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Tags: dividend king | retirement income | altria | 3m | leggett andplatt

Bob Ciura: 3 Dividend Kings With Yields Over 5%

Bob Ciura: 3 Dividend Kings With Yields Over 5%

Bob Ciura By Thursday, 12 January 2023 06:28 AM EST Current | Bio | Archive

Investors looking for quality dividend stocks can start with the Dividend Kings, a group of just 48 stocks that have increased their dividends for at least 50 consecutive years.

The Dividend Kings are also appealing for retirees because of their ability to withstand recessions. Only companies that can continue to raise their dividends through even the worst recessions make to become Dividend Kings.

This article will discuss 3 Dividend Kings that can raise dividends even in a recession, and also have high yields above 5%.

Altria Group (MO)

Altria Group is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. which dominates the market with over 40% retail market share in the United States. The company also produces a number of other non-smokeable brands, including Skoal, Copenhagen, and more. Altria has also amassed equity investments in companies that manufacture adjacent products.

Altria has a 10% ownership stake in global beer giant Anheuser-Busch InBev, in addition to large stakes in Juul, a vaping products manufacturer and distributor, as well as cannabis company Cronos Group (CRON).

On October 27th, 2022, Altria reported third-quarter results. Q3 Non-GAAP EPS of $1.28 missed analyst expectations by $0.02. Revenue of $5.41B (-2.2% Y/Y) missed analyst expectations by $180M. Management narrowed its full-year 2022 guidance and now expects to deliver adjusted diluted EPS in a range of $4.81 to $4.89, representing a growth rate of 4.5% to 6% from a base of $4.61 in 2021.

Altria’s dividend policy is to distribute approximately 80% of its annual adjusted earnings-per-share. The company generates enough cash flow to pay substantial dividends, and also repurchase stock. Shares currently yield 8.2%.

3M Company (MMM)

3M is an industrial manufacturer that sells more than 60,000 products that are used every day in homes, hospitals, office buildings and schools around the world. 3M stock has a 5% yield.

In the third quarter, 3M’s revenue declined 3.8% year-over-year to $8.6 billion. Adjusted earnings-per-share of $2.69 beat by $0.10. The company reported 2% organic sales growth for the quarter. Operating cash flow of $1.5 billion declined 18% year-over-year. However, the company managed to return $1 billion to shareholders through dividends and share repurchases.

3M is not recession proof, but the company has proven itself to be resilient during the difficult times in the economic cycle. While dividend growth has outpaced earnings growth in recent years, 3M’s dividend track record is virtually second to none. When the next recession occurs, it is likely that growth will slow, though we don’t feel the dividend is in any danger of being cut.

Leggett & Platt (LEG)

Leggett & Platt is an engineered products manufacturer. The company’s products include furniture, bedding components, store fixtures, die castings, and industrial products. It has increased its dividend for 51 consecutive years. The stock has a 5.4% current yield.

2022 was a challenging year for Leggett & Platt, as global manufacturers struggled with inflation and the strong U.S. dollar. Leggett & Platt reported its third quarter earnings results on October 31. Revenue of $1.29 billion represented a 2% decline compared to the prior year’s quarter. Revenues were in-line with the consensus estimate. Earnings-per-share of $0.52 during the third quarter, was a sequential decline from $0.70 per share in the previous quarter.

The company is forecasting revenues of $5.1 billion to $5.2 billion, implying growth of around 1% versus the previous year. The earnings-per-share guidance range has been set at $2.30 to $2.45 for 2022. At the midpoint, EPS is set to decline roughly 20% from 2021. However, the company remains profitable, which allows it to sustain its dividend.
Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.

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Investors looking for quality dividend stocks can start with the Dividend Kings, a group of just 48 stocks that have increased their dividends for at least 50 consecutive years.
dividend king, retirement income, altria, 3m, leggett andplatt
Thursday, 12 January 2023 06:28 AM
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