This is a guest contribution by Bob Ciura of Sure Dividend. Sure Dividend helps individual investors build high quality dividend growth portfolios for the long run.
High dividend stocks are attractive for income investors. With the S&P 500 average yield at just 1.3%, it has gotten harder to find suitable yields in the stock market. And with the Federal Reserve poised to cut interest rates at some point this year, yields on savings accounts and CDs are likely to decline as well.
Fortunately, there are still plenty of quality high dividend stocks to choose from. The following 3 stocks have high yields above 5%, and the ability to raise their dividends over time.
Altria Group (MO)
Altria is a tobacco stock that sells cigarettes, chewing tobacco, cigars, e-cigarettes, and more under a variety of brands, including Marlboro, Skoal, and Copenhagen, among others.
This is a period of transition for Altria. The decline in the U.S. smoking rate continues. In response, Altria has invested heavily in new products that appeal to changing consumer preferences, as the smoke-free category continues to grow.
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The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the Canadian cannabis producer Cronos Group (CRON).
On April 29, 2025, Altria Group reported its financial results for the first quarter of 2025. The company posted net revenues of $5.26 billion, a 5.7% decline from the same period in 2024, attributed primarily to lower cigarette shipment volumes, which fell by 13.7%.
Despite this, adjusted diluted earnings per share (EPS) rose by 6% year-over-year to $1.23, surpassing analyst expectations of $1.19.
In the smokeable products segment, net revenues declined by 5.8%, but adjusted operating companies’ income increased by 1.2%, driven by higher pricing and lower manufacturing costs. The oral tobacco products segment saw a 0.5% increase in net revenues, supported by an 18% rise in on! nicotine pouch shipments.
Altria continued its shareholder return initiatives, repurchasing 5.7 million shares for $326 million and paying $1.7 billion in dividends during the quarter. The company reaffirmed its full-year 2025 adjusted diluted EPS guidance of $5.30 to $5.45, representing a 2% to 5% increase over 2024.
Altria ranks very highly in terms of safety because the company has tremendous competitive advantages. It operates in a highly regulated industry, which virtually eliminates the threat of new competition in the tobacco industry. Altria enjoys strong brands across its product portfolio, including the No. 1 cigarette brand. As a result, it has pricing power and brand loyalty.
Altria targets a dividend payout ratio of 80% of its annual adjusted EPS. This allows the company to reinvest sufficiently in its core business objectives, as well as reward shareholders with a rising dividend. The company has increased its dividend for 55 consecutive years and the stock currently yields 6.9%.
United Parcel Service, Inc. (UPS)
United Parcel Service, founded in 1907 and headquartered in Atlanta, GA, is a logistics and package delivery company that offers services including transportation, distribution, ground freight, ocean freight, insurance, and financing. Its operations are split into three segments: US Domestic Package, International Package, and Supply Chain & Freight.
On April 29, 2025, UPS reported first quarter 2025 results for the period ending March 31st, 2025. For the quarter, the company generated revenue of $21.5 billion, a 0.7% year-over-year decrease. The U.S. Domestic segment (making up 67% of sales) saw a 1.4% revenue increase, with International also posting a 2.7% revenue increase, while Supply Chain Solutions saw a 15% decrease. Adjusted net income equaled $1.49 per share, up 4.2% year-over-year.
With an uncertain economic landscape ahead, UPS is reducing costs to support its earnings growth. The company announced it expects to reduce its headcount by roughly 20,000 in 2025, and close 73 buildings by the end of June. Through these initiatives, it expects to generate $3.5 billion of cost savings.
UPS also has growth initiatives in place. UPS has been experiencing a number of benefits in recent years. One such tailwind is e-commerce, which leads to growth in the number of packages that must be transported across the country. With online shopping continuing to outpace brick-and-mortar growth for the foreseeable future, UPS should continue to benefit from strong demand for its services.
As an industry leader, the company has the ability to pay a high dividend as well as raise the dividend regularly. UPS announced it increased its quarterly dividend by one penny to $1.64 on February 5, 2024, marking its 16th consecutive annual increase. UPS stock currently yields 6.6%.
AES Corp. (AES)
The AES (Applied Energy Services) Corporation has businesses in 14 countries and a portfolio of approximately 160 generation facilities. AES produces power through various fuel types, such as gas, renewables, coal, and oil/diesel.
The company has more than 36,000 Gross MW in operation. In 2024, AES produced $12.3 billion in revenues.
AES Corporation reported first quarter results on May 1st, 2025, for the period ending March 31, 2025. Adjusted EPS decreased 46% to $0.27 for Q1 2025, which missed analyst estimates by $0.07.
The company completed construction of 643 MW of energy storage and solar in the quarter, and signed or awarded new long-term PPAs for 443 MW of solar and energy storage.
The company constructed and acquired 3 GW of renewable energy in 2024, as well as constructed a 670 MW combined cycle gas plant in Panama. Leadership maintained its 2025 guidance, expecting adjusted EPS of $2.10 to $2.26 for the full fiscal year.
In the last nine and five years, AES Corporation has increased adjusted EPS by a 6.3% and 9.5% compound annual growth rate, respectively. The company is actively engaged in developing and acquiring new energy projects; it currently has a backlog of nearly 12 GW of renewables. AES expects to complete the majority of these projects over the next three years. Management targets at least 10% CAGR in US Utilities rate base and is also forecasting 7% to 9% annual adjusted EPS growth through 2027.
This solid growth should allow the company to continue raising its dividend each year. AES’ payout ratio has remained fairly stable and is currently well covered. Its payout ratio has never exceeded half of its adjusted earnings, and we see the dividend continuing to grow as it has for the past 11 years. AES stock currently yields 6.7%.
Disclosure: No positions in any stocks mentioned
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