Canada markets closed

1 Dividend King to Buy on the Dip

Baystreet.ca

A dividend king is a stock that has achieved at least 50 consecutive years of dividend growth. These stocks are always attractive to investors who are seeking long-term stability and income.

However, they are even more appealing in dangerous economic times. Today I want to discuss a dividend king that is well-positioned to weather the stormy economic climate in 2020.

Altria Group (NYSE:MO) manufactures and sells cigarettes, smokeless products, and wine in the United States. So-called “sin stocks” are typically resilient during recessions.

Recently, Altria has also moved into the developing cannabis space and has a stake in Cronos Group. Often, these stocks are a prime target for investors looking for shelter from volatility.

Shares of Altria have dropped 25% in 2020 as of close on May 11.

Read:

The company released its first-quarter 2020 results on April 30. Net revenues increased 13% year-over-year to $6.35 billion and adjusted diluted earnings per share climbed 18.5% to $1.09.

Its growth was driven by smokable and oral tobacco products. Still, Altria elected to withdraw its 2020 guidance in response to the COVID-19 pandemic.

In its Q1 report, Altria reiterated that its dividend was a top priority. The stock last paid out a quarterly dividend of $0.84 per share. This represents a monster 9.2% yield. Shares are currently trading at the low end of its 52-week range.

Altria’s business should prove resilient in the face of economic headwinds, so investors may want to consider buying low in the middle of May.