5 Best Income Stocks To Invest In

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

Number of Hedge Fund Holders: 39

Dividend Yield (as of May 7): 6.51%

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.

Altria Group, Inc. (NYSE:MO) declared a $0.90 per share quarterly dividend on February 25, in line with the previous. The dividend was payable on April 29, for shareholders of record on March 25. As of May 7, the company has a dividend yield of 6.51%.

On April 28, Altria Group, Inc. (NYSE:MO) reported earnings for the first quarter of 2022. The company announced an EPS of $1.12, beating analysts’ predictions by $0.03. Furthermore, the revenue for the quarter came in at $4.82 billion. Following the company’s Q1 results, Deutsche Bank analyst Steve Powers raised the price target on Altria Group, Inc. (NYSE:MO) to $60 from $54 and kept a Buy rating on the shares on April 29.

A total of 39 hedge funds were long Altria Group, Inc. (NYSE:MO) in Q4 2021, compared to 45 funds in the previous quarter. Rajiv Jain’s GQG Partners owned the leading stake in the company, with more than 9 million shares worth approximately $435 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.”