As 2025 fast approaches, one prevailing factor is economic uncertainty, and for income-seeking investors, the stock market offers several opportunities.
In this regard, affordable stocks exist with a reputation for consistently paying dividends over the years. Below are two equities to consider, as they combine strong yields with value pricing, making them standout choices for those looking to enhance their portfolios with steady cash flow.
AT&T (NYSE: T)
AT&T’s (NYSE: T) share price has had a stellar 2024, gaining almost 30% despite facing challenges such as competitive pressures in telecommunications.
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With expectations that this momentum may continue into 2025, its dividend remains compelling, yielding around 5%, making it one of the most attractive payouts in the sector.
This appealing dividend has also drawn investment from well-known entities like Ray Dalio’s Bridgewater Associates.
After divesting its media assets, AT&T’s pivot to focus on core telecom services has streamlined operations and may position it well for stable, long-term cash flows. This shift was evident in the company’s Q3 2024 earnings.
AT&T added 403,000 postpaid phone subscribers during the quarter and experienced a 6% EBITDA growth in its Mobility segment. Total revenues were $29 billion, while capital expenditures rose to $5.3 billion. Recent cost-cutting measures saw the company reduce net debt by $1.1 billion in Q3.
In 2025, the company may be even more attractive to dividend-hungry investors, given its potential to increase cash flow from several deals. For example, AT&T has agreed to sell its 70% stake in DirecTV, with proceeds potentially channeling toward its high-yielding dividend.
The company’s bullish outlook is further supported by factors like its fiber network expansion, which will meet the growing demand for high-speed internet from streaming and smart home tech, an area likely to boost revenue.
As of press time, T was trading at $22.20, down less than 0.1% over the past 24 hours. Despite this short-term pullback, T remains up 28% year-to-date.
Altria Group (NYSE: MO)
Altria (NYSE: MO), a key player in the tobacco industry, remains appealing to dividend-seeking investors with a yield of nearly 8%. Currently, MO pays a quarterly dividend of $1.02, translating to an annual dividend of $4.08 per share.
Heading into 2025, the company is estimated to issue a dividend payout of about $7 billion, though this is subject to change. The historical payments offer some assurance for investors, as Altria has increased its dividends by over 2,300% since 1985.
Meanwhile, the company remains in a strong position due to its business strategy, especially as cigarette consumption declines in the United States.
The stock has recently rallied, likely due to strategic initiatives such as diversification into noncombustible, smoke-free products, including the NJOY e-vapor lines. The high dividend yield has also attracted investors.
As of press time, MO was valued at $49, gaining almost 0.13% on the day. The equity has surged over 20% in 2024.
Despite this optimism, MO has a Wall Street consensus price target of $46 from seven analysts, three of whom recommend a ‘Sell’ recommendation.
In conclusion, both AT&T Inc. and Altria Group present strong cases for income-focused investors seeking high-yielding stocks with stable, long-term potential. Although each stock faces sector-specific challenges, their consistent dividend payments may provide investors with steady cash flow in the coming year.
