For all the focus the investor class seems to put on buying growth stocks, many investors would be just as happy to focus on stocks that don't require selling in order to collect cash returns. It really all depends on the level of return.

In some cases, growth investors will even turn to dividend stocks and give much less regard to the stock's price growth potential. That is, of course, if the dividend yield warrants it. For this type of investor, the search focuses on stocks that claim higher dividend yields than the S&P 500 average of 1.5%, and it can even unveil a few stocks offering dividend returns in excess of 8%.

Investment professionals will often discourage investors from buying into such companies because the risks oftentimes outweigh the potential rewards. While it's true that even the best of these stocks carry significant risks, there are a select few like Altria (MO -0.37%) and Innovative Industrial Properties (IIPR -0.17%) that have enough going for them to warrant a closer look as possible investments. Let's take a closer look at these two ultra-high-yield dividend stocks.

1. Altria

The success of tobacco giant Altria may be one of the more counterintuitive stories of the stock market. The Surgeon General highlighted tobacco's dangers in a landmark study in 1964, and the trouble for Altria worsened as tobacco's addictive qualities became more apparent. These issues culminated in a 1998 master settlement agreement that cost the industry $206 billion over 25 years.

Yet during that time, both the stock and the dividend trajectory continued to trend higher. In August, Altria hiked its annual dividend by 4%, taking its current annual dividend to $3.92 per share. Given the current stock price, that puts the cash yield on this dividend at 8.8%!

Altria has raised the payout yearly since 2010 and has a history of dividend increases going back decades. But investors should also remember that tobacco use continues to decline, and the consequences may have caught up to the company. Altria spent $3.4 billion in dividends in the first half of the year, slightly more than the $3 billion in free cash flow generated during that time. It also agreed to pay $462 million to 10 states to settle lawsuits over its electronic cigarette, Juul.

Nonetheless, this stock has beaten the odds for nearly 60 years. If Altria can reverse its income declines, the dividend will have even more solid reasons to continue its long-term uptrend.

2. Innovative Industrial Properties 

Innovative Industrial Properties is the largest real estate investment trust (REIT) dedicated to investing in properties for cannabis production. Although Innovative Industrial develops properties for growing cannabis, it has also leveraged federal marijuana prohibition to its advantage. Since laws made it difficult for cannabis companies to obtain bank loans, Innovative Industrial funds companies through its sale-leaseback program. It would buy a company's property and lease it back to the former owner, giving Innovative Industrial a tenant and a source of revenue.

Innovative Industrial prospered in past years as demand for cannabis rose quickly. However, its stock price plunged as the marijuana industry experienced a sharp downturn caused by over-saturation of the market, and some tenants missed rent payments. Indeed, the rash of non-paying tenants spooked investors and sent its stock price plunging amid that rising risk.

Fortunately for Innovative Industrial, it has been adept at finding new tenants or unloading unprofitable properties. This ability to survive more challenging times should have investors looking at its $7.20 per year per share annual dividend, which yields about 8.3%.

In the first half of 2023, Innovative Industrial reported $127 million in adjusted funds from operations (AFFO) income, a measure of free cash flow for a REIT. This not only rose 12% over one year, but it also funded the $102 million dividend cost for that time frame.

Additionally, the stock also sells at less than 10 times its AFFO income. With the low valuation and the ability to fund its dividend amid industry turmoil, there's a strong case for overlooking the risks and buying IIP stock.