Altria Group Inc. (NYSE: MO) reported first-quarter 2019 results before markets opened on Thursday morning. The Marlboro cigarette maker firm posted quarterly adjusted diluted earnings per share (EPS) of $0.90 on revenue of $4.39 billion. In the same period a year ago the company reported EPS of $0.95 on $4.67 billion in revenues. Reported revenue is net of excise taxes. Consensus estimates had called for EPS of $0.92 and revenue of $4.58 billion.

Last December, Altria invested $1.8 billion for a 45% stake in Canada-based marijuana grower Cronos Group Inc. (NASDAQ: CRON). Then the company splashed out $12.8 billion for a stake in e-cigarette maker Juul. These investments forced the company to pay more interest expenses without “the full benefit of our cost reduction program.” CEO Howard Willard said that Altria “continues to expect full-year adjusted diluted EPS growth of 4% to 7%.”

What investors like best about Altria — and other cigarette makers — is the company’s rich dividend yield of around 5.6% as of last night’s close. The company said it expects to maintain a dividend payout ratio of approximately 80% of adjusted diluted EPS, subject to approval by the board of directors.

Altria paid $1.5 billion in dividends during the first quarter and repurchased 2.7 million shares at a total cost of $151 million. The company has $195 million remaining in its existing buyback program.

In its outlook statement, Altria reiterated its EPS forecast for $4.15 to $4.27 for the full year and continued:

Altria’s 2019 guidance reflects its expectation for a higher full-year adjusted effective tax rate, primarily resulting from lower dividends from AB InBev; increased interest expense from the debt incurred to fund the Cronos and JUUL transactions; savings from the Cost Reduction Program, which Altria expects to build over the course of the year to an annualized level of approximately $575 million; and increased investments related to PM USA’s lead market plans for launching IQOS, once authorized by the FDA. The guidance assumes little-to-no earnings or cash contributions from the Cronos and JUUL investments.

To date, 11 states have banned the sale of tobacco products and e-cigarettes to people under the age of 21. Senate Majority Leader Mitch McConnell is pushing legislation that would prohibit tobacco purchases to all Americans under the age of 21. After spending the best part of $15 billion on pot and e-cigarettes in an effort to diversify its business away from tobacco, Altria risks stronger headwinds for all its businesses.

The company’s shares traded down about 3.9% at $52.56 in Thursday’s premarket session. The stock’s 52-week range is $42.40 to $66.04. The 12-month consensus price target was $59.07 before this morning’s report.

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