In the best combination of tobacco 'n' food news since Homer Simpson's tomacco, today AltriaGroup
Food manufacturer Kraft increased its dividend by 14% to nearly $0.20 per share. The yield now comes to 2.6%; not nearly as tasty, but better than bupkis.
Although dividend stocks have enjoyed a bit of retro chic over the past few years, you suspect that many investors still look on any stock that pays out as a stodgy issue, fit only for dodgy old aunts who keep too many cats and smell like a hallway in a hospital.
Remember what happened at ARM Holdings
Just a guess, but leaders such as those two have plenty of profitable times ahead of them. And when companies produce copious free cash flow -- such as Altria's $8 billion last year or Kraft's $2.9 billion -- there's nothing wrong with getting paid to invest while waiting for growth and capital appreciation. In fact, you should expect it. Keep in mind, upwards of 40% of the S&P 500's historical return is owed to dividends.
Our own dividend diva Mathew Emmert, whose Income Investor celebrates its one-year anniversary today, has pegged several market beaters such as Annaly Mortgage
All this verbiage comes to this: Sometimes the best investing ideas are exactly the kinds of boring, everyday companies that no longer take part in the Street's weekly popularity contests. When they'll pay you well to hold them, your portfolio will probably thank you. It's one way to try to make millions slowly.
For more Foolishness on dividends:
- What can closed-end funds do for your income?
- Dividend aside, ARM Holdings has some explaining to do.
- Altria's in the money.