Tobacco company and Dividend King Altria Group Inc. (NYSE: MO) has a 6.6% yield, among the highest of S&P 500 stocks. Its shares recently hit a six-year high, which is rare among corporations with big payouts. A day ago, its stock rose 4.8% to $62.61 a share. It has not traded there since November 2018.
Wall St. Key Points:
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Altria Group Inc. (NYSE: MO) stock hit a six-year high because its earnings were strong.
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This Dividend King also has among the highest yields of S&P 500 stocks.
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Altria stock rose because its earnings were strong for its most recent quarter and handily beat Wall Street estimates. Its relatively new tobacco pouch products did well enough to mostly offset a drop in its legacy cigarette business.
The increase in the stock was unusual, based on what drives most stock prices higher. Revenue fell 2% to $6.1 billion. However, adjusted diluted earnings per share rose 8% to $1.44. Perhaps most importantly, Altria said its forecast for future earnings improved: “We are raising the lower-end of our 2025 full-year guidance and now expect to deliver adjusted diluted EPS in a range of $5.35 to $5.45. This range represents a growth rate of 3.0% to 5.0% from a base of $5.19 in 2024.”
Altria’s earnings continue to be driven by the Marlboro brand, which accounts for 90% of its cigarette sales. Its oral tobacco product sales are dominated by Copenhagen, which makes up 48% of the division’s revenue.
Altria also said it had distributed $32 billion in dividends to shareholders between 2020 and 2024. Altria has paid a dividend for six decades and has increased that dividend 56 years in a row.
Altria changed its name from Philip Morris in 2003. It owned a majority stake in Kraft Foods until 2008. There is a theory that Altria wanted to disguise the fact that it was a tobacco company, and thus the name change. Tobacco is the number one cause of preventable death in the United States and kills approximately 480,000 Americans per year, according to the American Lung Association.
Altria investors have decided to look the other way in terms of its products. In exchange, they get a 6.6% payout.
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The post This Dividend King’s Stock Just Soared to a 6-Year High appeared first on 24/7 Wall St..
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Author: Douglas A. McIntyre
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