Major indexes are near all-time highs, but with the market approaching the 11th year of a bull run and some macroeconomic factors raising the specter of recession, it makes sense to allocate some of your investment dollars to more conservatively valued companies that pay great dividends. Income-generating stocks can bolster your portfolio through thick and thin, and narrowing in on businesses with compelling strengths that have been sidelined during the incredible bull run is one of the best ways to find value in this market.

Finding great income plays has become more difficult as stocks have climbed and people have flocked to dividend stocks due to low interest rates and bond yields. But those possibilities are still out their. Investors hunting for top dividend stocks should add Altria (NYSE:MO), AT&T (NYSE:T), and ExxonMobil (NYSE:XOM), three storied companies operating in three distinct industries that pay dividends yielding north of 5% and offer underappreciated performance potential.

A bag with dollar sign on it surrounded by gold coins.

Image source: Getty Images.

AT&T: The best income play in telecom

Of the three companies in this article, AT&T is the only one that's posted stock gains in 2019, with shares up roughly 32% year to date. Despite that impressive run, the telecom giant is still lagging far behind the market on a longer time line. It has posted a loss of roughly 4% over the last three years and gained just 7% over the last five years, while the S&P 500 index has risen roughly 42% and 52% over the same periods, respectively.

Challenges to AT&T's core mobile wireless and satellite television businesses mean that some of the soggy performance has been justified. But the stock has underappreciated growth potential on the verge of expansion for its 5G, Internet of Things, and entertainment services. Connectivity and high-quality content are categories that look primed to drive increasing value, and AT&T's strengths in these areas point to the business being a resilient play with underappreciated upside for long-term investors.

For those seeking a big yield, the stock boasts a dividend profile that's tough to beat. Shares have a dividend yield of 5.5% despite their impressive rally this year, and the company has raised its payout on an annual basis for 35 consecutive years. AT&T should be able to keep building on that impressive streak, since the business is generating enough free cash flow to allow it to cover its payout roughly twice over. The company already boasts a great yield and is in position to deliver more slow payout growth while simultaneously cutting away at its debt. 

ExxonMobil: Investments in growth should pay off

Exxon's strategy has been to pursue big growth initiatives at a time when oil prices have been pressured due to a supply glut, with the expectation that it can complete these projects at lower costs and pave the way for bigger payoffs down the line. The market hasn't responded favorably to this approach, but it could prove hugely rewarding for patient investors.

The stock has lost roughly 27% of its value over the last five years, but there's a good chance that the energy company can pull off a comeback. Management projects that its initiatives in the Permian Basin and offshore of Guyana will help grow earnings roughly 140% from 2017 to 2025. Hitting that target would likely translate into impressive returns for shareholders, particularly when the company's generous dividend is taken into account.

Exxon shares yield roughly 5.1% at current prices, and the company has raised its dividend on an annual basis for 37 years. The dividend payout exceeds its earnings and free cash flow over the trailing-12-month period, but that doesn't look particularly worrying given a strong balance sheet and likely payoffs from its big spending initiatives. Divesting from some underperforming businesses should increase its ability to shore up the dividend program and concentrate on more promising growth plans as well.

The energy stalwart is enduring near-term costs related to its growth initiatives, and that's pushed its forward price-to-earnings multiple to roughly 26. But it will emerge from the big spending push, and shares look much cheaper on a rolling basis that still includes significant growth investment -- with the stock trading at roughly 20 times earnings over the trailing-12-month period.

While factors like a potential recession or significant advancement for green energy technologies could pressure the business, the long-term outlook for oil and natural gas demand remains pretty strong. Expansion for the global middle class is on track to be one of the defining shifts of the 21st century, and the chances of that taking place without significantly increased fossil fuel consumption are very low. Dividend investors can bank a large, dependable yield with Exxon, and the stock looks undervalued at these levels.

Altria: This big tobacco company offers big dividends

Cigarette stocks aren't for everyone. The addictive and harmful nature of tobacco products means that some investors prefer to avoid the space altogether. And while tobacco companies have historically offered dependable profits and market-beating stock performance over long stretches, declining cigarette sales in recent years have narrowed the appeal of stocks like Altria even further. Shares have lost roughly 23% of their value over the last three years, but the flip side of the poor performance is that the stock now yields roughly 6.8%, and shares trade at less than 12 times this year's expected earnings. 

An explosion of vaping-related lung injuries and deaths has caused some shareholders to lament Altria's $12.8 billion investment to acquire a 35% stake in Juul. There's no question that the timing of the deal was inopportune. Potential bans or stricter regulations on vape products could block growth opportunities in one of Altria's key diversification efforts, and the $4.5 billion writedown the company initiated on its Juul stake shows that its outlook on the investment has changed. The flip side is that recent vaping-related deaths and illnesses don't appear to be linked to Juul products, and a tighter vaping market could actually work to slow declines for cigarette sales if new regulations are implemented.

Investors should approach Altria stock with a thorough understanding of the challenges facing the business, but the company has plenty of strengths as well. It has shown a commitment to returning cash to shareholders and dividend growth, increasing its payout annually for 50 consecutive years. And despite the pressures that are dominating discussion on the stock, Altria has a recession-proof business.

Unit volumes for cigarettes may continue to drop, but the company still has brand strength and pricing power in the tobacco space. It's also diversified in areas that should help it weather pressures in its main product category. The company owns a 45% stake in Canadian marijuana leader Cronos Group and a 10.9% stake in Anheuser-Busch InBev, and has exposure to the wine business through its Ste. Michelle subsidiary. Altria stock is down but hardly out, and shares offer attractive value and a great dividend at current prices. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.