2.9% Core Inflation Fuels Investor Shift to 5%+ Yielding Dividend Aristocrats in Packaging Tobacco REITs

Amid persistent inflationary pressures, investors are turning to dividend aristocrats—companies with a history of consistent dividend growth—as a potential hedge against rising prices. The Bureau of Labor Statistics reported a 2.9% annual core inflation rate in June 2025, above the Federal Reserve’s 2% target. Three companies, Amcor PLC, Universal Corporation, and Realty Income Corp., stand out with dividend yields exceeding 5%, offering a combination of stability and long-term growth potential.

Amcor PLC (NYSE: AMCR), a Swiss-based packaging giant, has a 5.38% dividend yield, distributing 12.75 cents per share quarterly. The company recently completed a merger with Berry Global, projecting over $3 billion in annual cash flow by fiscal 2028. In Q1 2025, Amcor reported a 1% year-over-year increase in net sales to $2.6 billion, with net income rising to $197 million. Analysts remain cautiously optimistic, with nine recommending a buy and seven a hold, while the average price target of $11.23 suggests potential upside from its current $9.58 price.

Universal Corporation (NYSE: UVV) offers a 5.99% dividend yield, paying 82 cents per share quarterly. As a global tobacco supplier, Universal has expanded its operating income from $140 million in fiscal 2020 to $240 million in 2025, despite a 10% decline in cigarette production. The company’s operating margin held steady at 7.9% in 2025, down marginally from 8.1% in 2024. UVV’s stock has risen 6% in the last three months to $54.77, with an average price target of $59 per share.

Realty Income Corp. (NYSE: O), a real estate investment trust (REIT), delivers a 5.71% yield, distributing 26 cents per share quarterly. The REIT’s $80 billion enterprise value and $5.05 billion in annualized base rent across 15,000 commercial properties highlight its scale. Projected 2025 results include over 98% occupancy and adjusted funds from operations (AFFO) per share between $4.22 and $4.28. At $56.45, O’s stock has an average price target of $61.34, reflecting confidence in its long-term performance.

The three companies represent diverse sectors—packaging, tobacco, and real estate—each demonstrating resilience in their respective markets. Amcor benefits from urbanization trends driving demand for packaged goods, Universal leverages its high-margin agricultural supply chain, and Realty Income capitalizes on real estate’s inherent stability. Analyst price targets for all three suggest optimism, though investors should note that projections are forward-looking and may not reflect current earnings.

While the Fed’s inflation target remains unmet, these dividend aristocrats offer a blend of income generation and capital preservation. Their ability to sustain and grow dividends despite macroeconomic challenges underscores their appeal in an inflationary environment. However, investors are advised to conduct independent due diligence, as the companies’ future performance depends on factors such as commodity prices, regulatory shifts, and market demand.