Most cannabis stocks are high-risk bets. Operating in an exciting but unproven industry, few marijuana companies are profitable yet, and fewer are in a financial position that allows them to regularly pay out cold hard cash to their shareholders.

Yet there is a select group of highly profitable businesses that can give investors opportunities to capitalize on the cannabis industry's growth potential while being paid large dividends along the way.

If that sounds appealing, you'll want to take a serious look at the best high-yield cannabis stock available in the market today.

Dice spelling the word yield on top of rising stacks of gold coins

Image source: Getty Images.

With a dividend that yields 6.5%, Altria (NYSE:MO) offers investors an unusually high payout, not just among marijuana stocks, but among all stocks. And fans of dividend growth will also appreciate that the tobacco giant has increased its cash payout 54 times over the last 50 years. 

Tobacco-driven profits

Altria is able to pay such a bountiful dividend thanks to its highly profitable smokeable and smokeless tobacco operations. Through the first nine months of 2019, it generated more than $19 billion in revenue and nearly $6 billion in adjusted earnings. With an asset-light business model and minimal reinvestment needs, the company can pass nearly all of its profits on to shareholders via dividends and stock buybacks.

However, Altria's traditional cigarette sales volumes are in a perpetual state of decline as the U.S. smoking rate continues to fall. A combination of price increases and cost reductions has helped it prop up its profits, but there's a limit to how far it can go with these measures. The tobacco titan knows this, so it's aggressively entering new markets in search of expansion possibilities.

A massive opportunity in marijuana

In its ongoing search for growth, Altria has set its sights on a cannabis market that some analysts think could reach $200 billion in annual sales by the end of the next decade.

In December 2018, Altria purchased a 45% stake in Canadian cannabis producer Cronos Group (NASDAQ:CRON) for $1.8 billion. Like many marijuana companies, Cronos Group's stock fell sharply in 2019. But Altria is wisely taking the long view. Indeed, the pullback could work in Altria's favor if it decides to acquire the cannabis company outright at its now significantly reduced price. And should it choose to, Altria could use its massive profits to rapidly consolidate the marijuana industry. It may be able to scoop up the assets of some of Cronos' competitors on the cheap if a wave of bankruptcies hits the industry in the coming years, which some predict will happen. 

A bargain price

Better still, Altria's shares can currently be had for only about 11.5 times analysts' earnings estimates for 2020. That forward P/E ratio is about 40% lower than the S&P 500, which is currently trading at more than 19 times forward earnings estimates. It's also a great price for a stock with a high yielding payout that's likely to grow by 5% or more annually for at least the next half-decade. 

Part of the reason why Altria's shares are currently trading at a discount is that concerns regarding the safety of vaping products have weighed on its stock. In addition to its investment in Cronos, Altria made a $12.8 billion investment in JUUL Labs in 2018. The deal gave Altria a 35% equity stake in a company with an estimated 75% share of the rapidly growing e-cigarette market, but a recent outbreak of vaping-related illnesses and deaths cast doubt on the industry's growth potential. These concerns, however, are now largely reflected in Altria's share price, and investors who buy the stock today are taking less risk by purchasing shares at a lower valuation.

All told, Altria's value-priced shares offer investors a low-risk way to profit from the cannabis boom, while collecting hefty tobacco-fueled dividends along the way.

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.