Irrespective of age, investors love regular cash flows from their investments. Of course, young investors have a higher inclination towards risky ideas and hence are overweight growth stocks. On the other hand, robust dividend yield stocks with a low-beta are ideal for a retirement portfolio. Among the dividend stocks to buy, there can be a further classification.

First, there are dividend stocks to buy that represent companies still at a healthy growth stage. These dividend stocks offer a low yield, but there is ample headroom for dividend growth.

Further, there are dividend stocks that offer a high yield. These represent companies with robust free cash flows and earnings certainty.

This column will focus on three dividend stocks to buy with a yield of over 7%. Dividend investors would love to own these stocks that also trade at an attractive valuation. When overall market sentiments are bullish, total returns from these stocks can be stellar.

Rio Tinto (RIO)

Rio Tinto (NYSE:RIO) is my top pick from stocks that offer a dividend yield of 7% or higher. The industrial commodity stock trades at an attractive forward price-earnings ratio of 7.3.

The stock offers a dividend yield of 8.0% and I believe that dividends are sustainable.

Since the focus is on dividends, there are two important points to note. First, Rio Tinto has an investment grade balance sheet with a healthy cash buffer. As of 2022, Rio reported net-debt-to-EBITDA of 0.16.

Rio reported free cash flow of $36.1 billion between 2020 and 2022. The business is a cash flow machine and this will ensure stable dividends and value creation through share repurchase.

It’s also worth noting that the company’s annual capital expenditure has exceeded $6 billion annually in the last three years. Strong capital investments towards iron ore, copper, and aluminium assets position the company for sustained cash flow upside.

Altria Group (MO)

Altria Group (NYSE:MO) stock is another quality pick from a dividend and overall fundamentals perspective.

MO stock currently trades at a forward price-earnings ratio of 9. Further, the stock offers an attractive dividend yield of 8.2%.

Altria is in a business transformation phase with a gradual decline in sales from smokable products. However, the smokable product segment remains the cash-cow for the company.

Last year, Altria reported operating cash flow of $8.3 billion. For Q1 2023, the company reported OCF of $3 billion. With annualized OCF visibility of $8 to $9 billion, dividends are secure.

Altria has ample flexibility to invest in the non-smokable segment. The company’s products have witnessed an increasing market share in the U.S. oral tobacco category. Altria also has a pending acquisition of NJOY Holdings, which has a portfolio of e-vapor products. Clearance for the acquisition is a potential stock upside catalyst.

Vale (VALE)

Vale (NYSE:VALE) is another stock among commodities that’s undervalued and has a healthy dividend yield.

Industrial commodities are the most undervalued asset class considering the returns CAGR in the last 20 years. I would therefore not hesitate in holding few investment grade balance sheet commodity stocks in the portfolio of dividend stocks.

Vale’s financial performance for Q1 2023 was affected by a lower realized iron ore price. For the quarter, the company reported EBITDA of $3.7 billion.

Even in a low commodity price environment, Value is positioned to deliver an annualized EBITDA of $15 billion. Operating and free cash flows are therefore likely to remain robust with Q1 EBITDA-to-cash conversion ratio of 62%.

Another reason to like Vale is the company’s focus on energy transition metals. This includes copper and nickel. While iron ore remains the cash flow driver, new metals will be long term growth catalysts.

On the date of publication, Faisal Humayun 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.