5 Dividend Stocks For The Passive Income Investor

One way that investors can combat lower returns is to buy stocks are paying dividends. Finding companies that are raising dividends and have high yields is getting tougher to do in a market with a lot of low dividend payers. Lots of companies are holding onto cash and have yet to restore their dividends back to their 2008 levels. One industry that is full of good dividend companies is the tobacco industry. Investing in tobacco companies may not be popular with all investors but they are paying out some of the best dividends around.

5 Dividend Stocks

Here are five tobacco companies that are solid dividend stocks.

Altria Group (MO)

First on the list is the Altria Group. Altria is the largest tobacco company in the United States with a market cap of $56 billion dollars. Altria has been around for a long time as the company used to exist under its old name Phillip Morris Companies. The Altria Group has holding in both the tobacco and wine industry. The company is currently paying out a dividend of $1.52 per share and has a fat dividend yield of 5.7%.

Reynolds American (RAI)

Next up is Reynolds American which is the second largest tobacco company in the United States with the company selling an array of tobacco products including cigarettes, cigars, and nicotine gum.  The company is showing investors the cash with a dividend payout of $2.12 a share. Reynolds American has a dividend yield that is equal to 5.7%.

Lorillard (LO)

Lorillard is a large cap tobacco company that has been around for 250 years. The company is new to the market since it has only been publicly traded since 2008. Lorillard just misses the 5% dividend cut with its 4.9% yield. The tobacco company is paying investors a healthy $5.20 per share.

Philip Morris International (PM)

Philip Morris International is the largest seller of tobacco products outside of the United States. The company has a market cap of $124 billion dollars. Phillip Morris is paying investors $2.56 per share and has a solid yield of 3.7%.

British American Tobacco (BTI)

British American Tobacco is a UK based company and is the second largest supplier of tobacco products around the world. British American has been around for almost 110 years and has been a consistent dividend paying stock. The company has an incredible yield of 5.9% and an annual dividend payment of $5.21 per share.

As you can see the tobacco industry is full of quality dividend stocks for investors that are interested in generating passive income.

 

Comments

  1. avatar optionsdude says:

    I have been following Altria this spring as it made a nice run in 2011 thus far. These are some nice solid yields from companies that generate quite a bit of free cash flow. Nice summary.

  2. avatar dizzy7 says:

    The correct dividend yield for BTI is approximately 4.2% at the current stock price, not 5.9%. You apparently got your data from Yahoo Finance and they made the mistake (as they always do with companies that do not pay level dividends) of computing it as if all payments made during the year are the same.
    In the case of BTI, as with many non-US companies, they are not. The BTI spring dividend is typically more than double the amount of the fall dividend.

    Another item to take note of is that BTI owns 42% of RAI, so if you invest in BTI, you’re actually investing in both companies.

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