[00:00:04] Doug McIntyre: Lee, I wanna tell you what I think investors need to take into account now.
Altria's strong Q2 earnings, robust cash flows, and low P/E support my bullish outlook, despite ongoing cigarette declines and regulatory risks. Growth drivers include expanding oral tobacco market share, potential NJOY relaunch, and upcoming On! PLUS launch pending FDA approval. Balance sheet strength, deleveraging progress, and a likely dividend increase add to Altria's investment appeal and upside potential.
MO's on! sales jump in the second quarter, but MST declines and pouch share losses raise questions about sustaining growth.
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Altria Group, Inc.'s ( MO ) push into smoke-free products gained further traction in the second quarter of 2025, led by its oral nicotine pouch brand, on!. Shipments of on!
Altria (MO) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Altria beat Q2'25 earnings and revenue estimates and grew its core operating segment profits by more than 4% Y/Y. The alternative products segment is seeing expanding market growth while the traditional tobacco segment remained highly profitable. The tobacco firm narrowed its full-year EPS guidance and maintains high excess dividend coverage, supporting a robust 7% dividend yield for investors.
Altria offers a strong, sustainable 6.5% dividend yield, supported by robust earnings and disciplined capital allocation. Growth in alternative tobacco, especially oral and e-Vapor products, offsets declines in traditional smokeables and secures long-term business viability. Despite industry headwinds, Altria delivers 8.3% YoY EPS growth and raises guidance, trading at an attractive 11.5x P/E ratio.
Altria Group Inc. is the notorious tobacco giant formerly known as Philip Morris.
Altria remains a compelling choice for income investors, offering a 6.6% yield and 55 years of dividend growth supported by rising EPS. Recent Q2 results beat expectations, with strong performance in smoke-free products and ongoing share buybacks enhancing shareholder value. With the Fed likely to cut rates, MO's high yield and dividend growth should attract capital seeking income as risk-free rates decline.
Altria remains a buy for me due to its industry-leading dividend yield and potential for double-digit total returns, despite recent price appreciation. The company boasts an exceptional track record of dependable dividend growth, with 59 consecutive annual increases and the likely 60th hike coming in August. While cigarette volumes are declining, cost-cutting and share buybacks are supporting EPS growth, and management's guidance inspires confidence for continued dividend increases.