3 High-Yield Dividend Stocks I'd Buy in September With No Hesitation

Altria, Verizon and Realty Income each offer dividend yields above 5%, with Altria highest at 6.4%, Verizon at 5.4%, and Realty Income at 5.6%. Altria raised its dividend 4.7% to $4.44 per share, though its cigarette-volume declines create the greatest long-term business risk. Verizon's first-half operating cash flow rose 9.9% and free cash flow increased 16%, supporting roughly $11.5B of dividends against about $20B in FCF despite $129B of net unsecured debt. Realty Income's nearly 99% occupancy, 75% AFFO payout ratio and $2.6B of quarterly investments at a 7.3% cash yield underpin its monthly dividend, though higher financing costs remain a risk.

Analysis

The relevant differentiation is not headline yield but the source of distributable cash flow and the market variable each equity is implicitly short. MO is a shrinking-volume consumer staple whose valuation depends on price/mix exceeding volume erosion; that equation becomes materially less credible if discounting rises or reduced-risk products fail to offset combustibles. VZ is principally a deleveraging and capital-intensity story: incremental FCF should accrue to equity only after spectrum, network investment, and refinancing needs, making credit-spread direction more important than a modest dividend-growth narrative.

O has the cleanest operating-duration profile but the greatest valuation sensitivity to real rates and external funding costs. Its acquisition spread is economically attractive only if cap rates remain above its blended cost of capital; an equity-market rally in O without a corresponding improvement in financing conditions would be vulnerable to multiple compression. Over the next 1-3 months, the key relative-value driver is the long-end Treasury yield and IG credit spreads; over 6-18 months, MO faces regulatory/volume risk, VZ faces leverage reduction and competitive intensity, and O faces whether accretive external growth can restart.

Consensus income screens may over-reward MO's current cash distribution and underprice terminal-value risk, while treating VZ as a bond proxy despite the possibility that lower rates primarily benefit its debt-service trajectory. The more contrarian expression is O: if real yields decline and credit remains open, its multiple can re-rate before reported AFFO growth visibly accelerates. This is routine, low-information commentary rather than an independent fundamental catalyst, so position sizing should await rate and credit confirmation.

Key Decisions for Investors

• Maintain/establish a 3-6 month long O / short MO pair, sized beta-neutral: O offers upside from falling real yields and renewed acquisition accretion, while MO is exposed to adverse volume, regulation, and discounting. Target a 10-15% relative return; exit if the 10-year Treasury rises more than 50 bp from entry or MO demonstrates sustained price/mix growth that exceeds volume declines.
• Keep VZ as a modest income/defensive holding rather than a high-conviction long until leverage and refinancing visibility improve. Add only following a material tightening in telecom credit spreads or an earnings update showing FCF after capex and dividends is tracking above plan; downside risk is a competitive pricing response or renewed capex escalation, which would pressure both FCF and the equity multiple.
• Avoid adding to MO solely for yield over the next quarter. Reassess after volume trends, nicotine-regulation developments, and smoke-free category profitability are disclosed; a meaningful deterioration in price/mix or a guidance cut would make MO a short candidate versus XLP rather than a dividend long.
• Set a macro alert on the 10-year Treasury and BBB/IG spreads for O: a 25-50 bp decline in long yields with stable/tighter spreads supports initiating exposure, while higher yields without cap-rate expansion would falsify the acquisition-spread thesis.