5 Safe Dividend Stocks With Over 5% Yield

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

Dividend Yield as of June 21: 7.95%

Altria Group, Inc. (NYSE:MO) is an American manufacturing company that specializes in the production of tobacco, cigarettes, and other related products. In Q1 2022, the company reported an EPS of $1.12, which beat market estimates by $0.03. For FY22, the company expects its EPS to fall in the range of $4.79 to $4.93, which implies a growth rate of 4% to 7% from 2021.

Altria Group, Inc. (NYSE:MO) currently offers a quarterly payout of $0.90 per share, with a dividend yield of 7.95%, as of June 21. The company has raised its dividends 56 times in the past 52 years, which makes it one of the safest dividend stocks. In June, Morgan Stanley appreciated the long-term growth of Altria Group, Inc. (NYSE:MO), but expressed concerns about the ‘growing competitive environment’. Given this, the firm downgraded the stock to Underweight, with a $50 price target.

The number of hedge funds tracked by Insider Monkey owning stakes in Altria Group, Inc. (NYSE:MO) grew to 47 in Q1 2022, from 39 in the previous quarter. The collective value of these stakes is roughly $2 billion, as compared with $1.05 billion worth of stakes held by hedge funds in Q4 2021.

Broyhill Asset Management also mentioned Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter. Here is what the firm had to say:

“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.”