US Stock Market Dividend Cut Fears...Realty, Altria, PepsiCo Selected as Stable High-Dividend Stocks

▲ Realty Income (O), Altria Group (MO), PepsiCo (PEP), high-dividend stocks/AI-generated image

In the U.S. stock market, where concerns about dividend cuts have grown, Realty Income (O), Altria Group (MO), and PepsiCo (PEP) have been identified as three high-dividend stocks prioritizing dividend stability. Motley Fool emphasized that rather than simply chasing high dividend yields, investors should also consider a business structure that can withstand an economic downturn, a sound financial status, and potential for earnings growth.

According to Motley Fool on July 9 (local time), Realty Income is a real estate investment trust (REIT) with a dividend yield of approximately 5% and a monthly dividend structure. It primarily holds single-tenant properties that are relatively resilient to economic downturns, such as grocery stores and convenience stores, and utilizes net lease agreements where tenants are responsible for property taxes, insurance, and maintenance costs. Realty Income has increased its dividend at least once every year for over 30 years, and its dividend payout ratio against estimated funds from operations (FFO) for 2026 is approximately 73%.

Altria Group has maintained a dividend yield of approximately 5.8% despite the long-term decline in U.S. smoking rates. Its tobacco business, led by Marlboro, has partially offset declining sales volumes with price increases, and uses 81% of its cash flow for dividend payments. Motley Fool pointed out that the tobacco business does not require large-scale investments and that Altria also holds billions of dollars in shares of Anheuser-Busch InBev (BUD). Analysts project Altria's average annual earnings growth rate to be 4% to 5% over the next three to five years.

PepsiCo is a "Dividend King" stock that has increased its dividend every year for over 50 years, offering a dividend yield of approximately 4%. It owns food and beverage brands including Pepsi, Frito-Lay, Quaker Foods, as well as Doritos, Lay's, and Gatorade. Motley Fool cited PepsiCo's business structure, based on consumers' fundamental demand for food and beverages, as a factor protecting its performance.

PepsiCo's dividend payout ratio against cash flow over the past year is 87%, higher than Realty Income and Altria. However, PepsiCo holds $10.8 billion in cash and has an A+ credit rating with a stable outlook. Analysts expect an average annual earnings growth of 5% to 6% over the next three to five years. Motley Fool assessed that while PepsiCo might reduce the pace of dividend increases for a while, a dividend cut is highly unlikely given its robust financial condition.

Motley Fool emphasized that when choosing stable dividend stocks, simply checking past dividend records is insufficient. It stressed the importance of considering a business structure that can withstand an economic downturn, a sound financial status, and a growth trend that can increase dividends alongside earnings, highlighting the dividend yields of approximately 5% for Realty Income, 5.8% for Altria, and 4% for PepsiCo.

[Key Article Summary]

-Motley Fool suggested Realty Income, Altria Group, and PepsiCo as stocks with low concerns about dividend cuts.

-Realty Income offers approximately a 5% dividend yield, Altria approximately 5.8%, and PepsiCo approximately 4%.

-These three companies were evaluated based on their recession-resistant business structures, cash flow, financial status, or earnings growth prospects as reasons for sustained dividends.

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