5 High Yield Dividend Kings for 2022

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

Dividend Yield as of January 21: 7.15%

Number of Years of Dividend Increases: 51

Number of Hedge Fund Holders: 45

Altria Group, Inc. (NYSE:MO) is one of the largest producers of tobacco and cigarettes in the world, in addition to supplying cigars, wine, and moist smokeless tobacco products. Altria Group, Inc. (NYSE:MO) sells its tobacco products to wholesalers, distributors, and large retail organizations. 

On December 8, Altria Group, Inc. (NYSE:MO) declared a $0.90 per share quarterly dividend, in line with previous. The dividend was paid on January 10, for shareholders of record on December 23. Altria Group, Inc. (NYSE:MO) is one of the highest yielding dividend kings heading into 2022, offering a yield of 7.15%. 

BofA analyst Lisa Lewandowski downgraded Altria Group, Inc. (NYSE:MO) to Neutral from Buy with a price target of $50, down from $56. According to the analyst, Altria Group, Inc. (NYSE:MO) is likely to remain a “steady” earnings performer with limited input inflation and margin expansion, but her expectations of regulatory news flow may be an overhang on the stock in 2022. 

As of the third quarter of 2021, Harris Associates is the largest Altria Group, Inc. (NYSE:MO) stakeholder, with 5.1 million shares worth $232.6 million. Overall, 45 hedge funds were long Altria Group, Inc. (NYSE:MO) in Q3 2021, with stakes totaling $829.7 million. 

Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:

“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.”

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