In this article, we will be taking a look at 5 cheap dividend kings with over 2% yield. To read our detailed analysis of dividend investing, you can go directly to see the 10 Cheap Dividend Kings with Over 2% Yield.
5. Black Hills Corporation (NYSE: BKH)
Number of Hedge Fund Holders: 14
Dividend Yield: 3.16%
Number of Years of Consistent Dividend Increases: 49
Share Price as of August 24: $71.58
Black Hills Corporation (NYSE: BKH) is an electric and natural gas utility company operating in the US. It ranks 5th on our list of cheap dividend kings with over 2% yield. The company works through its Electric Utilities, Gas Utilities, Power Generation, and Mining segments.
Sarah Akers, an analyst at Wells Fargo, holds an Overweight rating on shares of Black Hills Corporation (NYSE: BKH) alongside a raised price target of $75, compared to the previous $70 price target, as of this April.
In the second quarter of 2021, Black Hills Corporation (NYSE: BKH) had an EPS of $0.40, beating estimates by $0.02. The company’s revenue was $372.60 million, up 13.98% year over year but missing estimates by $2.94 million. Black Hills Corporation (NYSE: BKH) has gained 16.76% in the past 6 months and 18.22% year to date.
By the end of the second quarter of 2021, 14 hedge funds out of the 873 tracked by Insider Monkey held stakes in Black Hills Corporation (NYSE: BKH) worth roughly $63 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $90 million.
4. National Fuel Gas Company (NYSE: NFG)
Number of Hedge Fund Holders: 12
Dividend Yield: 3.59%
Number of Years of Consistent Dividend Increases: 51
Share Price as of August 24: $50.69
National Fuel Gas Company (NYSE: NFG), another utilities company, operates through its Exploration and Production, Pipeline and Storage, Gathering, and Utility segments. The company ranks 4th on our list of cheap dividend kings with over 2% yield and is based in New York.
This April, JPMorgan’s Zach Parham began covering shares of National Fuel Gas Company (NYSE: NFG) with a Neutral rating and a $51 price target.
In the fiscal third quarter of 2021, National Fuel Gas Company (NYSE: NFG) had an EPS of $0.93, beating estimates by $0.11. The company’s revenue was $394.40 million, up 22.1% year over year but missing estimates by $89.44 million. National Fuel Gas Company (NYSE: NFG) has gained 9.6% in the past 6 months and 22.3% year to date.
By the end of the second quarter of 2021, 12 hedge funds out of the 873 tracked by Insider Monkey held stakes in National Fuel Gas Company (NYSE: NFG) worth roughly $132 million. This is compared to 16 hedge funds in the previous quarter with a total stake value of approximately $93 million.
Heartland Advisors, an investment management firm, mentioned National Fuel Gas Company (NYSE: NFG) in its first-quarter 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.”
3. Northwest Natural Holding Company (NYSE: NWN)
Number of Hedge Fund Holders: 11
Dividend Yield: 3.7%
Number of Years of Consistent Dividend Increases: 65
Share Price as of August 24: $51.95
Northwest Natural Holding Company (NYSE: NWN) is a provider of regulated natural gas distribution services in the US. The company ranks 3rd on our list of cheap dividend stocks with over 2% yield.
Sarah Akers from Wells Fargo has also raised the price target on shares of Northwest Natural Holding Company (NYSE: NWN) from $49 to $58, as of this May. The analyst holds an Equal Weight rating on the shares as well.
In the second quarter of 2021, Northwest Natural Holding Company (NYSE: NWN) had an EPS of -$0.02, beating estimates by $0.12. The company’s revenue was $148.92 million, up 10.33% year over year and beating estimates by $6.28 million. Northwest Natural Holding Company (NYSE: NWN) has gained 5.07% in the past 6 months and 13.12% year to date.
By the end of the second quarter of 2021, 11 hedge funds out of the 873 tracked by Insider Monkey held stakes in Northwest Natural Holding Company (NYSE: NWN) worth roughly $14.2 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $28.4 million.
2. Universal Corporation (NYSE: UVV)
Number of Hedge Fund Holders: 9
Dividend Yield: 6.3%
Number of Years of Consistent Dividend Increases: 50
Share Price as of August 24: $49.14
Universal Corporation (NYSE: UVV) is a Virginia-based tobacco company procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale. It ranks 2nd on our list of cheap dividend kings with over 2% yield.
In the fiscal first quarter of 2022, Universal Corporation (NYSE: UVV) had an EPS of $0.30. The company’s revenue was $350 million, up 10.8% year over year. Universal Corporation (NYSE: UVV) has gained 0.66% year to date and 8.1% in the past year.
By the end of the second quarter of 2021, 9 hedge funds out of the 873 tracked by Insider Monkey held stakes in Universal Corporation (NYSE: UVV) worth roughly $87 million. This is compared to 1o hedge funds in the previous quarter with a total stake value of approximately $93 million.
1. Altria Group, Inc. (NYSE: MO)
Number of Hedge Fund Holders: 47
Dividend Yield: 7.1%
Number of Years of Consistent Dividend Increases: 51
Share price as of August 24: $48.48
Altria Group, Inc. (NYSE: MO) is another tobacco company on our list of cheap dividend stocks with over 2% yield. It offers products such as cigarettes and cigars to consumers globally. The company ranks 1st on our list.
Stifel holds a Buy rating and $56 price target on shares of Altria Group, Inc. (NYSE: MO) as of this July.
In the second quarter of 2021, Altria Group, Inc. (NYSE: MO) had an EPS of $1.23, beating estimates by $0.06. The company’s revenue was $5.61 billion, up 10.90% year over year and beating estimates by $250.80 million. Altria Group, Inc. (NYSE: MO) has gained 7.73% in the past 6 months and 18.71% year to date.
By the end of the second quarter of 2021, 47 hedge funds out of the 873 tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE: MO) worth roughly $948 million. This is compared to 38 hedge funds in the previous quarter with a total stake value of approximately $1.1 billion.
Broyhill Asset Management, an investment management firm, mentioned Altria Group, Inc. (NYSE: MO) in its second-quarter 2021 investor letter. Here’s what they 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.”
See also 10 Best Gun Stocks to Invest In and 15 Very High Yield Dividend Stocks Worth Checking Out.
