Forget Rental Properties: Invest $10,000 Into These Dividend Growth Stocks With Ultra-High Yields for Passive Income

Core Viewpoint - The article emphasizes the attractiveness of high-dividend-yield stocks, particularly in the tobacco sector, as a source of passive income compared to traditional rental properties [1][2][3]. Group 1: Altria Group (MO) - Altria Group, owner of the Marlboro brand, has a low price-to-earnings ratio of 8.7, making it an appealing investment despite industry skepticism [4]. - The company offers a dividend yield of 7.83%, translating to $783 in annual dividends for a$10,000 investment, and has doubled its dividend payout over the last decade [5]. - Altria's free cash flow per share has increased by 125.8% over the past 10 years, showcasing its ability to maintain cash flow despite declining cigarette usage [6][7]. Group 2: British American Tobacco (BTI) - British American Tobacco has a higher dividend yield of 8.21%, providing $821 in annual passive income on a$10,000 investment [8]. - The company has successfully expanded into new-age nicotine products, which became profitable in 2023 and are expected to drive future earnings and cash flow growth [9]. - Despite challenges from foreign currency depreciation, British American Tobacco has increased its free cash flow per share by 35% since 2019, with further growth anticipated over the next decade [10][11]. Group 3: Comparative Analysis - Both Altria Group and British American Tobacco offer dividend yields significantly higher than the S&P 500 index, which currently stands at 1.32% [12]. - With the Federal Reserve lowering interest rates, these tobacco stocks present attractive options for investors seeking passive income [12].