Altria Group won't face too many higher costs with the Trump administration's new tariff plan.
The tobacco giant has increased its dividend for 55 consecutive years.
AT&T's refocus on its core telecom business has made the business more stable than in previous years.
There's seemingly never a dull moment in the stock market, and this year has been no different. Virtually all major indexes have experienced high volatility, major tech stocks are slumping, new tariffs threaten to throw off supply chains, and recession chances are seemingly increasing by the day.
Given the uncertainty surrounding the stock market and economy right now, dividend stocks look more appealing than usual. You can't control how a company's stock price will move, but you can guarantee yourself income by investing in high-quality dividend stocks.
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If you have $1,000 available to invest (meaning you have an emergency fund saved, at minimum), the following two high-yield dividend stocks are good options. Investing $500 in each could pay investors close to $55 per year at current yields.
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1. Altria Group
Tobacco titan Altria Group(NYSE: MO) owns some of the industry's most notable brands, including Marlboro, Black & Mild, Copenhagen, and Skoal. Although Altria's stock isn't known for high growth, it has had an impressive year through April 29, up 10%, while the S&P 500 market index is down over 5%.
While many U.S. companies are scrambling to figure out how to deal with the newly announced tariffs from the Trump administration, Altria is in a good position because it doesn't rely heavily on imports for its business.
Although Altria sometimes relies on third-party sellers that may purchase tobacco leaves internationally, the company notes that American-grown tobacco is its "backbone." That should help keep its costs relatively stable as other companies anticipate the opposite.
Even if Altria's costs increase slightly, one thing's for sure: Its dividend will remain one of the more lucrative ones you can find from an S&P 500 company. Altria's dividend yield is currently around 7%, which is over 5.5 times the S&P 500 average.
It's not just the high yield, though -- it's the consistency investors can expect. Altria has increased its dividend for 55 consecutive years, making it a Dividend King. It knows that stock price growth potential isn't what draws most investors in, so it prioritizes supporting and growing its dividends.
There are long-term concerns with Altria's business as more adults begin to quit smoking, but the company has been adamant about making necessary investments to grow its smokeless segments. They haven't quite hit a home run in that area yet (in fact, they've had a couple of huge misses), but impressive progress has been made with their new brand, NJOY.
Altria has time to figure out the next chapter in its company's history, but in the meantime, investors can benefit from its high-yield dividend.
2. AT&T
AT&T(NYSE: T) isn't off the hook regarding new tariffs, because it relies heavily on imports for devices and network equipment. However, one thing it has going for it is the cash-cow nature of the telecom business.
The telecom industry has become increasingly important as the world becomes more digitally connected, and AT&T is one of the companies leading the way. Since ditching its media and entertainment ambitions and focusing on its core telecom business, AT&T has returned to a more stable path that investors have long hoped for.
Up over 19% through April 29, AT&T's stock has been one of the surprise stories of the stock market, but much like Altria, investors don't flock to AT&T's stock for its stock price growth potential. It's all about the dividend.
Even after it was cut by nearly half in early 2022, AT&T's dividend has remained attractive with an average yield of around 6.6% since then. Its current yield is around 4%, which is lower than usual for AT&T, but I'd imagine investors appreciate the stock price growth that caused the yield to drop.
At one point, investors were concerned about AT&T's dividend stability, but those concerns have largely gone away with the company's financials improving since trimming its business to focus on telecom.
The concerns resurfaced with the new tariff announcements, but AT&T has stated that it plans to pass on additional cellphone tariff costs to customers. In theory, AT&T risks losing customers to other competitors by doing so, but Verizon noted that it would do the same, pointing to a broader industry strategy.
AT&T is back to the point where its free cash flow is healthy enough to cover its dividend and debt obligations, and make the necessary investments to continue growing. It's a dividend stock that can be a long-term piece of many stock portfolios.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
