5 High Yield Dividend Champions

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

Number of Hedge Fund Holders: 47
Dividend Yield: 7.1%
Number of Years of Consistent Dividend Increases: 51

Altria Group, Inc. (NYSE: MO) is one of the largest tobacco companies in the world, selling cigarettes under the Marlboro and cigars under the Black & Mild brands. The company is based in Richmond, Virginia, and ranks 2nd on our list of high yield dividend champions.

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.

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.”