5 Blue Chip Dividend Stocks with Over 8% Yield

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

Number of Hedge Fund Holders: 45 

Forward Dividend Yield: 8.18%   

Altria Group, Inc. (NYSE:MO) makes and sells tobacco products. There are reports that the company is planning to merge with Philip Morris, another tobacco giant. However, the CEO of the latter has dismissed these reports. 

Altria Group, Inc. (NYSE:MO) stock has benefited from a surge in cigarette sales in the past few months. The company has a market cap of $80 billion and posted more than $20 billion in revenue last year. 

At the end of the third quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $829 million in Altria Group, Inc. (NYSE:MO), down from 47 in the previous quarter worth $948 million.

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.”

You can also take a peek at 10 Best Medical Stocks Under $10 and 15 Best Warren Buffett Stocks to Buy Now.

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