In this article we will take a look at the 5 best safe dividend stocks to buy now. To read our detailed analysis of dividend investing, go to 10 Best Safe Dividend Stocks to Buy Now.
5. National Fuel Gas Company (NYSE: NFG)
Number of Hedge Fund Holders: 16
Dividend Yield: 3.48%
National Fuel Gas Company (NYSE: NFG) is an energy company operating through four segments, namely exploration and production, pipeline and storage, gathering, and utility. The company has had 50 consecutive years of dividend growth so far and has a dividend yield of 3.48% currently. As such, it ranks 5th on our list of the best safe dividend stocks to buy now.
This April, JP Morgan initiated coverage of National Fuel Gas Company (NYSE: NFG) with a $51 price target and a Neutral rating, with analyst Zach Parham commenting that the shares are currently fairly valued.
In the fiscal second quarter of 2021, National Fuel Gas Company (NYSE: NFG) had an EPS of $1.34, beating estimates by $0.14. Its $551.12 million revenue also demonstrated a 12.2% growth year-over-year and surpassed the previous quarter’s $441.16 million revenue. The stock has gained 26.39% in the past 6 months and 32.73% year to date and has a forward PE ratio of 13.89.
The first quarter of 2021 saw 16 hedge funds holding stakes worth over $92 million in National Fuel Gas Company (NYSE: NFG), up from 13 hedge fund holders with stakes worth $88 million in the previous quarter.
Heartland Advisors mentioned National Fuel Gas Company (NYSE: NFG) in its Q1 2021 investor letter. Here’s what they said:
“The ho-hum Utilities sector isn’t typically a place to hunt for strong growth prospects. However, for investors willing to do their homework, opportunities do exist. Portfolio holding National Fuel Gas Company (NFG) is a prime example.
NFG is a dividend aristocrat—50 consecutive years of dividend increases. Although the business is lumped in with run-of-the-mill power companies, it is much more diverse. In addition to its utility operations, a pipeline and storage division produces almost a quarter of its profits, and the company generates nearly 40% of its bottom line from natural gas exploration and production.
Shares of NFG are trading at a mid-teens discount to their historic average based on price/book. Given the state of the energy industry over the past few years, we believe the company’s gas unit could be an overlooked source of growth. Additionally, the utility recently received regulatory approval on a natural gas pipeline expansion in Pennsylvania, which is expected to produce a windfall in free cash flow.”
4. Federal Realty Investment Trust (NYSE: FRT)
Number of Hedge Fund Holders: 16
Dividend Yield: 3.52%
Federal Realty Investment Trust (NYSE: FRT) is a real estate company and is a renowned player in the industry. The company operates on and redevelops high-quality retail-based properties in the US. 2020 was the company’s 53rd consecutive year of dividend growth, and with its 3.52% dividend yield, it ranks 4th on our list of the best safe dividend stocks to buy now.
This July, Truist raised its price target on Federal Realty Investment Trust (NYSE: FRT) from $110 to $120, with analyst Ki Bin Kim commenting that the company’s recent acquisition alongside other factors will benefit it, alongside its positive outlook during the economic recovery. Scotiabank also upgraded the stock to Outperform.
On June 8th, Federal Realty Investment Trust (NYSE: FRT) acquired four new properties, namely Grossmont Shopping Center in San Diego, Chesterbrook Shopping Center in Virginia, and Camelback Colonnade and Hilton Village in Phoenix. The latter two have yet to be fully acquired by the company but it has entered into a binding contract for the deals in which it will own 80% interest. The land totals 1.75 million square feet valued at $407 million and will be fully owned by Federal Realty Investment Trust (NYSE: FRT) by the end of June.
The company also reported first-quarter results showing that its $216.82 million revenue beat estimates by $11.12 million. They also beat FFO estimates by $0.14 with $1.17 in FFO. Federal Realty Investment Trust (NYSE: FRT) gained 35.39% in the past 6 months and 49.3% year to date.
In Q1, 16 hedge funds held stakes in Federal Realty Investment Trust (NYSE: FRT) worth $43 million, down from 17 hedge fund holders in the previous quarter with stakes worth $60 million.
3. Northwest Natural Holding Company (NYSE: NWN)
Number of Hedge Fund Holders: 16
Dividend Yield: 3.67%
Northwest Natural Holding Company (NYSE: NWN) is a utility company providing natural gas distribution in the US. The company also works in the water business and has other investment activities. It has a dividend yield of 3.67%, having increased it for 65 years in a row, and ranks 3rd on our list of the best safe dividend stocks to buy now.
