5 Best Dividend Stocks For Steady Growth

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

Number of Hedge Fund Holders: 47 

Consecutive Years of Dividend Growth: 51    

Forward Dividend Yield: 7.48%    

Jefferies analyst Owen Bennett kept a Buy rating on Altria Group, Inc. (NYSE:MO) stock on October 19 with a price target of $55 ahead of the expected third quarter earnings report of the firm. According to a forecast by Bank of America, the company will beat market expectations on earnings. In late August, the firm had declared a quarterly dividend of $0.90 per share, up 5% from the previous dividend of $0.86 per share. 

Altria Group, Inc. (NYSE:MO) was founded in 1822 and markets tobacco products. It has over 7,000 employees and is headquartered in Virginia. The firm has a market cap of over $89 billion and posted more than $20 billion in revenue last year. 

At the end of the second quarter of 2021, 47 hedge funds in the database of Insider Monkey held stakes worth $948 million in Altria Group, Inc. (NYSE:MO), up from 38 in the previous quarter worth $1.1 billion.

In its Q2 2021 investor letter, Broyhill Asset Management, an asset management firm, highlighted a few stocks and Altria Group, Inc. (NYSE:MO) was one of them. Here is what the fund said: 

“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.”

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