Ultra-high-yield dividend stocks, or companies with annualized payouts above the 5% mark, tend to underperform the broader markets over periods of less than five years. The core reason is that an elevated yield often indicates a company is facing a major headwind.

Tobacco giant Altria (NYSE: MO) and telecom behemoth AT (NYSE: T) have defied this trend in 2024. Despite their exceptional yields (see below), both stocks are on pace to keep up with the red-hot S 500 and perhaps surpass its performance before year's end.

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Source Fool.com