Investing

With Rates Still Rising, 7 Highest-Yielding Dividend Kings May Be the Best 2023 Stock Ideas

While the latest consumer price index numbers came in right where Wall Street estimates were set, prices in December still rose 6.5% year over year. That is much better than November’s 7.1%, but it is still way above the Federal Reserve’s 2% target. Stocks rallied on the print, as the CPI saw the first monthly decline since December of 2020. Though some investors with itchy trigger fingers are ready to dive in, with earnings coming in a big way next week, slow and steady may be the route to go.

For those who remain nervous about the economy and the future, we have written often 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 2023, 65 stocks made the cut, and most remain top picks across Wall Street.

Investors seeking even greater dividend dependability may be drawn to the 2023 Dividend Kings. These are the 48 companies that have raised the dividends they pay to shareholders a stunning 50 consecutive years in a row or more. We screened the list looking for safe stocks that are Buy rated on Wall Street and found seven that look like great ideas now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Altria

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 March 2008, it spun off its international cigarette business. In December 2018 it acquired 35% of Juul Labs, but the stock was pounded last summer when the FDA announced a ban on all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is too focused on selling its nicotine products to high-schoolers. A court and the FDA 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.

Back in the fall, the company, which at the height of its popularity dominated the market with its sweet flavors, agreed to pay $438.5 million in a settlement with 33 states and one territory over marketing its Juul product to teens. Altria announced recently that it is looking to end its noncompete agreement with Juul to compete more aggressively in the vape space on its own.

While this continues to get sorted out, it is a good bet that Altria stock investors will still receive a giant 8.09% dividend. Deutsche Bank’s target price is $46, and the consensus target is even higher at $49.07. The shares closed on Thursday at $45.40.

Coca-Cola

This remains a top Warren Buffet holding, as he owns 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.

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