- In today’s volatile market, investors are increasingly looking for stocks that offer both reliable income and growth potential.
- Using the InvestingPro Stock Screener, I was able to identify numerous high-quality dividend-paying stocks with notable upside ahead.
- For investors seeking quality dividend plays that can withstand economic uncertainty while delivering substantial returns, these stocks offer a compelling opportunity.
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In times of market uncertainty, income-generating stocks offer investors a defensive play with the added benefit of long-term capital appreciation.
Three such stocks—Altria Group (NYSE:MO), Enterprise Products Partners (NYSE:EPD), and United Bankshares (NASDAQ:UBSI)—are currently trading at attractive valuations while delivering solid dividend yields and growth.
Source: InvestingPro
These companies, leaders in their respective sectors, have built strong fundamentals that enable them to weather volatile markets and continue returning value to shareholders.
1. Altria Group
- Dividend Yield: 7.65%
- Market Cap: $90.4 Billion
Altria, the U.S. tobacco giant behind Marlboro and Black & Mild, stands out as a dividend champion with an impressive 7.65% yield, making it one of the highest-yielding stocks in the S&P 500.
Source: InvestingPro
As a global leader in the tobacco industry, Altria offers a diverse portfolio of popular cigarette brands, along with ventures into smokeless products, cannabis and wine. The company has a long history of increasing dividends, reflecting its reliable cash flow and disciplined capital management.
Currently paying $4.08 per share annually, Altria maintains a ‘GREAT’ InvestingPro Financial Health Score of 3.10, supported by robust fundamentals including $12.35 billion in EBITDA and an impressive 60.4% EBITDA margin.
Even as regulatory pressures and evolving consumer trends pose challenges, Altria’s solid financial performance and commitment to returning value to shareholders make it an attractive defensive play.
Source: InvestingPro
With a Fair Value upside of 8.3% and trading at a modest P/E ratio of 8.3x, Altria continues to generate substantial shareholder value, making it an enticing option for income investors.
MO stock closed at $54.33 on Thursday, earning the tobacco company a valuation of $90.4 billion. Shares are up by 43.9% over the last 12 months.
2. Enterprise Products Partners
- Dividend Yield: 6.36%
- Market Cap: $72.9 Billion
Enterprise Products Partners, which specializes in the gathering, processing, and transportation of oil and natural gas, offers investors a compelling 6.36% dividend yield backed by strong midstream energy operations.
Source: InvestingPro
As one of America’s largest natural gas and crude oil pipeline operators, EPD benefits from long-term contracts that generate consistent, recurring cash flows. As global energy markets evolve, particularly with the growing emphasis on natural gas as a cleaner alternative, Enterprise is well positioned to capitalize on increased energy demand.
The company has shown consistent dividend growth, raising its annual payout for 27 consecutive years, and currently distributes $2.14 per share annually. It also maintains a ‘GOOD’ Financial Health Score of 2.81.
Enterprise’s diversified asset base, combined with a proven track record of increasing distributions, makes it a compelling option for investors looking for both yield and stability in the energy sector.
Source: Investing.com
Analysts are optimistic, with a mean price target of $36.45 suggesting an 8.5% upside potential.
EPD shares ended Thursday’s session at $33.58, valuing the Houston, Texas-based midstream pipeline company at $72.9 billion. Shares are up 31.5% during the past 12 months.
3. United Bankshares
- Dividend Yield: 3.92%
- Market Cap: $5.1 Billion
United Bankshares, a community-focused bank operating in the Mid-Atlantic and Southeastern U.S., rounds out the trio with a 3.92% dividend yield and a ‘GOOD’ Financial Health Score of 2.52.
Source: InvestingPro
This regional bank – which has increased its dividend for 36 years running - holds a solid position in the U.S. financial services sector, offering retail and commercial banking as well as wealth management and mortgage lending.
Despite operating in a competitive environment, United Bank continues to maintain steady distributions at $1.48 per share annually, supported by its reliable recurring revenue and prudent risk management practices.
The bank shows promising growth potential, with revenue expected to rise by 15.4% in FY2025, and its stock appears significantly undervalued, boasting a substantial 33.3% Fair Value upside while trading at a reasonable P/E ratio of 13.4x.
Source: InvestingPro
UBSI stock currently trades at $36.77. The West Virginia-based lender has a market cap of $5.1 billion at its present valuation. Shares have gained 13.1% in the last 12 months.
Conclusion
Altria Group, Enterprise Products Partners, and United Bankshares offer a compelling mix of high dividend yields, consistent dividend growth, and strong financial health. These companies not only deliver attractive income streams but also provide resilience amid market volatility.
For investors seeking stability and steady returns in uncertain economic conditions, these three stocks present robust, diversified opportunities to boost your portfolio.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.