Key Points
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A nearly 6% dividend yield is incredibly strong compared to most other dividend stocks.
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Companies that have paid and raised their dividends for 50 consecutive years are called Dividend Kings and have a strong financial incentive not to break this trend.
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When assessing dividend stocks, investors need to make sure dividends are covered by earnings and free cash flow.
- 10 stocks we like better than Altria Group ›
The stock market has been a difficult beast to understand. While the market has been on a multiyear bull run, investors are on edge, as numerous warning signs have emerged that suggest it might be time to head to the sidelines.
However, the market has so far shrugged these off and continued to move higher despite significant volatility.
Not all investors may want to lean in at such an uncertain time. Still, leaving money in cash and trying to time the market has never been a winning strategy. Instead, investors may want to seek more reliable dividend stocks, which can generate steady passive income annually.
Here are two dividend stocks yielding at least 5.9% and that have annually increased their dividends for at least 50 years.
Altria Group — 5.9%
Altria Group (NYSE: MO) is one of the leading tobacco companies in the world. It also owns many smoke-free tobacco brands, as well as investments in cannabis. Some of its notable brands include Marlboro, Copenhagen, and on! nicotine pouches.
The company’s long-standing business also allowed it to become a Dividend King, a company that has paid and raised its annual dividend for at least 50 years. Only 57 companies in the market can boast such a feat.
Altria is currently on pace to pay $4.24 in dividends, excluding any future increases. Meanwhile, management is guiding for $5.56 to $5.72 in adjusted diluted earnings per share, giving the company about a 75% dividend payout ratio.
Altria also has a free-cash-flow yield of about 7.13%, which also covers the annual dividend, so the company clearly has room to raise it this year.
Altria stock has also enjoyed a strong year, with shares up nearly 26% (as of July 13). In the first quarter of the year, Altria managed to grow revenue net of excise taxes by 5.2%, despite smokeable product shipments being down 2.3% year over year. Operating margins expanded 1.8% year over year to 65%, largely thanks to pricing adjustments.
Meanwhile, the company continued to see revenue growth in its oral tobacco division, despite year-over-year margin contraction. Low- to mid-single-digit-percentage projected earnings growth in 2027 should also continue to support modest increases in the dividend moving forward.
Universal Corp — 6.5%
Another Dividend King, Universal Corp (NYSE: UVV) has paid and raised its annual dividend for 56 consecutive years. Universal Corp operates in a sector similar to Altria’s, serving as the leading global leaf tobacco supplier to companies that make consumer tobacco products.
The company also has an ingredients division that produces specialty plant-based ingredients, such as fruits, vegetables, and flavorings, used by food and beverage companies in their products. The stock took a hit in early February, as the company’s quarterly results revealed excess supply in the leaf tobacco business, and the ingredients segment also experienced softer demand and pressure due to tariffs.
In its most recent fiscal 2026 fourth quarter, which ended on March 31 of this year, the company did manage to grow revenue 2% year over year but struggled due to a nonrecurring, noncash goodwill charge and some tobacco investor write-downs.
Still, the company increased its quarterly dividend by a penny in May for an annual dividend of $3.32 per share. Analysts covering the stock project adjusted earnings per share of $4.30 in its current fiscal year. Free cash flow in Universal’s last fiscal year nearly covered the dividend, despite the significant goodwill charge. The company should be able to pay and raise its annual dividend going forward.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
