Key Takeaways
- Altria and Clorox both yielded just over 6% at the Oct. 9, 2026 close: 6.2% and 6.1%.
- Clorox paid $602 million in dividends over the twelve months to June 30, 2026, against $405 million of free cash flow, a 149% cash dividend payout ratio.
- Altria’s dividend used 78% of its free cash flow over the same period. Its net debt is 1.4x EBITDA, against 4.3x for Clorox after the GOJO acquisition.
- Clorox expects adjusted EPS of $5.70 to $6.00 in fiscal 2027, up from $5.53, and says its elevated payout is temporary.
Any investor hunting for a 6% yield is going to come across Altria Group (MO) and Clorox (CLX).
Their latest results pulled in opposite directions, though. Altria’s adjusted EPS rose 4.9% in the first half of 2026, while Clorox’s fell 28% in the fiscal year ended June 30, 2026.
So which is the better high-yield dividend stock?
| Metric | Altria (MO) | Clorox (CLX) |
|---|---|---|
| Dividend yield | 6.2% | 6.1% |
| Current dividend | $4.44 a year | $5.00 a year |
| Dividend growth, 5 years | 4.1% a year (FY2020–FY2025) | 2.0% a year (FY2021–FY2026) |
| Cash dividend payout ratio (TTM to June 30, 2026) | 78% | 149% |
| Net debt / EBITDA (LTM) | 1.4x | 4.3x |
| Interest coverage (LTM) | 13.3x | 6.8x |
| Forward P/E (NTM) | 12.4x | 14.6x |
Altria’s coverage holds steady
Altria’s growth is coming from nicotine pouches, as on! PLUS expands nationally. Domestic cigarette shipment volumes are still declining, which the company blames on industry decline rates, squeezed consumers and smokers moving to e-vapor.
Earnings are holding up anyway: Altria expects 2026 adjusted EPS of $5.61 to $5.72, up 3.5% to 5.5% from $5.42 in 2025.
The cash covers the dividend with room to spare. Over the twelve months to June 30, 2026, Altria paid $7.06 billion in dividends out of $9.11 billion of free cash flow. That’s a comfortable 78% cash dividend payout ratio, and the ratio has stayed between 75% and 82% every fiscal year from 2021 to 2025.
Free cash flow has topped the dividend every fiscal year since 2018, and on Aug. 27, Altria raised its quarterly dividend 4.7% to $1.11 a share, its 61st increase in 57 years.
The main risk is the core business. If cigarette volumes fall faster than pouches grow, the cash behind the dividend shrinks with them.
Clorox’s dividend is outrunning its cash
Clorox’s year went the other way. In the fiscal year ended June 30, 2026, net sales fell 5% to $6.72 billion. Cash from operations fell 38% to $612 million, barely above the $602 million it paid in dividends. Household and Lifestyle shrank against extra ERP-switch shipments a year earlier and higher commodity costs. Health and hygiene, now with Purell from the GOJO acquisition, makes up more than half of net sales and is growing.
Over the twelve months to June 30, 2026, Clorox paid $602 million in dividends against $405 million of free cash flow. That’s a risky 149% cash dividend payout ratio, and the third fiscal year in five (2022, 2024 and 2026) that the dividend cost more than free cash flow.
Management doesn’t see it lasting. On its Aug. 3 call, Clorox called the payout “a bit elevated” and “something more transitory as we rebuild our gross margin and not something structural.” CFO Luc Bellet added that “our commitment to support the dividend has not changed.”
The catch is debt: about $5.1 billion of it after GOJO ($2.147 billion) and a Glad stake ($476 million). S&P cut Clorox’s rating to BBB in February 2026. Bellet said the GOJO debt is meant to be repaid “with the free cash flow that we’ll generate over the next 12 to 18 months,” the same cash the dividend is already outrunning.
Clorox is also changing leaders: on May 28, it said CEO Linda Rendle will step down for health reasons once a successor is appointed.
So which dividend wins?
Altria is the better high-yield dividend stock. It pays a slightly bigger yield and covers it with room to spare. It has also grown its dividend faster: 4.1% a year from fiscal 2020 to fiscal 2025, against Clorox’s 2.0% a year from fiscal 2021 to fiscal 2026.
Put $10,000 into each today, and Altria pays $620 a year to Clorox’s $610. Grow each at its 5-year rate, and Altria’s check reaches about $891 in year 10. Call it an 8.9% yield on your cash, against about $730, or 7.3%, for Clorox. At those rates, Clorox never catches up.
The balance sheets split them too. Clorox’s net debt jumped from 1.8x EBITDA in fiscal 2025 to 4.3x in fiscal 2026, after the GOJO deal.
…against 1.4x for Altria (LTM). Altria’s interest coverage is 13.3x to Clorox’s 6.8x, and Altria is cheaper, at 12.4x forward earnings to 14.6x.
To be fair to Clorox, management stands firmly behind the dividend, and Purell bolsters the part of the business that’s growing. The company also guides for 3.5% to 4.5% organic sales growth and adjusted EPS of $5.70 to $6.00 in fiscal 2027. It’s just that Altria already pays more and covers it today, while Clorox needs its recovery to arrive on schedule.
Of course, if Clorox’s gross margin rebuilds and free cash flow covers the dividend again, this gets a lot closer.
So what is Altria stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
