Verizon Yields Over 6%. These 3 Dividend Giants Offer More Income Opportunities

Four of the market’s biggest income payers are heading into year-end with yields their businesses can actually support. Verizon Communications (NYSE:VZ | VZ Price Prediction) yields 6.18%, and it sits alongside Realty Income (NYSE:O), Altria Group (NYSE:MO) and PepsiCo (NASDAQ:PEP) in a basket where profits or cash flow exceed the dividend every time. Here is what supports each payout, and the one risk to watch with each.

Verizon Communications: An Ultra-High Yield Funded by Record Cash Flow

Dividend safety: Verizon earned $3.84 per diluted share over the trailing twelve months, against an annual dividend of $2.795 per share. That gives it the highest yield on this list at 6.18%, putting it in ultra-high-yield territory with earnings left over after the payout. Cash flow tells the same story. First-half free cash flow reached $10.2 billion, while dividends over the same period cost $5.9 billion. In July, management raised its full-year FCF growth outlook to 9%-10%.

Debt metrics are moving improving as well. Verizon paid off substantially all of Frontier’s debt 6 months ahead of schedule, and net unsecured debt to adjusted EBITDA stood at 2.5x, with management on track to reach its target leverage range in the 2027 time frame. Verizon’s dividend record shows a raise every year since 2007, most recently to a quarterly $0.7075. As CEO Dan Schulman put it on the July call: “We are growing our dividend, and we are paying down our debt.”

Bull case: The wireless turnaround has started. Verizon added 184,000 postpaid phones in the second quarter, the adjusted EBITDA margin rose to a record 40.1%, and broadband subscribers now total over 17.1 million. A dark fiber deal with Google worth over $1 billion opens an AI infrastructure revenue stream, and the buyback target was raised to up to $4.5 billion. Shares closed at $44.63, up 17.12% year to date, after slipping 1.26% Friday as telecom stocks sold off on news of Elon Musk pushing into the industry (Barron’s).

Risk: Reported profit is moving backward. Verizon’s quarterly earnings fell 22% from a year ago, a reminder that Frontier deal costs and promotional spending still weigh on GAAP results even as adjusted EPS of $1.30 beat estimates.

Realty Income: Monthly Checks Backed by Rising AFFO

Dividend safety: Realty Income is a real estate investment trust, so earnings per share understate its cash generation because of heavy depreciation charges. The right metric is AFFO, a REIT’s measure of recurring cash available for distribution. Management raised 2026 AFFO guidance to $4.44-$4.45 per share, compared with an annualized forward dividend of $3.258. That shock lets the company keep raising payouts while still funding growth.

The stock yields 5.84%, and Realty Income pays monthly. Its latest declared payment is $0.2715 per share, with an ex-dividend date of October 30 and payment on November 13. To collect that November check, you must own the shares before the ex-dividend date. Anyone buying on October 30 or later collects the following monthly payment instead. (If a 30-day paycheck appeals, we rounded up six more names that pay on the same schedule in a free report on monthly dividend stocks.)

Realty Income has declared 673 consecutive monthly dividends and belongs to the S&P 500 Dividend Aristocrats index with over 31 consecutive years of increases. Occupancy is at 98.8%, credit ratings are A3/A-/A from Moody’s, S&P and Fitch, and pro forma liquidity tops $5.7 billion.

Bull case: Realty Income is diversifying away from pure retail. Industrial made up about 65% of global real estate investments in the second quarter, deals closed at a 7.3% initial cash yield, and full-year investment guidance rose to $10 billion. A $6 billion hyperscale data center joint venture adds AI-era exposure. CEO Sumit Roy called it “a once-in-a-generation demand for a particular asset type with attractive clients and locations.”

Risk: Interest rates set the ceiling. Management said that if the 10-year Treasury stays in the 4.6% to potentially 5% range, acquisition cap rates will have to adjust, which contracts the spread Realty Income earns on new deals. That pressure shows in the stock, which is down 0.34% over the past year at $56.89.

Altria: A Fresh Dividend Hike Covered by Tobacco’s Pricing Power

Dividend safety: Altria earned $4.89 per diluted share over the trailing twelve months, against an annual dividend of $4.24. Full-year adjusted EPS guidance of $5.61 to $5.72 adds more buffer. In August, the board raised the quarterly payout to $1.11 from $1.06, for an annualized forward rate of $4.44. Altria’s dividend record shows a raise every year from 2017 through 2026. The stock yields 5.74%.

Cash flow carries the load. Altria paid about $3.6 billion in dividends in the first half, and CFO Heather Newman said, “Historically, after we have the dividend, we have about $1 billion excess in cash.” Its finances are unusual: shareholders’ equity was negative at -$2.6B in the second quarter, a product of years of aggressive capital returns. Management says it is “really well positioned to manage those debt maturities in ’26 and ’27.”

Bull case: Pricing power keeps profits rising even as volumes shrink. Smokeable price realization reached 4.5%, Marlboro’s retail price rose about 7%, and smokeable adjusted margins expanded to 64.8%. On the smoke-free side, on! expanded to 120,000 stores and its retail share climbed to 8.6% behind on! PLUS. Investors have noticed: shares are up 35.13% year to date at $74.33.

Risk: Earnings momentum is fading. Quarterly earnings slipped 2.7% from a year ago, and second-quarter adjusted EPS of $1.48 came in below the $1.50 estimate, missing expectations. With adjusted cigarette industry volumes down an estimated 5%, price hikes have to keep doing the heavy lifting.

PepsiCo: A Dividend Growth Machine Trading Below Its 200-Day Average

Dividend safety: PepsiCo earned $7.95 per diluted share over the trailing twelve months, against an annual dividend of $5.80. The company plans to return $8.9B to shareholders this year, including $7.9B in dividends, while targeting free cash flow conversion of at least 80%. Interest coverage of 10.26x and net debt to EBITDA of 2.60x leave plenty of room. Its dividend record shows a raise every year since 1999, most recently to a quarterly $1.48 from $1.4225. The stock yields 4.31%.

Bull case: International is now a real growth engine. Third-quarter adjusted EPS of $2.34 beat the $2.30 estimate, revenue rose 5.6% to $25.27B, and international organic revenue grew 8%. International accounted for 45% of profit year to date, and CEO Ramon Laguarta called that momentum “much more structural.” North American snacks shifted to low-single-digit positive volume growth, and structural cost cuts should start helping “as we turn the calendar year.”

Risk, and the opportunity: Shares trade at $135.77, below the 200-day moving average of $146.18 though just above the 50-day at $134.21. The stock is down 6.76% over the past year because PepsiCo lowered core EPS growth guidance to 2.5%-3.5% on rising input costs. CFO Steve Schmitt was blunt: “It’s the margin piece that’s driving the guide down in EPS.” That gap shows how far sentiment has fallen below the longer-term trend. At roughly 22 times earnings, the stock prices in a dividend raiser with annual increases since 1999 while margin worries keep the price down.

A Core Income Basket Built on Coverage

Together, these four give income investors telecom cash flow, monthly real estate rent, tobacco pricing power and global snack and beverage demand, with yields running from 4.31% to 6.18%. Each pays out less than it earns, or in Realty Income’s case less than its AFFO, and each has years of dividend increases behind it. That combination of coverage and track record supports each yield heading into November.

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