June's Ideal Dividend Dogs: 3 Safer High-Yield Picks for Value Investors

In a market where the S&P 500 yields just 1.2%, investors craving income are turning to "Dividend Dogs"—stocks with sky-high yields. But not all high-yielders are created equal. This June, three utilities and consumer staples giants—Altria Group (MO), Northwest Natural Holding Co. (NWN), and Canadian Utilities (CDUAF)—stand out as safe, undervalued picks where annual dividends from a $1,000 investment rival or exceed their share prices. Let's dive into the data.

Altria Group (MO): The Highest-Yielding "Dividend King" with a Risk-Adjusted Twist

Altria's 6.8% dividend yield is the highest among the trio, making it a top pick for income hunters. With a share price of around $59 in June 2025, a $1,000 investment buys ~16.9 shares, generating roughly $68 in annual dividends—a yield that outpaces the S&P 500 by over 5x.

Why It's Safe (Despite Risks):
- Altria's free cash flow of $4.97 per share comfortably covers its $4.04 annual dividend, providing a 23% cushion.
- Analysts warn of long-term risks: cigarette volumes fell 13% YoY in Q1 2025, and its nicotine pouches (e.g., on!) lag peers.

Why Buy Now:
While growth is challenged, Altria's fortress-like balance sheet and consistent dividend hikes (52 straight years) make it a defensive play. The stock's June performance—trading between $58–$60—aligns with its fundamentals.

Northwest Natural (NWN): A Stable Utility with Hidden Upside

Northwest Natural, a regional utility serving Oregon and Washington, offers a 4.9% yield. Its Q1 2025 net income surged 37% YoY to $87.9 million, fueled by the acquisition of SiEnergy and rate hikes in Oregon.

Safety First:
- Utilities like NWN are recession-resistant, with regulated rate structures shielding earnings.
- The company's Q1 adjusted EPS of $2.28 beat estimates by 14%, and it reaffirmed 2025 guidance of $2.75–$2.95.

Why It's Undervalued:
While its stock price isn't explicitly stated in June data, its 4.9% yield implies a price of ~$41/share (assuming a $2.01 annual dividend). A $1,000 stake would generate ~$49/year—a decent yield with minimal volatility.

Canadian Utilities (CDUAF): A 52-Year Dividend Streak in a Growing Sector

CDUAF, a Canadian utility with exposure to natural gas and electricity transmission, yields 4.8%. Its Q1 2025 adjusted EPS of $0.61 rose slightly YoY, and projects like the Yellowhead Mainline and Central East Transfer Out promise growth.

Safety in Infrastructure:
- Regulated utilities like CDUAF benefit from steady cash flows and inflation-protected rate hikes.
- Despite a 0.2% dip in Q1 earnings, its dividend safety score is rated “Strong,” with free cash flow covering payouts.

Why Buy:
Assuming a share price of ~$26.50 (based on its May 2025 ex-dividend closing price), a $1,000 investment yields ~$48 annually. Its 52-year dividend streak and infrastructure tailwinds make it a reliable income machine.

The Case for Immediate Action

These three picks combine high yields, dividend safety, and value—a trifecta for value investors. While Altria's risks are clear, its yield and cash flow justify a position in a diversified portfolio. Utilities like NWN and CDUAF offer stability and upside as energy infrastructure spending accelerates.

Key Takeaways:
1. Altria is the highest-yielding option but requires a tolerance for sector-specific risks.
2. Utilities (NWN, CDUAF) are safer but slightly lower-yielding; their stability makes them ideal for retirees or risk-averse investors.
3. All three trade at prices where dividends rival or exceed their yields' cash returns—a rare opportunity in today's market.

Final Call: Act Before Yields Compress

With the Fed pausing rate hikes and inflation cooling, now is the time to lock in these high yields. These stocks are undervalued relative to their cash flows and growth prospects. For income-focused investors, this trio offers risk-adjusted returns that few sectors can match.

Recommendation:
- Altria: Buy at $59/share for a 6.8% yield; set a stop-loss at $55.
- Northwest Natural: Target a 4.9% yield; aim for a price below $42/share.
- Canadian Utilities: Look for dips below $26/share to secure a 4.8% yield.

In a low-yield world, these “Dividend Dogs” are the best bet for steady income—just don't overlook the risks.

Disclosure: The author holds no positions in the stocks mentioned.