Here's How Many Shares of Altria You'd Need for $500 in Yearly Dividends
Key Points
Altria's annual dividend is $4.24.
The company is a Dividend King, with 56 consecutive years of increases.
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Tobacco giant Altria (NYSE: MO) has routinely held one of the highest dividend yields on the stock market. Its current yield is 7%, which is almost six times higher than the S&P 500 (SNPINDEX: ^GSPC) average. Even so, it's below Altria's 7.7% average over the past five years.
Altria's annual dividend is $4.24 per share ($1.06 quarterly), meaning you'd need to own 472 shares to receive $500 in annual dividend income. At the time of this writing, Altria's stock price is $58.72, meaning it would cost you $27,716 if you were starting from scratch with no shares.
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Altria's business has been affected by declining volume due to fewer U.S. adult smokers than in previous years. However, it has so far been able to offset much of this declining volume through its pricing power. It's not a long-term solution, but it buys Altria time while it hopefully comes up with a viable solution.
The good news
Altria has increased its annual dividend for 56 consecutive years, making it a Dividend King (a company with at least 50 consecutive years of increases). It aims for a payout ratio of around 80% of its adjusted earnings per share (EPS), and even with declining volume and stagnant revenue growth, it has stayed around that mark. That should be reassuring for investors who worry about Altria's dividend stability and its ability to keep the increases going.
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Stefon Walters 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.
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