24/7 Insights:
- Altria Group Inc. (NYSE: MO) has several reasons for its generous dividend.
- Its yield is almost certain to stay high for years.
The share price of Altria Group Inc. (NYSE: MO), the tobacco company, has risen 14% this year to about $46. That compares to an 11% gain for the S&P 500. The stock also has an 8.52% dividend yield. Altria is rarely purchased because it is a candidate for sharp price increases, so for some investors, the yield must be sufficient.
Altria’s yield may be so high because its management believes people are reluctant to own stock in a company that makes cigarettes. However, there is no firm proof of that. The stock has other reasons that make it attractive, particularly for investors who value extraordinary yield compared to the shares of almost any other U.S. company that trades on a major exchange.
Altria recently posted solid but uninspiring financials. However, the numbers also showed that the company has a rock-solid balance sheet that allows it to keep the dividend payout high.
Revenue dropped 2% to $5.6 billion in the first quarter of 2024, while diluted per-share earnings rose 21% to $1.21. Another important part of the announcement was that the board increased the money authorized for share buybacks by $2.4 billion above the then-current $1.0 billion level. It added that dividend payout in the first quarter totaled $1.7 billion. Finally, management affirmed its guidance for the rest of the year.
Among the most important things for investors is that Altria has $3.6 billion on its balance sheet. The maturity of its $25 billion in long-term debt stretches out for years.
Finally, most of Altria’s revenue is based on one of the world’s best-known and most valuable brands. Marlboro often shows up on lists of most valuable brands and has for as long as there have been such lists. The Marlboro brand is almost exactly 100 years old.
It is almost certain Altria’s yield will stay high for years.
∴
The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%1 today. Checking accounts are even worse.
But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.