If you've been holding back from investing in your future just because you don't have a lot of extra cash to spare, I've got great news. You don't have to be wealthy to start building wealth. For less than $100, you could buy shares of three terrific dividend-paying businesses.
These stocks have low share prices, but their dividend programs could deliver heaps of passive income to your brokerage account. They offer yields above 6%, and there's a pretty good chance that all three will raise their payouts further.
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AT&T
At recent prices, shares of AT&T (T 1.02%) offer a 6.2% yield and a pretty good chance for steady dividend raises in the years ahead.
In 2022, it spun off its unpredictable media business to create Warner Bros. Discovery. Now it's just a telecom company with steadily growing cash flows from millions of mobile and broadband internet subscribers.
Landline subscriptions are down, but those lost revenues are more than offset by customers seeking internet access. Broadband revenues rose 8.1% last year driven by continued expansion of AT&T Fiber. Last year was the sixth in a row that AT&T Fiber reported a million or more net additions.
The company's investments in a 5G upgrade are paying off as well. Mobility-service revenue rose 4.4% last year, which led to record-high operating income from the segment.
AT&T finally launched a fixed-wireless home-internet service last year. The company added 67,000 AT&T Internet Air subscribers in the last quarter of 2023, and uptake could accelerate this year. The service has already expanded to 59 locations from just 35 at the end of 2023.
Pfizer
Pfizer (PFE 0.55%) stock has fallen about 28% over the past year due to disappointing COVID-19 product sales. At recent prices, it offers a big 6.2% dividend yield that will more than likely rise in the years ahead.
Comirnaty and Paxlovid sales have been extremely disappointing, but this company was a leading developer of new blockbuster drugs before the pandemic led to unprecedented cash inflows. A typically shortsighted stock market appears to be forgetting that a great deal of Pfizer's COVID-19 windfall has been reinvested into a slate of new growth drivers.
Last year, Pfizer acquired Seagen for $43 billion in cash. The deal gives the company access to four commercial-stage cancer therapies, including Padcev.
The Food and Drug Administration (FDA) approved Padcev to treat newly diagnosed patients with bladder cancer last December. Newly diagnosed cancer patients tend to stay on therapy much longer than folks with tumors that didn't respond to an initial line of treatment. This is why Padcev sales are expected to soar from $52 million in 2023 to more than $7 billion by 2030.
Altria Group
Shares of the American tobacco giant Altria Group (MO -0.37%) are offering an eye-popping 9.5% dividend yield. The stock is under a lot of pressure because cigarette smoking is in decline, and the losses are accelerating. Altria's biggest problem now is the soaring popularity of Elf Bar and other flavored e-cigarettes that are not authorized for sale by the FDA.
The FDA has been slow to enforce its ban on flavored e-vapor products, but its efforts are ramping up. In addition to sending retailers dozens of warning letters, it's starting to seize incoming shipments. In December, the public health agency teamed up with Customs and Border Protection to seize 41 shipments of unauthorized e-cigarette products. With prodding from public health advocates and the tobacco industry, increasing enforcement seems likely.
Right now, Altria Group is one of three companies with FDA-authorized e-cigarette products. Plus, its NJOY brand markets the only authorized pod-based system.
Altria Group looks like a great dividend stock to buy now because it's still growing its bottom line despite unprecedented competition from illicit flavored e-cigarettes. The company reported revenue net of excise taxes that contracted just 0.9% in 2023. Careful management of expenses and share repurchases allowed adjusted earnings per share (EPS) to rise 2.3% last year.
The steadily declining popularity of cigarette smoking means the dividend raises you receive from this company probably won't be enormous. Meeting its present commitment and raising it faster than the pace of inflation over the long run, though, seems likely.
