As we head into 2025, investors are reflecting on what was a red-hot 2024 for the stock market. Despite ending on a softer-than-expected note as the Fed tempered rate cut expectations, it was still a solid year all around, and the mood remains optimistic.
However, with last year's 20% rally fresh in mind, many are questioning whether the market can sustain such momentum for another 12 months. While individual opportunities for this kind of appreciation remain, another strategy to consider is to focus on dividend-paying stocks.
Dividend stocks not only provide a reliable income stream but also offer stability, even in unpredictable market conditions. For those looking to enhance returns, here are three Dividend Kings with strong yields that can strengthen your portfolio this year, regardless of how the broader market or individual stock prices perform.
1. Altria Group
Despite falling 10% through December, shares of tobacco giant Altria Group Inc (NYSE: MO) still managed to finish 2024 up around 30%. While they need to start trading beyond the $60 level to show they've truly broken out of this multi-year range, this is the best they've looked in a long time.
The fact their dividend yield is 7.7% will only add to investors' temptation. Altria's dividend has more than 50 years of continuous growth behind it, so it's no wonder it's considered one of the most reliable dividend-paying stocks out there.
Coupled with the fact that Bank of America upgraded its rating on the underlying stock last month and gave it a $65 price target, you're looking at one of the more attractive stocks to own for 2025.
2. Philip Morris International
Like Altria, Philip Morris International Inc. (NYSE PM) is another tobacco stalwart with an industry-wide reputation for a strong dividend. They boast more than 16 years' worth of dividend growth, along with a 4.46% dividend yield.
In addition, the PM stock is looking quite attractive right now. After gaining more than 50% from April through November 2024, the stock price fell at the end of the year. But this is starting to look like a golden entry opportunity.
PM's relative strength index (RSI) is in the mid-30s, suggesting it's close to being extremely oversold. For those of us on the sidelines who are keen to add a strong dividend-paying stock to our portfolio for 2025, potential entry points don't get a whole lot better than this.
3. Verizon Communications
Rounding out our list is telecommunications titan Verizon Communications Inc (NYSE: VZ). The stock traded mostly sideways through 2024 and started 2025 towards the bottom of that range. However, with a dividend yield of 6.74%, don't be surprised if Wall Street starts taking advantage of bargain prices.
At the close of last week, Verizon shares were officially extremely oversold, as per their RSI, so it's fair to expect some kind of bounce back in the near term. Given their strong 20-year track record of dividend growth, there's a lot to like about the stock.
While two analysts rated the stock Neutral in December, both gave refreshed price targets that are well above where Verizon shares are trading right now. It will be interesting to see if the stock can continue to consolidate above the $39 level in the coming weeks. One trade to consider is starting to build a position around here and adding to it as it turns north again. And receiving a dividend yield of nearly 7% while you wait for this isn't the worst way to start the new year.
