One company that still offers a high yield is Altria Group (NYSE:MO). With a quarterly payout of $0.86 per share, investors who buy the stock today are earning a yield of 6.7%. That’s well above the S&P 500 average, which is around just 1.5% right now.
In 2020, the company generated per-share earnings of just $2.40. That is well below what its annual per-share dividend would come out to be: $3.44. At over 140%, its payout ratio raises alarm bells. However, net income includes non-cash items and it sometimes doesn’t present the best picture of whether a company can afford to continue making dividend payments. That’s why it’s also important to factor in a company’s free cash flow.
In the past year, shares of Altria have risen more than 40%. That, combined with its high yield (which still looks safe) makes this stock an attractive buy for income investors.