My Forever Portfolio: 3 Dividend-Paying Value Stocks That Are Too Cheap to Ignore.

As the 10-Year Treasury yield tops 5% -- its highest level since 2007 -- it might seem like a bad time to buy blue chip dividend stocks. In this environment, low-risk CDs and T-bills offer higher yields than many dividend stocks, making them the more sensible play for many investors.

However, dividend stocks with yields higher than the 10-Year Treasury but cheaper than the S&P 500 (SNPINDEX: ^GSPC), which has a forward price-to-earnings ratio of 19, could still hold up well in this challenging market. These three stocks in my portfolio fit that description: Altria (NYSE: MO), Realty Income (NYSE: O), and Main Street Capital (NYSE: MAIN).

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Altria

Altria, which owns Philip Morris USA, is the largest tobacco company in the United States. It owns Marlboro, the country's top cigarette brand, as well as other smaller retail brands.

Altria might seem like a shaky stock to own as fewer Americans smoke each year, but the company offsets that pressure with price hikes, cost-cutting, and large buybacks. It's also expanding its portfolio of smoke-free products -- including e-cigarettes, nicotine pouches, and snus -- to curb its long-term dependence on smokeable products. It acquired the country's top e-cigarette brand, NJOY, in 2023. Its sales of On nicotine pouches are also rising.

By 2028, Altria expects to generate at least $5 billion in smoke-free revenue, equivalent to nearly a quarter of its projected sales, to offset its declining cigarette shipments. It pays a hefty forward dividend yield of 6.3%, and it's raised that payout 61 times over the past 57 years. That makes it an elite Dividend King, which has raised its dividend for at least 50 consecutive years.

For 2026, Altria expects its adjusted EPS to rise 3.5%-5.5% to $5.61-$5.72, easily covering its forward dividend rate of $4.44. At $69, it trades at just 12 times the midpoint of that estimate.

Realty Income

Realty Income is one of the world's largest real estate investment trusts (REITs). It owns more than 15,500 commercial properties, which it leases to about 1,800 clients across 92 industries. It isn't immune to rate hikes, which drive up the cost of acquiring additional properties and create headwinds for its tenants, but its occupancy rate has stayed above 96% since its 1994 IPO.

As an REIT, Realty Income must distribute at least 90% of its taxable income to its investors as dividends to maintain a lower tax rate. It's one of the few REITs that pay monthly dividends; it offers a forward yield of 5.5%, and it's raised its payout 136 times since its public debut.

For 2026, Realty expects its adjusted funds from operations (AFFO) to rise 4% to $4.44-$4.45 per share, which will easily cover its forward dividend rate of $3.26 per share. At $59, it still looks like a bargain at 13 times that estimate.

Main Street Capital

Main Street Capital is a business development company (BDC) that provides loans to smaller "middle market" companies that can't secure financing from larger banks because they're considered higher-risk clients. In exchange for taking on that risk, BDCs charge higher interest rates (but still pegged to the Fed's benchmark rates) than conventional banks.

To dilute its overall risk, Main Street spreads its debt and equity financing across 180 cumulative investments. Like REITs, BDCs must pay out at least 90% of their taxable income as dividends. Main Street is also one of a handful of BDCs that pays monthly dividends, while the Fed's interest rate hikes usually boost its distributable net investment income (DNII) per share. In 2025, its DNII of $4.21 per share easily covered its dividend payments of $3.03 per share.

Main Street pays a forward yield of 5.6%; it has never reduced its payout since its 2007 IPO; and it has paid higher annual dividends over the past five consecutive years. Analysts expect its EPS to dip 26% this year as interest rates remain flat and the middle-market sector cools. But at $56, it still looks undervalued at 14 times this year's earnings.

Leo Sun has positions in Altria Group, Main Street Capital, and Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.