Altria and AT&T Showcase Strong Dividends Amid Market Changes

Investors eyeing stable returns may find Altria Group and AT&T appealing as both companies report strong dividend yields and strategic shifts. Altria celebrates its 55th consecutive dividend increase, while AT&T shows signs of recovery with a solid stock price increase and focus on core operations.

Date: 12-10-2024

AI Rating: 7

The report highlights two companies, Altria (NYSE: MO) and AT&T (NYSE: T), as solid options for investors seeking reliable passive income through dividends. Both companies currently exhibit positive indicators that could affect stock prices.

Altria Group (MO)

Altria has raised its dividend for the 55th consecutive year, showcasing its commitment to returning value to shareholders. The current quarterly dividend stands at $1.02, resulting in a forward yield of approximately 8.1%. This is a strong indicator for income-seeking investors, particularly as Altria continues to hold a predominant market share in the tobacco sector despite declining smoking rates.

In the past quarter, Altria reported net earnings of over $5.9 billion and paid out $3.4 billion in dividends, demonstrating a healthy payout ratio, which reassures investors regarding dividend sustainability. Furthermore, the growth in NJOY product shipments (14.7%) and device shipments (80%) indicates potential for revenue increase, thus positively impacting future earnings and dividends.

AT&T (T)

AT&T has improved its financial positioning, with a stock price increase of over 26% this year. The company’s refocus on core telecommunications, following the divestiture of its DIRECTV stake, has yielded positive results. With a current dividend of $0.28 and an attractive yield of 5.1%, AT&T's payout ratio stands at just over 64%, indicating manageable debt levels and the potential for future increases. In its latest quarter, AT&T gained 1.6 million postpaid subscribers and saw increased average revenue per user (ARPU), which contributes to a steadier revenue stream.

Overall, both companies present investment opportunities, as Altria's strong dividends signal reliability, while AT&T's recovery and growth metrics indicate a positive trend that could enhance stock prices further.

Stocks: MO T