If the Fed is indeed inching toward a more dovish stance—as Powell all but hinted at in late August—dividend stocks could once again find themselves in the spotlight. Historically, when policy rates begin to drift lower, the investor playbook shifts: the easy yield from government Treasuries becomes less compelling, and the hunt for dependable income turns back to stocks with durable payouts. With consensus already leaning heavily toward a September rate cut, the stage looks set for dividend stalwarts to regain favor.
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Three names in particular—Altria (MO), AT&T (T), and Chevron (CVX)—stand out as potential beneficiaries. Each offers a combination of established cash flow, attractive yield, and defensive characteristics that can draw renewed interest if and when the Fed begins its dovish cycle.
As the Fed trims rates, investors traditionally migrate back into high-yielding assets such as government, municipal, and corporate bonds. Equities with steady dividends often rise alongside that trend, and MO, T, and CVX are positioned to capture that inflow.
Altria just raised its quarterly dividend, AT&T enjoys sturdier free cash flow on the back of steady postpaid gains, and CVX’s posts record Permian volumes while the now-closed Hess deal expands the runway. This is all three offer sizable yields, which start to look more compelling as the risk-free alternative fades.
Altria (NYSE:MO)
Altria’s Q2 was a tidy reminder of how a mature cash machine behaves. Adjusted EPS rose 8.3% to $1.44 as the company lifted the lower end of 2025 EPS guidance to $5.35–$5.45 (+3%–5% YoY). The product mix is shifting, with smokeable volume sliding, but pricing and juicy 64% margins have kept the engine humming, while its oral nicotine brand did the heavy lifting during the quarter. Management also returned over $4 billion to holders in the first half via dividends and buybacks.
Notably, Altria lifted its quarterly payout to $1.06 (annualized $4.24) last month and reiterated its stance for a “progressive dividend” goal targeting mid-single-digit growth through 2028. At today’s share price of ~$66.65, that’s an implied forward yield around 6.4%.
Yes, it’s notably lower than the 8%-10% yields Altria used to offer a few years ago, as the stock has appreciated, but today’s yield is still high enough to attract income seekers with rates set to decline from here. It’s worth noting that Altria has raised its dividend for 56 consecutive years, which speaks volumes regarding its reliability for income generation.
Is Altria Stock a Buy, Hold, or Sell?
As has historically been the case, analyst sentiment is mixed on Altria. The stock has a Hold consensus rating, based on three Buy, five Hold, and two Sell ratings assigned over the past three months. Further, despite the possibility of the stock benefiting from rate cuts, MO’s average stock price target of $61.22 implies ~8.2% downside over the next twelve months.
AT&T (NYSE:T)
AT&T’s second quarter read like a masterclass in execution. The company added 401,000 postpaid phone subscribers with just 0.87% churn, logged 243,000 fiber net adds (plus another 203,000 from Internet Air), and grew mobility service revenue by 3.5%. Free cash flow came in at $4.4 billion, and management put $1 billion toward buybacks while also completing the sale of its remaining 70% stake in DirecTV to TPG—a meaningful simplifier for the story. These are exactly the kind of steady, unflashy results that underpin a reliable dividend.
On the earnings call, management doubled down on the same message: consistent subscriber growth and disciplined operations. The quarterly dividend remains $0.2775 per share, which works out to a mid-3% yield at roughly $29.49.
Importantly, coverage is improving as fiber scales and capex levels off. If Fed rate cuts drive Treasury yields lower, then a 3%–4% yield supported by rising free cash flow stops looking sleepy—and starts looking like a sensible bet on AT&T.
Is AT&T Stock a Good Buy?
On Wall Street, AT&T stock features a Strong Buy consensus rating based on 15 Buy and four Hold ratings. No analyst rates the stock as a Sell. T’s average stock price target of $31.37 implies roughly 6% upside potential over the next 12 months.
Chevron (NYSE:CVX)
Energy’s cycle is messier than telecom’s, but Chevron’s Q2 once again reminded us why the company is considered a dividend stalwart. Adjusted earnings totaled $3.1 billion, driven by record production (1 million BOE/day in the Permian) and $5.5 billion returned to shareholders during the quarter. Management underlined adjusted free cash flow of ~$4.9 billion and, importantly for scale and longevity, said the Hess acquisition closed in July, bolstering the growth runway (Guyana, LNG, Permian).
Chevron paid $1.71 per share in September and has now increased its dividend for 38 straight years. With shares at around $158, the implied forward yield (annualized $6.84) is roughly 4.3%. It’s not eye-popping, but paired with high-quality barrels, a strengthened portfolio, and disciplined capital returns, it’s the sort of income many allocators will gladly hold onto, easing their concerns. Note that over the past five years, CVX’s annual dividend increase has averaged nearly 6.5%, which is a respectable pace given the oil giant’s maturity at this point.
Is Chevron a Buy, Hold, or Sell?
Chevron is currently covered by 15 Wall Street analysts, and sentiment is mostly bullish. The stock carries a Moderate Buy consensus powered by 10 Buy and five Hold ratings. In the meantime, CVX’s average stock price target of $170.71 indicates almost 9% upside potential over the next twelve months.
Three Cash Machines Poised for an Easing Cycle
As the Fed’s upcoming policy shifts reduce the relative appeal of risk-free yields, the calculus for dividend equities improves meaningfully. Within this context, Altria offers one of the most attractive cash yields in the U.S. large-cap space, supported by durable pricing power and a defined dividend growth framework.
AT&T delivers stable, mid-single-digit service revenue growth, enhances free cash flow, and has a payout that appears increasingly well-covered. Chevron, while exposed to commodity cyclicality, balances that risk with scale, a strong balance sheet, and a multi-decade track record of dividend reliability and growth.