This May, Wells Fargo raised its price target on Northwest Natural Holding Company (NYSE: NWN) from $49 to $58, in light of the company’s quarterly results and higher peer group multiples making analysts positive on the shares’ performance. Analyst Sarah Akers has kept an Equal Weight rating on Northwest Natural Holding Company (NYSE: NWN) shares.
In the first quarter of 2021, Northwest Natural Holding Company (NYSE: NWN) had an EPS of $1.94, beating estimates by $0.12, while its revenue of $315.95 million demonstrated a 10.8% growth year-over-year and surpassed the previous quarter’s $260.27 million revenue. It has gained 9.53% in the past 6 months plus 21.09% year to date.
16 hedge funds held stakes worth $28 million in Northwest Natural Holding Company (NYSE: NWN) in Q1, and while the number of hedge fund holders has remained the same between the fourth quarter of 2020 and the first quarter of 2021, the stake value has increased from the previous quarter’s value of $25 million.
2. Universal Corporation (NYSE: UVV)
Number of Hedge Fund Holders: 10
Dividend Yield: 5.68%
Universal Corporation (NYSE: UVV) is a tobacco-producing company that operates worldwide through two segments, namely tobacco operations and ingredients operations. The company also provides value-added manufacturing processes to produce vegetable and fruit-based ingredients for the food and beverage industry. Universal Corporation (NYSE: UVV) saw its 50th consecutive year of dividend growth in 2020 and has a dividend yield of 5.68% currently. It ranks 2nd on our list of the best safe dividend stocks to buy now.
This May, Universal Corporation (NYSE: UVV) raised its annual dividend to $3.12 per common share, payable in August. Universal Corporation (NYSE: UVV) also reported revenue of $490.24 million in the fiscal fourth quarter of 2021, alongside an EPS of $1.59, surpassing the previous quarter’s $1.34 EPS. The company gained 11.42% in the past 6 months and 16.51% year to date.
By the end of the first quarter of 2021, 10 hedge funds held stakes in Universal Corporation (NYSE: UVV) worth $92 million, up from the previous quarter’s numbers of 9 hedge fund holders with stakes worth $89 million.
1. Altria Group, Inc. (NYSE: MO)
Number of Hedge Fund Holders: 38
Dividend Yield: 7.24%
Altria Group, Inc. (NYSE: MO) is another tobacco company and it manufactures cigarettes, oral tobacco products, and wine in the US. Some of the company’s famous brands include Marlboro, Black & Mild, and Copenhagen. It ranks 1st on our list of the best safe dividend stocks to buy now, with a 7.24% dividend yield and 51 years of consecutive dividend growth.
This July, Stifel retained its Buy rating and $56 price target on Altria Group, Inc. (NYSE: MO), with analyst Christopher Growe commenting that the company’s sale of its wine business for $1.2 billion is a positive development.
In the first quarter of 2021, Altria Group, Inc. (NYSE: MO) beat EPS estimates by $0.02 with a $1.07 EPS and reported revenue of $4.88 billion. Altria Group, Inc. (NYSE: MO) gained 11.14% in the past 6 months and 17.29% year to date and it also has a forward PE ratio of 10.42.
In the first quarter of 2021, 38 hedge funds held stakes in Altria Group, Inc. (NYSE: MO) worth $11 billion, up from the fourth quarter of 2020 numbers of 37 hedge fund holders with stakes valued at $10.8 billion.
Oakmark Funds mentioned Altria Group, Inc. (NYSE: MO) in their Q1 investor letter. Here’s what they said:
“We initiated a new position in Altria, which commands roughly 50% of the cigarette and smokeless tobacco market in the U.S. Both of these markets are duopolies that we believe have exhibited strong pricing power over time. While the shares trade at a low multiple of reported earnings, Altria also owns valuable stakes in other non-core businesses, including ~10% of AB InBev, 35% of Juul and 45% of Cronos. Excluding the values of these stakes and their respective earnings contribution, we were able to purchase shares of Altria for less than seven times our estimate of next year’s earnings. This compares to other consumer brands with less favorable earnings growth profiles that trade for three times Altria’s multiple. The company also has several promising reduced-risk products that may appeal to tobacco users, including On! and iQOS. We believe these products position the company well to help consumers slowly transition to a tobacco-free future. We expect management to return the vast majority of future earnings to shareholders given the company’s strong balance sheet, high free cash flow conversion and limited capital requirements.”
See also 10 Best Safe Dividend Stocks According to Billionaire Dan Loeb and 10 Best Dividend Stocks to Buy Now According to Billionaire Cliff Asness.
