High-Yield Dividend Stocks: Buy, Hold, or Sell?
For income-focused investors, high-yield dividend stocks offer an attractive way to generate passive income while maintaining exposure to the stock market. However, not all dividend stocks are created equal—some are reliable income generators, while others may be value traps in disguise. Today, we examine five NYSE-listed companies—Altria Group, LyondellBasell Industries, Verizon Communications, Dow Inc., and Chevron—and determine whether they are a Buy, Hold, or Sell based on their dividend sustainability and long-term prospects.
1. Altria Group Inc. (MO) – Buy
Altria has long been a dividend darling, consistently rewarding investors with strong yields. With a dividend yield hovering around 8% and a history of steady increases, it remains an income investor’s favorite. While the tobacco industry is in long-term decline, Altria’s pricing power, cost-cutting measures, and investment in alternative products (such as heated tobacco and cannabis) keep the cash flow stable.
Verdict: Buy for income, but expect limited long-term growth.
2. LyondellBasell Industries N.V. (LYB) – Hold
LyondellBasell, a global leader in chemicals and refining, offers a solid dividend yield of around 7%. While the company benefits from strong industrial demand, its fortunes are tied to commodity prices, making it vulnerable to economic downturns. The balance sheet remains healthy, but cyclicality is a concern.
Verdict: Hold for income, but be mindful of economic swings.
3. Verizon Communications Inc. (VZ) – Buy
Verizon’s 6.8% dividend yield makes it one of the highest-yielding blue-chip stocks. The company has a strong wireless business with predictable revenue streams. While its capital expenditures on 5G infrastructure have been high, the long-term payoff should be substantial. Debt remains an issue, but Verizon’s cash flow should cover its dividend for the foreseeable future.
Verdict: Buy for stability and income.
4. Dow Inc. (DOW) – Hold
Dow’s 7.2% dividend yield is appealing, but its earnings are tied to chemical and materials demand, making it a cyclical investment. While the company has solid cost management and cash flow, a potential economic slowdown could pressure margins. However, if you already own Dow, holding on for the dividend seems reasonable.
Verdict: Hold unless economic conditions improve significantly.
5. Chevron Corporation (CVX) – Buy
Chevron remains a powerhouse in the energy sector, offering a strong dividend yield above 4%. The company benefits from oil price cycles but has diversified into renewables and low-carbon initiatives. While energy prices can fluctuate, Chevron’s financial strength and cost discipline make it a reliable dividend payer.
Verdict: Buy for long-term energy exposure and dividend stability.
Final Thoughts
High-yield dividend stocks can be excellent income generators, but they come with varying degrees of risk. Altria and Verizon stand out as strong buys due to their steady cash flows and resilient business models. LyondellBasell and Dow offer attractive dividends but require caution due to economic cyclicality. Chevron remains a solid pick for those looking to balance income with exposure to the energy sector.
Bill White Says…
“Investing in high-yield dividend stocks is like keeping a goose that lays golden eggs. Just make sure it’s not a goose on life support.”