2 High-Yield Value Stocks to Buy and One to Boot

High-yield stocks probably won’t yield nearly as much after the Federal Reserve has had the chance to cut interest rates a few times. Undoubtedly, we haven’t had the first rate cut yet, but investors seem optimistic as the Fed finally looks to make a move, perhaps as soon as September. In any case, the high-yield value plays represent an intriguing, albeit less popular, opportunity as other investors continue punching their ticket into high-growth technology plays.

As the mega-cap tech stars continue to draw in considerable amounts of investment dollars, questions linger as to when we’ll finally reach “peak concentration” at the very top of the tech scene. Undoubtedly, Nvidia (NASDAQ:NVDA) stock continued to surge higher, even in the face of doubters. Should NVDA stock reverse course and drag the rest of mega-cap tech into a correction, perhaps the high-yield value plays could beckon investors seeking a rotation.

Here are two intriguing high-yield value plays that look buyable, followed by one to steer clear of.

Hasbro (HAS)

Hasbro (NASDAQ:HAS) is a long-time toymaker attempting to recover after a nasty slip from 2019 all-time highs. Now down close to 50% from its peak, HAS stock looks like a consumer discretionary that holds tremendous potential if the consumer has a return to peak health. Perhaps the falling-rate trajectory and ongoing decline of sky-high inflation could be enough to convince consumers to return to the toy store.

When it comes to Hasbro, it’s more than just children’s toys. The firm also stands to gain from demand for adult-friendly classics, like Monopoly. And we’re not just talking about the board game, either. The Monopoly Go! app can help pad coming quarterly earnings, according to Bank of America analysts.

These analysts also see the toy company “poised for strong 2025 momentum” as several catalysts gradually come into play. With robust newfound momentum (up 42% from November 2023 lows) and a nice 4.6% dividend yield, HAS stock is a stand-out high-yielder for value seekers.

AT&T (T)

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AT&T (NYSE:T) is a telecom titan with a towering 6.3% dividend yield at writing. At writing, T stock also looks incredibly cheap at 9.5 times trailing price-to-earnings (P/E). Despite the generous dividend payout and the seemingly too-good-to-be-true single-digit P/E ratio, AT&T stock boasts one of the least appealing 10-year charts out there.

At writing, the stock’s down close to 46% from its 2016 highs, so you’ll be going against the long-term trend, even with recent relief gains enjoyed over the past year and the somewhat promising strategic plan in place.

Barclays analyst Kannan Venkateshwar thinks AT&T stock is a buy as it continues its multi-year transformation. Specifically, Ventkateshwar likes the catalysts ahead, the low churn versus rivals, and the “cleaner outlook for growth.” I couldn’t agree more. AT&T’s prior efforts are finally starting to pay dividends. With such depressed expectations, legacy telecom may not need to prove much to march even higher.

Altria (MO)

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Altria (NYSE:MO) is a tobacco company that seems destined to stay in the penalty box. Cigarettes seem to be in secular decline, pushing the Big Tobacco industry to shift more toward no-smoke products. Though Altria plans to move toward a smoke-free future, I don’t think there’s any escaping the multi-decade decline in cigarettes.

Further, younger generations seem to be more health conscious, not just regarding not smoking but also regarding limiting alcohol consumption. It’s tough to bet against a secular trend that’s showing no signs of reversing course.

The 8.84% dividend yield looks tempting, but with growth prospects poised to go up in smoke and a considerable amount of long-term debt on the balance sheet (over $25 billion at the end of last year), it just doesn’t seem wise to buy no matter how much cheaper the stock gets. At 9.4 times trailing P/E, MO stock looks cheap, but it’s probably nothing more than a cigar butt.

On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.