Should You Forget Altria? Why You Might Want to Buy This Unstoppable High-Yield Dividend Growth Stock Instead.

Dividend investors often give too much weight to a large dividend yield, allowing that one factor to overshadow equally important investment considerations. That's the story with Altria (NYSE: MO) and its huge 6.9% dividend yield. When you step back and look at the company's fundamentals, you will likely find that this high-yield dividend growth alternative is a better long-term opportunity.

The problem with Altria

Altria makes nicotine-based products. However, its most important category is cigarettes. Smokable products, including cigarettes and cigars, account for around 89% of the company's sales. Cigarettes make up 97% of its volume in the smokables division. Interestingly, the Marlboro brand makes up 85% of the overall volume, so not only are cigarettes the main show, but the spotlight is on just one brand as well.

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The problem is that Altria's cigarette volumes have been in long-term decline. Through the first nine months of 2025, volume dropped 10.6%. That follows a decline of 10.2% in 2024 and a 9.9% falloff in 2023. The trend goes further back, but the worrying direction is very clear.

Altria has been able to offset the hit from the volume drop with price increases and stock buybacks. However, conservative dividend investors shouldn't ignore the fundamental weakness of Altria's business. Notably, despite several attempts, the company hasn't found new products to offset the pain. The lofty dividend yield is a signal of risk.

Clorox has a long history of innovation behind it

As an alternative, dividend lovers might want to consider Clorox (NYSE: CLX) and its historically high 4.5% yield. The stock was a Wall Street darling during the coronavirus pandemic because of its well-known cleaning products. However, it has faced a series of headwinds that have now left it in the doghouse. The list of problems includes the end of the pandemic, which led to a decline in demand for cleaning products, inflation, and a hacking event that materially disrupted the company's operations.

Management has been working on a turnaround, with gross margins recovering dramatically from the low of 33% seen in the second quarter of 2023. Although there has been a bit of margin weakness in early fiscal 2026, gross margin still came in at 41.7% in the first fiscal quarter of the year.

There are a couple of things to like about Clorox, aside from its historically high dividend yield. First, the company holds leading positions in many of the consumer staples segments where it competes. In fact, in several of its chosen product categories, it is the only major branded competitor. This gives the company a notable advantage, as it doesn't have to compete directly with other companies for shelf space or for advertising.

Second, Clorox has a long history of innovation within its "sharp-shooter" business model. Clorox makes products like trash bags, salad dressing, lip balm, kitty litter, and water filters. However, it chooses areas where it can add value.

For example, it is currently rolling out scented trash bags that merge its cleaning product scents with its trash bag business. That dovetails with the company's existing, and still ongoing, innovation effort to add new scents into its cleaning products business. This type of innovation has led to a long history of business growth at Clorox.

The dividend is the proof

Clorox's dividend has been increased annually for 48 consecutive years. That's two years shy of Dividend King status. Given the transitory nature of Clorox's headwinds and the structural nature of the issues facing Altria, dividend growth investors should probably forget Altria and do a deep dive on historically high-yielding Clorox today.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.