5 Best Dividend Paying Stocks According to David Harding’s Winton Capital Management

1. Altria Group, Inc. (NYSE:MO)

Number of Hedge Fund Holders: 45
Dividend Yield as of January 27: 7.17%
Winton Capital Management’s Stake Value: $10,713,000

Altria Group, Inc. (NYSE:MO) is one of the world’s largest manufacturers of tobacco and related products. Winton Capital Management held shares worth over $10.7 million in the company, increasing its stake by 6% in Q3. Altria Group, Inc. (NYSE:MO) accounted for 0.6% of the hedge fund’s 13F portfolio.

In 2021, Altria Group, Inc. (NYSE:MO) reported a 5% hike in its quarterly dividend at $0.90 per share. The stock’s dividend yield stands at 7.17%. Altria Group, Inc. (NYSE:MO) has increased its dividend 56 times in the past 52 years. In its note to investors, the company announced a targeted payout ratio of 80%, allocating a significant amount of cash flow to shareholders. In January, Morgan Stanley lifted its price target on Altria Group, Inc. (NYSE:MO) to $51, with an Equal Weight rating on the shares.

At the end of Q3 2021, 45 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc. (NYSE:MO), down from 47 in the preceding quarter. These stakes are valued at over $829.7 million.

Broyhill Asset Management mentioned Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter. Here is what the firm has to say:

“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.

MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”

You can also take a look at 10 Best Healthcare Dividend Stocks and 10 Best Finance Stocks To Buy Now

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