This Top Dividend Stock Is on Sale and Now Yields 7.5%

The markets have been in selloff mode and if you are an income investor there is one stock you may want to consider adding to your portfolio today – Altria Group (NYSE:MO). The tobacco company has seen its value fall more than 8% over the past month while the S&P 500 has been up by less than 1%.

Altria continues to pay a quarterly dividend of $0.86 and with the stock trading at around $46 per share, that equates to an annual yield of 7.5%. On a $25,000 investment, you could be earning close to $1,900 every year just in dividend income.

Although the company is coming off a tough first quarter where its net revenue of $6 billion was down 5.1% year over year, it still reported an adjusted earnings per share (EPS) of $1.07. Altria projects that this year, its adjusted diluted EPS will be within a range of $4.49 to $4.62. Even at the lower end of that forecast, that would represent a payout ratio of 76.6%.

The company's target is a payout ratio of 80% of adjusted diluted EPS. And so even though the yield may appear high, Altria doesn't look to be in trouble and its dividend should be safe for the foreseeable future.

In 2021, shares of Altria are still up more than 12% even with the drop last week.

While the tobacco company may have an uncertain future ahead, especially with how its investment in JUUL plays out, for the near term, it could be a good source of recurring revenue for income investors.