Every time a bullish market commentator says things are fine, you can almost count on the market going into a tailspin. The stark reality is we are stuck in a trading range that is printing lower highs and lower lows, and that is typical in a bear market. In addition, with the Federal Reserve locked in on raising interest rates 75 basis points this month before taking a break until September, the market downtrend is likely to stay in place the rest of 2022 and into next year as well.
So what is the plan? The best idea is to stay away from risky companies that make no money and are burning cash, and instead invest in dividend-paying companies that are dependable. Even with interest rates moving higher, they are still historically low. With inflation stripping bond yields to negative levels, dividend-paying stocks are still the way to go.
At 24/7 Wall St., we know how important dividend size, stability and growth are to growth and income investors that need a dependable stream of income. We often have written about the opportunities that the Dividend Aristocrats offer for long-term investors. These are the companies that meet the guidelines for inclusion and have raised their dividends every year for 25 consecutive years. In 2022, 66 stocks made the cut, and they remain top picks across Wall Street.
For those seeking even greater dividend dependability, investors may be drawn to the Dividend Kings. These are the 44 companies that have raised the dividends they pay to shareholders a stunning 50 consecutive years or longer. We screened the current Dividend Kings list for the seven highest yielding stocks, and we listed them in order of the biggest dividends. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.
While this gets sorted out, it is a good bet that Altria stock investors still will receive an 8.67% dividend. Deutsche Bank has a $46 target price, but the consensus target is even higher at $52.33. The shares closed on Friday at $41.52.
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