Treasury Yields Are Above 5%. These 4 Dividend Stocks Still Make the Cut

The 10-year Treasury yield reached 5.26% on September 29, its highest level of the past year. The bar is now higher for every dividend stock in a retirement portfolio, because a payout has to compete with a government-backed yield and keep growing. These four large-cap payers clear that bar with cash flow behind the check: a monthly-paying REIT, a telecom, a tobacco leader and a drug company giant, each paying out less than it earns on an adjusted basis.

Realty Income: 136 Monthly Raises and Still Climbing

Realty Income (NYSE:O) yields 5.68% at a share price of $54.44. Its latest monthly dividend of $0.2715 per share pays on October 15, and the annualized forward dividend stands at $3.258 per share.

Dividend safety: Realty Income raised its full-year 2026 AFFO (adjusted funds from operations, the REIT version of cash earnings) guidance to $4.44 to $4.45 per share, which easily covers the forward payout. Second-quarter AFFO reached $1.09 per share, up 3.8% year over year. The free cash flow yield sits at 7.52%, Fitch rates the company “A” and gives a Stable Outlook, and portfolio occupancy is 98.8%. On the track record, the company’s September 8 release announced its 136th common stock monthly dividend increase, and payment records show the monthly dividend rising from $0.1905 in October 2015 to today’s level.

Bull case: Realty Income is steadily evolving beyond its retail roots. Industrial assets made up 65% of second-quarter new investments by cash income, it announced a $6B partnership to develop large-scale data centers, and it raised 2026 investment volume guidance to $10.0B at a 7.3% initial cash yield. Its private capital platform already manages $3.5B in third-party assets, and on September 14 it unveiled a new European venture funded in euros to expand that business. The stock fell 10.72% over the past month as Treasury yields rose, which raised the yield on a business whose fundamentals kept improving.

Risk: Interest rates drive this stock. The 10-year moved from 4.96% on September 22 to 5.26% in a week, and net debt against annualized pro forma adjusted EBITDAre rose to 5.4x from 5.2x. Non-investment-grade tenants also generate 65.7% in annualized base rent.

Verizon: Free Cash Flow Surges After the Frontier Deal

Verizon (NYSE:VZ | VZ Price Prediction) pays a quarterly dividend of $0.7075 per share, for an annualized forward dividend of $2.83 against a share price of $45.87. That keeps Verizon squarely in high-yield territory even after an 18.28% year-to-date gain.

Dividend safety: Cash generation is the best part of this story. Second-quarter free cash flow reached $6.426B, up 27.1% year over year, on operating cash flow of $10.435B. Management guides full-year free cash flow to $21.94B to $22.14B and adjusted EPS to $4.99 to $5.04, easily exceeding the $2.83 annual payout. Verizon also expanded its 2026 buyback target to up to $4.5B, with $3.5B completed through the second quarter, a sign the dividend leaves cash to spare. Dividend growth has been steady: the quarterly dividend has stepped higher every year from $0.475 in 2010, with the latest raise from $0.69 to $0.7075 declared on January 30, 2026.

Bull case: Verizon is winning customers again. It added 184,000 postpaid phone subscribers in the second quarter versus a loss of 9,000 a year earlier, and churn improved to 0.92%. Broadband connections reached about 17.1M (up 34.5%), fiber connections rose 43.3% to 10.9M, and the adjusted EBITDA margin expanded to 40.1% from 37.1%. The stock slipped 8.3% over the past month, pushing its yield higher.

Risk: Debt. Total unsecured debt stands at $136.5B, and net unsecured leverage against adjusted EBITDA rose to 2.5x from 2.2x at year-end 2025 because of the Frontier acquisition. GAAP net income also fell 22.9% year over year in the second quarter.

Altria: Ultra-High-Yield Income Backed by Pricing Power

Altria (NYSE:MO) carries the highest yield on this list, 6.13% at $67.44 a share. Its quarterly dividend just rose to $1.11 from $1.06, raised the forward annual payout to $4.44, with the next payment due October 9.

Dividend safety: Full-year 2026 adjusted EPS guidance of $5.56 to $5.72 covers the $4.44 forward dividend, and first-quarter adjusted EPS of $1.32 beat estimates by 5.92%. Altria paid $7.0B in dividends in 2025 while still funding a $2B buyback, with $720M remaining as of the first quarter. The quarterly dividend has rose from $0.44 in 1999 to $1.11 today. At a forward P/E of about 12, the valuation remains modest even after a 22.63% year-to-date run.

Bull case: Marlboro holds a 39.7% retail share, and pricing power pushed smokeable segment operating income up 6.3% to $2.68B at 65.1% margins. Shipments of on! nicotine pouches grew 17.6%, and contract-manufactured export cigarettes add a fresh growth lever.

Risk: Volume erosion is persistent. Industry cigarette volumes fell about 5% in the first quarter after a 10% decline in 2025, Marlboro share slid 1.4 points, and on! share fell 4.2 points to 13.4%. Stockholders’ equity is negative at ($3.2B), and Wall Street is lukewarm, with 8 hold ratings against 4 buys and a $70 price target.

Pfizer: A 6.01% Yield With the CEO’s Dividend Commitment on Record

Pfizer (NYSE:PFE) yields 6.01% at $28.48 a share, paying $0.43 quarterly for a forward annual dividend of $1.72.

Dividend safety: This is the tightest coverage of the four, so read the details. Pfizer reaffirmed full-year adjusted EPS guidance of $2.80 to $3.00, easily above the payout, and posted second-quarter adjusted EPS of 77 cents. On a GAAP basis, though, trailing diluted EPS of $0.76 sits below the dividend after $4.3 billion in non-cash impairments. The free cash flow yield is 5.58%, interest coverage is 5.78x, and leverage ended the quarter at 2.7 times. Pfizer returned $4.9 billion in dividends in the first half while investing $5.5 billion in R&D, and it plans no buybacks in 2026. Chairman and CEO Albert Bourla was blunt. On the August 4 call, he said: “We feel extremely confident that, even in the most stretched scenarios that we are running, we will be able to maintain our dividend.”

There is a issue in the payment history retirees should know about. Payment history shows Pfizer cut its quarterly dividend to $0.16 from $0.32 in 2009, then rebuilt it to $0.43, where it has held since early 2025.

Bull case: Launched and acquired products generated $3.2 billion in second-quarter revenue, up 18% operationally, and management raised the midpoint of 2026 revenue guidance by $500 million. A Vyndamax patent settlement extends effective U.S. exclusivity to June 2031, and cost programs are now expected to deliver about $9.7 billion in net savings through 2029. At a forward P/E of about 10, investors are paying little for the obesity and oncology pipeline.

Risk: The dividend is frozen until growth returns, which management expects from 2029 onward. Pfizer faces an anticipated ~$1.5B hit from generic and biosimilar competition in 2026, plus most-favored-nation pricing and tariff uncertainty. The stock’s 20.31% year-to-date gain has also pushed shares close to the $28.88 average analyst target.

Four Income Engines Built for a 5% Treasury World

With the 10-year above 5%, cash flow coverage matters more for dividend payers, and all four of these names show it on an adjusted basis. Realty Income and Verizon offer the steadiest raise histories. Altria brings the highest yield with clear earnings coverage, and Pfizer pays more than 6% with its CEO publicly committed to the payout. Together they cover four sectors. They span real estate, telecom, consumer staples and healthcare, and upcoming quarterly earnings reports will show whether that coverage holds heading into the final quarter of 2026.

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