Few things are more pleasant than seeing passive money grow in your brokerage account. Good news if you've been putting off investing because you can't afford it. Since brokerages no longer charge transaction costs, less than $100 can secure quarterly dividends from two legendary dividend payers.
Investors can earn 9.1% and 6.1% from Altria Group (NYSE: MO) and Pfizer (NYSE: PFE) at current pricing. That's far more than the S&P 500 average of 1.35%. An unusually high dividend yield usually indicates the market doesn't think a company can grow its payout. These two companies distinguish out because they offer high dividend yields upfront and may expand consistently in retirement.
Altria Group Altria Group sells America's top Marlboro brand. Last August, it boosted its dividend for the 58th time in 54 years. The 4.3% payment increase followed the company's aim to raise it by a mid-single-digit annual percentage.
Even though management plans to boost dividends, the stock yields 9.1%. The stock price is under pressure because investors fear more than dwindling combustible cigarette sales. They also worry about competition from an illegal market for e-vapor items that don't follow the FDA's taste ban.
Altria's 2023 Marlboro shipments declined 8.8%. The corporation compensated declining cigarette volume with premium brand price increases and growing non-combustible product sales. Revenue net of excise taxes declined 0.9% last year.
Altria's top line dropped, but cost cuts and a decreased share count raised adjusted earnings per share 2.3% last year, and more good news is coming. Altria bought NJOY, one of three FDA-approved e-cigarettes, last year. Increased FDA enforcement of the nicotine-based taste restriction could reduce illicit e-vapor market competition in 2024.
Pfizer Pfizer sold out its established drugs in 2020. It now has the most patent-protected new drugs in the pharmaceutical sector. The stock yields 6.1% at these prices
Pfizer has boosted dividends annually since 2009. Unfortunately, its dividend distribution raises have slowed in recent years. The company's payment rose 16.7% since 2020. Because COVID-19 product sales disappeared faster than expected, the stock has fallen 38% since 2023. Sales climbed 7% in 2023 without COVID-19 due to new product releases and indication extensions.
Many elements of pharmaceutical firms move in opposite directions. Last year, revenue from FDA-approved anti-inflammatory pill Xeljanz declined 5% to $1.7 billion. Sales of Vyndaqel, a 2019 rare heart disease medication, covered Xeljanz's losses.
Vyndaqel sales rose 36% to $3.3 billion in 2023, and other blockbuster medications may follow. A record nine new medications were approved by the FDA for Pfizer last year. Investors looking to boost their passive income should buy some stock today to hold for an indefinite period.
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