Not many investors have heard of Altria Group Inc. (NYSE: MO). However, the company’s engine is one of the world’s most famous brands, Marlboro. The stock has a forward yield of 7%. It is very likely to keep its current dividend or perhaps raise it. It has raised that dividend 56 years in a row. Altria has strong cash flow and an ironclad balance sheet.
Altria has had a good run. It is up 30% this year, compared to a 13% advance for the S&P 500. . The stock has changed hands over the past 52 weeks between $61.26 and $45.76 a share. It trades near $60 today.
Altria has solid earnings, an admirable balance sheet, and that almost unprecedented run of dividend payments. In the first quarter, Altria’s revenue fell 5% to $5.3 billion. However, adjusted EPS rose 6% to $1.23 a share. “Our highly profitable traditional tobacco businesses performed well in a challenging environment in the first quarter,” said Billy Gifford, Altria’s Chief Executive Officer. The company also reaffirmed solid guidance
At the end of 2024, Altria had $12.8 billion of cash and cash equivalents and long-term investments. It also raised its 2025 guidance. And it has raised its dividend every year for the last 20 years.
Almost all of Altria’s revenue comes from cigarettes. There is a theory that many investors shy away from buying Altria stock for that reason and that the dividend is an incentive.
Almost all of Altria’s cigarette sales are from the Marlboro brand. The brand was first marketed in 1924 and targeted toward women. In the 1950s, the target changed to men.
The stock market has become dangerous. President Trump is in the midst of negotiating imports with dozens of countries. In the case of several trading partners, the figure is high. Negations with China have remained in flux and those with Canada have collapsed
Tariffs are expected to raise the prices of many imported goods sold in America. This robs people of their purchasing power and, in turn, could trigger a recession. Investors need to find safe havens. Altria should be at the top of the list.
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Author: Douglas A. McIntyre
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