Altria Group offers 7% dividend yield with potential upside in smokeless category

From Yahoo Finance: 2025-05-30 15:41:00

Altria Group (MO) is a top dividend stock with a nearly 7% yield and over 50 years of uninterrupted dividend growth. The company offers consistent shareholder returns through dividend hikes and share buybacks, trading at an attractive valuation compared to the S&P 500. Altria’s 6.76% dividend yield exceeds the S&P 500 average, with a 56-year streak of dividend growth.

Altria’s core tobacco business allows for substantial earnings allocation towards shareholder returns, including $7.9 billion in stock buybacks from 2020 to 2024. The company’s commitment to returning capital demonstrates confidence in its valuation and dedication to enhancing shareholder value. Altria returned nearly $40 billion to shareholders in dividends and buybacks from 2020 to 2024.

Despite declining cigarette consumption, Altria expects steady earnings per share growth of 2% to 5% in 2025. The company sees potential growth in its on! nicotine pouches, with shipment volume increasing 18% year-over-year. Altria’s valuation, trading at a discount compared to peers like Philip Morris International, leaves room for upside potential if it can expand its presence in the smokeless category.

Altria remains a dependable dividend stock with 56 years of dividend increases. With a nearly 7% yield, consistent share repurchases, and projected earnings per share growth in 2025, the company is poised for steady performance. Products like on! nicotine pouches offer additional growth potential, positioning Altria for long-term relevance in the evolving nicotine landscape.



Read more at Yahoo Finance: Dividend Powerhouse Altria Group (MO) Lures Value Investors With 7% Yield