5 Best Dividend Stocks For Inflation

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

Number Of Hedge Fund Holders: 47

Dividend Yield as of June 24: 8.29%

A Virginia-based corporation and a worldwide distributor, Altria Group, Inc. (NYSE:MO) is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. One of the highest yielding S&P 500 dividend stocks, the tobacco company is a dividend king with a history of 52 years of consecutive dividend growth, making it one of the best stocks for inflation hedge.

Altria Group, Inc. (NYSE:MO) currently offers a quarterly payout of $0.90 per share, with a dividend yield of 8.29%, as of June 24. This June, Goldman Sachs analyst Bonnie Herzog noted that shares of Altria Group, Inc. (NYSE:MO) have traded off sharply following a Wall Street Journal article suggesting that the FDA is preparing a marketing denial order on all JUUL products, which would effectively remove such products from the U.S market. However, the analyst maintained her Buy rating and $59 price target on Altria Group, Inc. (NYSE:MO) shares, citing “strong conviction” that Altria will be able to deliver on its mid-single digit EPS growth target for FY22 and beyond despite this hurdle.

A total of 47 hedge funds out of the 912 tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE:MO) worth roughly $1.95 billion at the end of the first quarter of 2022. This is compared to 39 hedge funds in the previous quarter with a total stake value of approximately $1.05 billion. Rajiv Jain’s GQG Partners is a leading shareholder in Altria Group, Inc. (NYS:MO), with over 18.3 million shares worth more than $956 million.

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

“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 Top Stock Picks of Michael Burry and 10 Low Beta Dividend Stocks with High Yields

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