Jefferies Predicts 3 Rate Cuts: 4 High-Yield Dividend Kings to Front-Run the Fed

Investors love dividend stocks, especially those with high yields, because they provide a substantial income stream and offer significant total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

At 24/7 Wall St., we consistently emphasize the potential of total return to our readers. It is one of the most effective ways to enhance the prospects of overall investing success. Once again, total return refers to the collective increase in a stock’s value, including dividends. With the potential for three Federal Reserve interest rate cuts this year, the highest-yielding Dividend Kings are the perfect stocks to buy as the Fed’s rate-cutting cycle begins.

We have been covering Jefferies research for almost 15 years, and the firm has consistently delivered top-notch market calls and outstanding sector and individual stock recommendations. Its economic team, like many across Wall Street, believes that the impact, positive or negative, from the newly installed tariffs has likely not been felt yet. The aforementioned Tom Simons has recently updated his U.S. economic outlook and believes that uncertainty over the economy and financial markets as a theme is starting to wane. This was noted in a recent report:

The passage of the One Big Beautiful Bill leads Tom to think it’s time to retire this theme. The GDP data is going to continue to yo-yo in the coming quarters, but the overall trend looks more solid than not. He is watching for signs that the labor market may be souring more quickly than the headline Non-Farm Payroll and unemployment rate data would suggest, and continues to expect that the Fed will cut three times this year, starting in September. He noted that while many Fed officials have commented that they are still unsure about the impact of tariffs on inflation and thus wary about cutting rates too soon, the strong data that was allowing them to be “patient” is eroding.

One thing is for sure: dropping the federal funds rate from its median current of 4.33% to 3.58% could be a massive tailwind for quality dividend stocks, and the highest-yielding Dividend Kings are at the top of our list. The Dividend Kings are the 55 companies that have raised their dividends for 50 years or more, a testament to their dependability and reliability. Those are two “must-have” items for investors who rely on passive income to boost their overall revenue. Unlike the Dividend Aristocrats, the Dividend Kings do not have to be members of the S&P 500.

Why do we cover the Dividend Kings?

Companies that have raised their dividends for shareholders for 50 years or longer are the kind of investments that passive income investors need to own. Dependability is crucial for individuals seeking to increase their annual income through dividend stock investments.

Altria

This is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. This tobacco company offers value investors a compelling entry point, along with a generous dividend yield, and has seen its share price increase by over 11% this year. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• E-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev S.A. (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Stifel has a Buy rating with a $63 target price.

Universal

This somewhat off-the-radar company is another one of the world’s leading tobacco merchants. Up almost 3% in 2025, Universal Corp. (NYSE: UVV) has reported strong demand and has been in business for almost 150 years. Universal processes and supplies leaf tobacco and plant-based ingredients worldwide.

The company operates through two segments:

• Tobacco Operations
• Ingredients Operations

It procures, finances, processes, packs, stores, and ships leaf tobacco for sale to manufacturers of consumer tobacco products.

The company:

• Contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes
• Dark air-cured tobaccos manufacture naturally wrapped cigars, cigarillos, smokeless, and pipe tobacco products

Universal also provides value-added services, including:

• Blending, chemical, and physical tobacco testing
• Service cutting for various manufacturers
• Manufacturing reconstituted leaf tobacco
• Just-in-time inventory management services
• Electronic nicotine delivery systems
• Customer smoke testing services

Canadian Utilities

Canadian Utilities Ltd. (CDUAF) is a Canada-based worldwide organization of companies with around $22 billion in assets and paying an outstanding 4.83% dividend. The stock is up almost 19% this year and resides in a highly stable sector; this company is a steal at its current trading levels. The company operates in the electricity, natural gas, renewable energy, pipelines, liquids, and retail energy sectors in Canada, Australia, and elsewhere.

It operates through three segments:

• ATCO Energy Systems
• ATCO EnPower
• Corporate & Other segments

The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in:

• Northern and central east Alberta
• The Yukon
• The Northwest Territories
• The Lloydminster area of Saskatchewan

This segment also provides integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility near Fort Saskatchewan, Alberta, in Canada.

The ATCO EnPower segment provides:

• Hydro
• Solar
• Wind
• Natural gas electricity generation
• Natural gas storage
• Industrial water solutions
• Clean fuels, including hydrogen, carbon capture, and underground storage projects; and related infrastructure development in Alberta, the Yukon, the Northwest Territories, Australia, Ontario, Mexico, and Chile

The Corporate & Other segment retails electricity and natural gas and provides whole-home solutions.

Northwest Natural Holding

This small-cap company provides natural gas service to approximately 2.0 million people in more than 140 communities. This off-the-radar utility stock suits concerned conservative investors, pays a dependable dividend, and has risen by over 9% this year. Northwest Natural Holding Co. (NYSE: NWN), through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington.

The company also operates:

• 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers
• Offers natural gas asset management services
• Operates an appliance retail center

In addition, it engages in gas storage, water, non-regulated renewable natural gas, and other investments and activities.

The company provides natural gas service through approximately:

• 786,000 meters in Oregon and southwest Washington
• Water services to about 80,000 people through about 33,000 water and wastewater connections in the Pacific Northwest and Texas

I’m Buying Four Incredible Beaten-Down Dividend Aristocrats Hand-Over-Fist

 

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