Hello, YieldAlley readers! In this issue:

🫧 Is It a Bubble? (Howard Marks)

💭 End of ‘The Berkshire Way’? (CNBC)

🚗 Trump gives Elon Musk a win over a longtime foe (CNN)

💰 401(k)s Are Minting a Generation of ‘Moderate Millionaires’ (WSJ)

🏥 Millions of Americans could see health plan costs double as ACA credits vanish (CBS)

December marks a time when income-focused investors reassess their portfolios and look for opportunities to secure reliable cash flows heading into the new year. With market volatility creating pockets of value across different sectors, several established dividend payers have become more attractive, particularly those that recently announced dividend increases.

Two companies stand out this month for having just raised their dividend payouts, demonstrating management confidence in their business prospects and commitment to returning cash to shareholders. A third presents an intriguing value opportunity despite lacking recent dividend growth.

Philip Morris International: A Transformed Business Model

Philip Morris International has successfully executed one of the most remarkable business transformations in recent corporate history, systematically shifting from traditional combustible cigarettes toward reduced-risk products. Its flagship Iqos heat-not-burn device has gained traction globally, particularly in Europe and Asia.

In September 2025, Philip Morris raised its quarterly dividend by 8.9% to an annualized rate of $5.88 per share, marking 18 consecutive years of dividend growth since becoming a public company in 2008. The company's reduced-risk products now represent a meaningful and growing portion of total revenue. The acquisition of Swedish Match brought Zyn nicotine pouches into the portfolio, which have experienced explosive growth in the US market as a high-margin smoke-free alternative.

The stock trades at reasonable multiples relative to its cash generation capabilities. The dividend yield is approximately 3.9%, providing immediate income while investors wait for the longer-term growth story to unfold.

Unilever: Recovery Potential Under New Leadership

Unilever generates roughly 60% of its sales outside North America and Europe, providing substantial exposure to faster-growing emerging markets. Its global divisions house consumer brands used daily across beauty and wellbeing, personal care, and nutrition.

The company had become increasingly bureaucratic over the prior decade, but Fernando Fernandez assumed the CEO role in March 2025 and has focused on reinvigorating growth. Early evidence of a turnaround has emerged through upgraded executive talent and a renewed emphasis on investing behind Unilever's top 30 power brands rather than spreading resources too thin.

Recent quarterly dividend increases signal management's confidence in the business stabilization efforts. The dividend yield is approximately 3.5%. While Unilever has only one year of consecutive dividend growth following a period of flat dividends, the company has a long history as a reliable dividend payer with strong dividend safety metrics. The stock's substantial international exposure provides natural diversification benefits for US-based investors.

Comcast: Value Hidden Behind Near-Term Challenges

Comcast's broadband business accounts for the majority of cash flow generation, but competition has intensified significantly. Fixed wireless offerings from mobile carriers and fiber overbuilders have pressured subscriber growth, resulting in actual broadband subscriber declines.

Management has responded by simplifying pricing plans and, in some cases, lowering prices to address market share losses. These are difficult but necessary steps to stabilize what remains a fundamentally attractive business. Despite competitive pressures, Comcast still operates one of the largest and most advanced networks in the country.

In January 2025, Comcast increased its dividend by 6.5% to $1.32 per share annually, marking 18 consecutive years of dividend increases. The stock has sold off considerably, pushing the dividend yield to approximately 4.8%. Beyond broadband, valuable assets including NBCUniversal's content production capabilities and theme parks generate strong cash flows. The company maintains financial flexibility to sustain its dividend while addressing competitive challenges.

Balancing Yield and Quality

These three stocks illustrate different aspects of dividend investing. Philip Morris offers solid current yield and growth potential as reduced-risk products gain market share globally. Unilever provides international diversification and the possibility of accelerating growth under new leadership. Comcast presents a higher-yield opportunity tied to management's ability to navigate competitive challenges. The common thread is sustainable cash generation. Each company produces substantial free cash flow supporting dividend payments while allowing for business investment. For income-focused investors, December presents an opportunity to add these positions while valuations remain reasonable.

Government Money Market Funds (7-Day Yields)

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