entrenched business model. That adds up to reliable revenue and profits, which powers a generous and consistent dividend.
Current yield: 5.6%
Seven high-yield dividend value stocks to buy:
— Altria Group (MO)
— AT&T (T)
— AbbVie (ABBV)
— Exxon Mobil Corp. (XOM)
— International Business Machines (IBM)
— Kimco Realty Corp. (KIM)
— PPL Corp. (PPL)
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Update 11/19/20: This article was published previously and has been updated with new information.