Altria (MO) reported earnings 30 days ago. What's next for the stock?
Altria has outperformed the S&P 500 despite negative sentiment, validating my thesis of steady EPS growth and double-digit total returns. Strong capital allocation is evident through consistent dividends, share buybacks at fair value, and improved profit margins despite declining sales. While some acquisitions like Juul and NJOY were value-destructive, the on! brand shows strong growth and potential in the oral tobacco market.
Blue-chip dividend stocks are truly hard to find, particularly when investors start looking for names with big dividend yields that also provide relative stability (and Wall Street analysts think have significant upside potential).
When investors look for dividend stocks, one of the first metrics they consider is dividend yield. This measure measures how much a company pays out in annual dividends relative to its stock price.
A high dividend yield of 7.9% makes Altria a great opportunity for income seeking investors. Its P/E ratio of 10-11x suggests the stock might be undervalued amidst a conservative outlook. Adverse regulatory developments, such as widespread flavor bans impacting nicotine pouches or unexpectedly stringent regulations on HNB products could impact Altria depedning upon their response.
Recently, Zacks.com users have been paying close attention to Altria (MO). This makes it worthwhile to examine what the stock has in store.
Philip Morris leads in terms of its global growth and its smoke-free future strategy, making it a strong long-term buy.
Altria offers a compelling mix of a high, growing dividend yield and capital appreciation, despite sector stigma and regulatory risks. MO's strong profitability, robust cash flow, and ongoing share buybacks support continued EPS and dividend growth, even with flat top-line revenue. The company is strategically transitioning toward smoke-free products, maintaining momentum in oral nicotine and e-vapor segments to offset cigarette declines.
MO is backed by strong fundamentals, pricing power and long-term growth potential in smoke-free products.
Recently, Zacks.com users have been paying close attention to Altria (MO). This makes it worthwhile to examine what the stock has in store.
Altria had mixed Q1'25 earnings, driven by challenges in both the traditional tobacco market and its new alternative products category. The U.S. International Trade Commission's importation ban on NJOY ACE vape products created short-term uncertainty, but Altria plans to appeal the decision. The import ban forced the company to record an impairment charge in the amount of $873M.
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