Altria faces declining cigarette sales and existential risk, despite stock rise.

From Nasdaq: 2024-10-04 06:05:00

Altria (NYSE: MO) faces a fundamental problem as cigarette sales volumes continue to decline, dropping by 11.5% in the first half of 2024. Despite raising prices, the company’s main business is at risk, posing challenges for the future. Although investors are drawn to the high dividend yield of 8%, Altria’s dependency on cigarettes remains a cause for concern. Conversely, Hormel (NYSE: HRL) has seen falling sales volumes, reflected in its stock price. Altria’s acquisition of NJOY brings some positives, but the company’s long-term prospects are uncertain amidst declining cigarette sales.
Investors are cautioned about investing in Altria due to the existential risk posed by its shrinking cigarette business and reliance on price hikes. Despite the attraction of NJOY, it may not be enough to counter Altria’s challenges. The Motley Fool analysts do not include Altria Group in their list of 10 best stocks for investors right now, highlighting the high-risk nature of the company.



Read more at Nasdaq: Altria’s Stock Is Rising Despite the Business’s Woes: The Wall Street Paradox.