Key Takeaways
- Verizon yields 6.3% and Altria 5.9%, and both raised their full-year earnings outlooks in late October.
- Verizon’s dividend used 52% of its free cash flow over the twelve months to Sept. 30, against 78% for Altria.
- Altria has grown its dividend faster, 4.1% a year from fiscal 2020 to fiscal 2025 against Verizon’s 1.9%, so its income would pass Verizon’s around 2030 at those rates.
- Verizon’s stock fell 9% on Oct. 9 after SpaceX agreed to buy spectrum to take Starlink into mobile service.
Anyone hunting for a 6% yield ends up looking at Verizon Communications (VZ) and Altria Group (MO). And both just raised their full-year outlooks, Verizon on Oct. 26 and Altria three days later.
But each heads into the next decade with a different problem. Verizon has a new competitor in Starlink, while Altria’s dividend leans on a cigarette business that’s still shrinking. So which one gets my dividend dollars for the next 10 years?
| Metric | Verizon (VZ) | Altria (MO) |
|---|---|---|
| Dividend yield | 6.3% | 5.9% |
| Annual dividend | $2.83 | $4.44 |
| Dividend growth, fiscal 2020-2025 | 1.9% a year | 4.1% a year |
| Cash dividend payout ratio (TTM) | 52% | 78% |
| Net debt / EBITDA | 3.3x | 1.7x |
| Interest coverage | 4.3x | 10.9x |
| Forward P/E | 8.8x | 13x |
Source: TIKR and StockAnalysis, Nov. 9, 2026; payout ratios for the twelve months to Sept. 30, 2026.
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Verizon’s cash has room to spare
Verizon’s dividend is well-covered, eating up 52% of its free cash flow over the twelve months to Sept. 30, 2026: $11.72 billion paid out of $22.38 billion.
And that cash is growing. Free cash flow rose 12.1% to $7.8 billion in the third quarter from a year before, and Verizon now expects full-year growth approaching 12%. Mobility and broadband service revenue grew 2.9% to $23.5 billion in the quarter, and Verizon guides for about 4% growth in the fourth.
Free cash flow has covered the dividend every year since fiscal 2018, with fiscal 2022’s 77% the tightest fit:
Management said on its third-quarter call that it remains “committed to growing the dividend.” On Verizon’s record, that means small raises: 1.9% a year from fiscal 2020 to fiscal 2025, from $2.48 to $2.73 a share.
The main risk is Starlink. On Oct. 9, SpaceX agreed to buy nationwide low-band spectrum to take Starlink into mobile service, and Verizon’s stock fell 9% that day. Elon Musk added on Nov. 6 that SpaceX could just buy a legacy carrier for its spectrum, though he didn’t name one. Verizon’s third quarter shows no hit yet: postpaid phone net additions came to 406,000.
Altria raises faster, with less room
Altria pays the smaller check, but it has raised it faster: 4.1% a year from fiscal 2020 to fiscal 2025, from $3.40 to $4.16 a share. In August, its board raised the quarterly payout 4.7% to $1.11 a share, “our 61st increase in 57 years,” as Altria put it on its third-quarter call. It targets mid-single-digit raises each year through 2028.
That pace uses more of the cash. Altria’s dividend ate up a fuller 78% of free cash flow over the twelve months to Sept. 30, 2026, $7.12 billion of $9.07 billion. It has held between 74.6% and 82.0% in each of fiscal 2021 through 2025:
Earnings are keeping up with the goal. Adjusted diluted EPS rose 4.8% to $1.52 in the third quarter, and on Oct. 29 Altria raised its full-year outlook to $5.66-$5.74 a share, 4.5% to 6.0% growth on 2025’s $5.42. The stock jumped 7% on the report, and the board added $1 billion to its share buyback in October.
Nicotine pouches are doing the growing, with on! shipment volume up 13.3% in the quarter. But cigarette and moist snuff volumes are shrinking, and net revenues rose just 1.0% to $6.1 billion. So every raise at the goal’s pace has to come from a core business that’s getting smaller.
So which dividend wins?
Verizon gets my dividend dollars for the next 10 years.
On the math alone, Altria edges it. At each stock’s five-year rate, $10,000 in Altria would pay about $7,122 over the decade, against about $6,879 in Verizon, or about $243 more. Altria’s income would pass Verizon’s in about four years, in 2030. By year 10, it’d pay about $848, an 8.5% yield on your original $10,000, against about $749, or 7.5%, from Verizon.
But that $243 rests on Altria raising its dividend 4.1% a year for a full decade from a 78% payout, and its own goal only runs through 2028. Verizon just has to keep making small raises with nearly half its free cash flow to spare. And it trades at 8.8x forward earnings, right at its five-year average and below March’s 10.5x high:
This isn’t to say Altria’s dividend is in danger. Free cash flow has covered it every year since fiscal 2018, its net debt is a modest 1.7x EBITDA, and a company with 61 raises in 57 years will fight hard for the 62nd. It’s just that over a decade, I’d rather own the dividend with more room behind it.
Of course, if Starlink’s mobile service starts winning Verizon’s customers, that room would shrink fast, and I’d think again.
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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!
