2 Stocks With Dividend Yields of At Least 5.9% That Have Also Raised Their Annual Dividends for At Least 50 Years

The article highlights dividend durability with two “Dividend Kings” yielding ≥5.9%: Altria (MO) at ~5.9% and Universal Corp (UVV) at ~6.5%. For Altria, the annual dividend is expected to be $4.24 (excluding increases) with adjusted diluted EPS guidance of $5.56–$5.72 (~75% payout ratio) and a free-cash-flow yield ~7.13%, while shares are up ~26% YTD (as of July 13). Universal increased its quarterly dividend by $0.01 (annual $3.32) after a mixed fiscal 2026 Q4 (revenue +2% YoY) impacted by a goodwill charge and weaker demand tied to tariffs, but FCF “nearly covered” the dividend.

Analysis

The market implication is less about absolute yield and more about yield quality. MO can trade like a quasi-bond proxy so long as free cash flow stays comfortably ahead of the dividend, but that support does not automatically translate into multiple expansion; the equity still faces a slow-burn volume decline and policy overhang that can cap upside once the income crowd has bought in.

UVV looks materially weaker on a risk-adjusted basis because its balance sheet and earnings are more exposed to inventory swings, customer concentration, and pricing power pressure in a softer leaf market. If raw tobacco costs stay weak, that is actually a net input benefit for downstream manufacturers like PM and MO, while UVV bears the margin compression from excess supply and limited ability to pass through weaker demand.

Contrarian view: the consensus is treating high yield as synonymous with safety, but in tobacco that can be a sign of a maturing or shrinking franchise rather than durable compounding. The real question is not whether the dividend is covered today, but whether coverage can keep pace with declining cigarettes, higher excise risk, and a potentially less generous capital market if rates stop falling.

For the next 1-3 months, this is mostly a factor trade, not a fundamental rerate story. A cleaner signal would be next earnings showing whether MO can keep payout coverage near current levels without leaning on price increases; for UVV, the tell is whether inventory normalization improves cash conversion or forces another round of cautious guidance.

Key Decisions for Investors

• Long MO on pullbacks for carry, but keep sizing modest; the setup supports income defense more than multiple expansion. Falsify if payout coverage moves above ~80% or management softens dividend-growth language on the next print.
• Short UVV or avoid owning it until leaf supply normalizes; the stock is a higher-risk yield vehicle with weaker earnings quality. Best expressed over 1-3 months if management commentary still points to excess supply and tariff pressure.
• Pair trade: long MO / short UVV to isolate dividend-quality dispersion. Target is a modest 5-10% relative outperformance over 1-3 months; thesis breaks if UVV shows a sharp working-capital release and margin rebound.
• Watch PM and BTI as secondary beneficiaries if income flows rotate into tobacco defensives; they should capture the same “bond proxy” bid with better global pricing power. Use any MO strength to prefer the higher-quality global names if you want lower regulatory concentration.