The Dividend Kings have increased their dividends annually for at least 50 consecutive years. This is no easy feat, and only companies with strong business models that perform well in both good and bad markets can achieve Dividend King status. This is why income investors are so fond of the Dividend Kings.
If you are also into high yields, you might want to check out Altria (Mo 0.21%), Universal Corporation (uvv 0.24%)And kimberly clarke (KMB 0.69%) Today, since they are the three highest dividend yielding kings. Here’s a quick look at each.
1. Altria has problems, but also reliable cash flow
Altria’s dividend yield is 6.3%, which is much higher than the roughly 1.1% it is paying. S&P 500 Index (^GSPC 0.11%). dividend king The primary product is cigarettes, which has both a positive and a negative.
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The downside is that cigarette demand has been steadily declining in the company’s core North American market. On the positive side, Altria is able to raise prices because smokers are not particularly price-sensitive. This has allowed the company, which owns the industry-leading Marlboro brand, to consistently raise its dividend despite falling demand. The cash flow it generates is so strong that management has even been able to experiment with new products it hopes will one day replace cigarettes.
That effort made some big mistakes, resulting in billions of dollars being written off. However, the resilience of the dividend reflects how reliable a company’s business is over time. Still, Altria is only suitable for more aggressive investors given the headwinds in its most important business.
today’s change
(-0.21%) $-0.14
current price
$67.32
key data points
market cap
$113B
day limit
$66.90 -$67.92
52wk range
$54.70 -$70.51
volume
447K
average volume
10m
gross margin
75.86%
dividend yield
6.23%
2. Universal Corporation sells tobacco, not cigarettes
universal is second tobacco company And offers an impressive 6.1% dividend yield. However, there are two important differences here relative to Altria. For starters, Universal operates on a global scale while Altria does not. Second, Universal does not sell cigarettes; It sells tobacco to companies that make cigarettes and other smokable products. Demand for cigarettes outside North America is still quite strong, so its business is probably in better shape than Altria.
That said, Universal is a sin stock. If it’s not a good fit for you, you shouldn’t own it, no matter how high its yield. It’s also important to note that tobacco is a commodity, so company revenues and earnings can be a bit volatile from year to year. While most investors will probably want to avoid Universal, if you’re considering Altria but are concerned about declining cigarette demand in North America it may be a good fit for you.
today’s change
(-0.24%) $-0.13
current price
$53.43
key data points
market cap
$1.3B
day limit
$53.12 -$53.54
52wk range
$49.96 -$67.33
volume
165K
average volume
207K
gross margin
18.09%
dividend yield
6.12%
3. Kimberly Clark is making a big change
kimberly clarke is a big Consumer Staples Company Which makes paper products like toilet paper. People buy the company’s products in both good economies and bad economies, so its business is extremely resilient to economic and market adverse conditions. Thus it has increased its dividend annually for more than 50 years. But paper products in the consumer products sector are not particularly development-oriented.
This is why Kimberly Clark agreed to buy kenview (KVUE 0.37%)Which manufactures health care and personal care products. Kenview has reputable brands like Tylenol, Band-Aid, and Listerine. Assuming the deal is completed as planned, Kimberly Clark will become a more growth-oriented business and compete more directly with peer Procter & Gamble (PG 1.02%)one of The world’s largest consumer products companies. This is an expensive acquisition, and there are physical integration risks to consider, which is why Kimberly Clark’s yield is 5.2%.
today’s change
(-0.69%) $-0.68
current price
$97.28
key data points
market cap
$32B
day limit
$96.94 -$98.67
52wk range
$92.42 -$144.31
volume
3.3M
average volume
5.7M
gross margin
35.67%
dividend yield
5.20%
However, more aggressive investors willing to take on more risk may find that Kimberly Clark’s business transformation is a winning move for the company. Just go about this investment with a long-term view, as it may take a few years before the acquisition actually starts paying off.
Three Maybe from the Dividend Kings List
Risky investments often have high returns, and that’s exactly what investors will get with Altria, Universal and Kimberly Clark. They are all dividend kings, and that may be enough for you to be willing to accept the business risks inherent in each stock. However, conservative investors would probably be better off avoiding all three, no matter how attractive their high dividend yields might be today.