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Investors know adding high-yield dividend stocks to their portfolio is a great way to keep cash rolling in when the markets are volatile.
The problem is that the COVID-19 pandemic has hammered so many industries that finding companies with sustained dividends is difficult. A lot of formerly safe income sectors like banks, chemicals, REITs and oil and gas MLPs face the potential for dividend cuts if we get a second wave of the coronavirus.
But there is one sector of the economy that should hold up even if we see further economic damage. In fact, these companies are likely to see an increase in business if we see financial stress reappear anytime soon.
Must See: Your shot to collect $1,000 to $5,000 a week - regardless of how volatile the markets are swinging. (Find out more here...)
I am talking about sin stocks.
In good times and in bad, some people will smoke, drink, gamble, and otherwise carry on no matter what is happening in the world. When stressed, they will do more of these things. While perhaps bad news for them, it is fantastic news for us as dividend-starved investors.
It might be a little controversial to profit off of some of these products. But your financial wellbeing and retirement goals are too important to avoid these fat dividend payers. After all, someone is banking these profits.
Here are the three best dividend-paying stocks for these uncertain times...
Dip Your Toes into Cannabis with This Dividend Stock
Altria Group Inc. (NYSE: MO) has been a great dividend stock for decades.
The company makes cigarettes, smokeless products, and wine in the United States. While best known for its Marlboro line of cigarettes, the company also owns several wineries, including Chateau Ste. Michelle and 14 Hands, Stag's Leap Wine Cellars, Conn Creek, Patz & Hall, and Erath wine brands. Altria also imports and sells Antinori, Torres, and Villa Maria Estate wines.
The company also has a substantial investment in AB InBev (NYSE: BUD), the parent company for Budweiser and several other popular beers. It owns 10.5% of the world's largest brewer.
But what excites us the most about its future is that it's branching out into the world of cannabis.
Altria also owns 45% of Cronos Group Inc. (NASDAQ: CRON), a leading cannabis company. That plugs it into what's going to be one of the most explosive sectors on the market over the coming years.
When it comes to bad habits and steady profits, Altria pretty much covers all the bases. And what all these sectors have in common is they are near recession-proof. People are buying these products whether stocks are up or down or in between.
The company has generated over $8 billion in free cash flow over the last year. Six billion dollars of that was returned to shareholders as cash dividends.
Right now, that equates to a yield of 8.43%. Lock it in now, because the cash will keep coming even as the share price grows.
Think of This Stock as a Cash Machine
Phillip Morris International Inc. (NYSE: PM) sells Phillip Morris brands outside the United States. It has been making a big push into a next-generation nicotine product comprising combustibles, heated tobacco, and vaping. It has an early lead in heated tobacco products, and many think that will become a much bigger business than it is today.
While there is a global trend toward reducing smoking, it's not happening all that fast. Nicotine is addictive, and many people trying to quit soon find themselves once again outside in the rain to get a quick smoke during their break.
Phillip Morris is also a free cash flow machine that pays out fat dividends to shareholders. At the current price, the stock yields 6.48%.
That will line your pockets for years to come.
But our top dividend stock has even higher payday potential, and it's an opportunity that won't last long at these prices.
In fact, it just hiked its dividend right in the middle of the latest downturn...
Best High-Yield Dividend Stock to Buy Today
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.