N※N

Altria Group (MO): 8% Yield, Cash-Rich Balance Sheet, Low P/E

  //stocks-investing.news-articles.net/content/202 .. -mo-8-yield-cash-rich-balance-sheet-low-p-e.html
  Published in Stocks and Investing on Saturday, December 6th 2025 at 8:47 GMT by Seeking Alpha

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-12-06 249 x 203 / 3555 Bytes

2025-12-06 221 x 224 / 4680 Bytes

2025-12-06 236 x 213 / 8909 Bytes

2025-12-06 183 x 224 / 14984 Bytes

Five Relatively Secure and Cheap Dividend Stocks – Yields Up to 8 % by December 2025

Seeking Alpha’s recent article, “5 Relatively Secure and Cheap Dividend Stocks, Yields Up To 8 % December 2025,” presents a concise, data‑driven case for a small set of well‑established companies that are expected to provide attractive income without sacrificing too much upside potential. The author combines fundamentals, valuation, and dividend‑history metrics to argue that these names are both “secure” (low likelihood of dividend cuts or bankruptcies) and “cheap” (valued below their intrinsic worth). Below is a distillation of the key take‑aways, broken down stock‑by‑stock and by the underlying themes that drive the article’s thesis.

1. Altria Group Inc. (MO)

Why Altria?
The article highlights Altria’s entrenched market position in the U.S. tobacco industry, citing its “cash‑rich” balance sheet and robust free‑cash‑flow generation as bulwarks against economic downturns. The 8 % yield is supported by a generous payout ratio and a history of dividend hikes—Altria has increased its dividend for 12 straight years. The author also notes the company’s commitment to a “buy‑back” program, which has helped keep the share price low relative to its earnings, supporting a fair‑value assessment.

Risks Discussed
- Regulatory scrutiny and litigation costs.
- Shifting consumer preferences toward e‑cigarettes and nicotine alternatives.
- Potential for a sharp drop in sales if cigarette taxes rise.

Despite these risks, the author maintains that Altria’s pricing cushion—P/E well below the sector median—keeps it a “cheap” play.

2. AT&T Inc. (T)

Why AT&T?
AT&T is framed as a “secure” dividend stock because it owns a broad spectrum of assets: cable TV, wireless (T‑Mobile), and media (Warner Bros. Discovery). Its current high yield is justified by the company’s massive cash‑on‑hand buffer that offsets its large net debt. The article stresses AT&T’s “resilient cash‑flow” that comfortably covers its dividend obligations, and it references analyst reports that project a gradual divestiture of legacy assets, which should improve valuation over the next 12‑18 months.

Risks Discussed
- Potential for future dividend cuts if AT&T completes its media integration or faces new regulatory scrutiny.
- Cybersecurity threats to its telecom infrastructure.
- Competitive pressure in the 5G race.

However, the author argues that AT&T’s “cash‑rich” profile mitigates these concerns and that the share price is currently undervalued, giving a buying opportunity.

3. Verizon Communications Inc. (VZ)

Why Verizon?
The article points to Verizon’s “high‑quality” subscriber base and its dominant position in the U.S. wireless market. The company’s strong free‑cash‑flow generation allows it to maintain a high payout ratio while still investing in 5G. The valuation metrics—P/E under the industry average, modest debt-to-equity—are highlighted as evidence that the share price is “cheap.” The author also cites Verizon’s “dividend track record” of never having cut a dividend in its 50‑year history.

Risks Discussed
- Rising operating costs from 5G expansion.
- Competitive pressures from new entrants (e.g., T‑Mobile, Sprint).
- Regulatory scrutiny over net‑neutrality.

These risks are deemed manageable given Verizon’s cash position and market dominance.

4. Philip Morris International Inc. (PM)

Why Philip Morris?
The article frames Philip Morris as a “secure” dividend stock because of its extensive global footprint, particularly in emerging markets where tobacco consumption is still rising. The company’s high yield is supported by a healthy payout ratio and robust free‑cash‑flow. A key point is the company’s “transition strategy” toward smokeless and nicotine‑delivery products, which is expected to diversify its revenue streams over the next decade. The author cites research indicating that PM’s valuation is under pressure due to rising regulatory costs, which offers a discount to long‑term investors.

Risks Discussed
- International regulatory changes (tax hikes, advertising restrictions).
- Public health campaigns reducing consumption.
- Competition from e‑cigarette companies.

Nonetheless, the article suggests that Philip Morris’s global scale and cash cushion reduce the probability of a dividend cut.

5. Duke Energy Corp. (DUK)

Why Duke Energy?
Duke Energy is presented as a “cheapest” dividend stock within the utilities sector. Its conservative valuation (P/E below sector average) and high dividend yield make it an attractive buy. The article stresses the company’s “predictable” cash flow due to regulated rate‑setting and its sizable portfolio of transmission lines and power plants. Duke’s recent commitment to renewable energy is noted as a way to future‑proof the business while maintaining dividend stability.

Risks Discussed
- Rate‑regulation constraints could limit earnings growth.
- Climate‑related regulatory changes may increase operating costs.
- Potential dividend cuts if capital requirements rise.

Despite these, the author considers Duke Energy’s conservative payout ratio and strong balance sheet a hedge against dividend risk.

Cross‑Cutting Themes

Security

All five stocks share a “cash‑rich” balance sheet, low debt‑to‑equity ratios (except AT&T, whose cash offset net debt), and a history of consistent or increasing dividends. The article places particular emphasis on each company’s dividend track record and cash‑flow sustainability, noting that a payout ratio above 80 % is common among the selected names but is justified by robust free‑cash‑flow.

Cheapness

The article argues that each stock is undervalued relative to either its own historical valuation range or the broader sector. P/E ratios are consistently below sector averages (except for Altria, which is modestly above due to its higher growth potential). The author cites analyst consensus estimates that place a valuation upside of 10‑15 % in the next 12–18 months, especially for the telecom and utilities names.

Yield Projection to December 2025

A central claim is that the current yields—ranging from 6.5 % to 8.3 %—will persist through 2025. The article references each company’s recent earnings statements, which all confirm a commitment to maintaining or modestly increasing dividends. For instance, AT&T’s 2023 earnings call indicated an intention to sustain the dividend even as it continues to unwind its media assets. The author also notes macro‑economic factors (steady interest‑rate environment, expected growth in consumer staples) that support the maintenance of dividend payouts.

Risk Mitigation

The piece recommends a diversified “income basket” strategy: invest in a mix of consumer staples (Altria, Philip Morris), telecoms (AT&T, Verizon), and utilities (Duke Energy). This spread reduces sector‑specific downturn risk and provides a hedge against sector‑wide dividend cuts. It also emphasizes the importance of monitoring dividend payout ratios and free‑cash‑flow trends, especially for AT&T, which has the highest debt load.

Bottom Line

The article positions the five stocks as a “portfolio of choice” for investors seeking high, sustainable dividend income with a margin of safety. Each company offers:

1. Strong cash‑flow that supports current dividend payouts.
2. Valuation discounts relative to peers or historical averages.
3. Track records of dividend consistency that reduce the risk of sudden cuts.

While acknowledging that no dividend strategy is risk‑free, the author concludes that the blend of security and cheapness makes these names a compelling addition to a long‑term income strategy targeting yields of up to 8 % through December 2025.

Take‑away: If you’re building an income‑focused portfolio that aims for a 6‑8 % yield without taking on excessive risk, the article’s five‑stock list offers a diversified, undervalued, and cash‑rich set of options. Each ticker is supported by robust fundamentals, a stable dividend history, and a price advantage that could translate into modest capital appreciation alongside the income stream.