Want more passive income? These 2 stocks just declared dividend increases

A great thing about owning stock in a company that (at least occasionally) increases its dividend is that your passive income increases while you’re not doing anything at all.

With that in mind, let’s take a look at two long-standing companies that have declared dividend increases in recent days, Altria Band (MO -0.18%) and General Motors (GM 1.10%)and see how much more they remunerate their shareholders.

1. Altria Group

Altria is a longtime favorite of income investors who don’t care that the company’s main stock is cigarettes. Indeed, Altria has always spat out a high-yield dividend every quarter, which is maintained by regular increases (usually once a year). The 2022 version of this is a 4% increase to $0.94 per share.

The production costs of Altria’s traditional cigarette products are modest, and in the meantime the company can charge high prices for them because they are addictive. The company’s struggling e-cigarette brand, Juul, is a different story – it could even be phased out of the product line entirely if a recent suspension of the Food and Drug Administration (FDA) ban doesn’t lead to a pure and simple reversal. In addition, the continued decline of the tobacco market is worrying.

In its most recent quarter, the company suffered a nearly 6% year-over-year decline in net revenue and a nearly 60% drop in net revenue. The rest of the year should be better as Altria expects annual earnings per share growth of 4% to 7% compared to 2021. It did not provide any indication of earnings; collectively, analysts expect a slight decline (1%) year-over-year.

Altria has always been a great dividend stock for those who don’t mind investing in sin stocks. The question is whether it can continue to be a success in an industry that is now a shadow of its former self. So far, it has managed to weather the storm without serious erosion of its fundamentals; we’ll see if he can continue to do so.

At the most recent closing price, Altria’s upcoming dividend would yield a whopping 8.4%. The first payment of the new amount will take place on October 11, to investors registered on September 15.

2. General Engines

What Altria is to cigarettes, General Motors is to automobiles. Young upstarts like You’re here and Rivian might grab headlines with their electric vehicles (EVs), but the former incumbent automaker continues to fight hard and hang in there.

One way to do this is to increase the ultimate dividend: reinstate its payment. From exactly $0.00 in the previous quarter — General Motors last paid a distribution in March 2020 — the company is moving to a quarterly dividend of $0.09 per share. On top of that, it aims to put a bit of a zoom on its stock by updating its share buyback program; the $3.3 billion remaining under authorization was increased to $5 billion.

In announcing the return of the dividend and increased buyback, General Motors said the assertive expansion of its electric vehicle offerings and efforts in manufacturing modular batteries have left room for such moves that appeal to investors. . CEO Mary Barra said, “Progress on these key strategic initiatives has improved our visibility and reinforced confidence in our ability to fund growth while returning capital to shareholders.

Although the usual corporate hype, we always win, underlies these words, they are generally accurate. General Motors is well positioned these days to compete in the brave new world of electric vehicles – although as a mass producer with a large assortment of customers it will likely never have the verve and cachet of Tesla and of its electric vehicle designer peers. . It is well on its way in this segment, having developed a unique manufacturing platform (Ultium) which should give it the ability to manufacture a wide range of electric vehicles targeting many consumer segments.

General Motors’ reinstated dividend will be paid Sept. 15 to investors of record as of Aug. 31, and it yields 0.9% on the current share price.

Eric Volkman has no position in the stocks mentioned. The Motley Fool holds positions and recommends Tesla. The Motley Fool has a disclosure policy.