Altria presents a solid option for those looking to invest over the long haul.
In 2022 and 2023, many dividend stocks took a hit as increasing interest rates led investors to safer choices like CDs and T-bills. But, as the Federal Reserve eased its benchmark interest rate for the sixth consecutive time, a number of these stocks bounced back in 2024 and 2025.
Among these recovery stories is Altria (M.O. +3.73%), the leading tobacco company in the U.S. Over the past two years, Altria’s stock has climbed over 50% compared to a 40% increase in the S&P 500 index. It’s worth exploring why investing $10,000 (or even more) here could be wise for years ahead.
Why Altria stands out as a dividend stock
Once known as Philip Morris USA, Altria has spun off its international operations into: Philip Morris International (afternoon +0.87%). While some might view this domestic tobacco company as a risk—especially with the U.S. adult smoking rate at a 60-year low—it still boasts the Marlboro brand, which owns over 40% of the U.S. retail cigarette market. They manage to maintain profits by consistently raising prices, despite declining sales, and executing stock buybacks to enhance earnings per share (EPS).
The company is also diversifying its offerings with smokeless products like e-cigarettes, nicotine pouches, and snus, which are intended to reduce reliance on traditional cigarettes and cigars. Notably, Altria aims to accelerate this shift following its acquisition of NJOY, a major player in the e-cigarette market, which wrapped up in 2023.
Looking ahead, analysts project a 3% rise in Altria’s adjusted EPS by 2026 and 4% by 2027. The firm generates sufficient cash to support its dividend yield of 7.1%, having increased dividends 60 times over the past 56 years. At around $62, the stock’s forward P/E ratio of 11 suggests it’s still relatively undervalued.
Today’s changes
(3.73%) $2.23
current price
$61.99
Key data points
Market capitalization
$104 billion
daily range
$59.80 – $62.00
52 week range
$51.85 – $68.60
volume
13M
average volume
9.7 million
gross profit
75.83%
dividend yield
6.71%
Is Altria a forever investment?
Honestly, I wouldn’t label Altria as a forever investment. The core cigarette business continues to decline, which could limit the company’s ability to raise prices or cut costs to make up for falling shipments. Growing the smokeless product range may take longer than desired to offset these challenges.
That said, I still see Altria as a dependable stock for income that could be worth holding onto for years. The company has various strategies to maximize its current customer base, and its attractive valuation combined with high yield might help cushion the stock during any market downturns. It may not be the most thrilling stock out there, but it can deliver consistent returns in a fluctuating market.
