Want $500 in Passive Income: Invest This Much in Altria Stock

Investing

Published: August 2, 2024 9:44 am

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Altria is a member of the Dividend Kings.
The company has raised the dividend shareholders receive for a stunning 54 years.
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Passive income is characterized by its ability to generate revenue without requiring the earner’s continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.

Those looking to buy solid Dividend Kings stocks may consider tobacco giant Altria Group Inc. (NYSE: MO). The shares are a great idea as a solid passive income-generating machine. The stock has rallied some over the past month and still offers investors a fantastic entry point.

Why Invest in Altria?

Altria is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products.

This tobacco company offers value investors a rich 8.46% dividend. Altria manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

Altria provides cigarettes primarily under the Marlboro brand, as well as:

Cigars and pipe tobacco, principally under the Black & Mild brand
Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
on! Oral nicotine pouches.

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev (NYSE: BUD), the world’s largest brewer. The company sold 35 million of its 197 million shares through a recent global secondary offering. That represents 18% of their holdings but still leaves a hefty 8% of the outstanding shares in their back pocket. They also announced a $2.4 billion stock repurchase plan partially funded by the sale.

How many shares of Altria are needed to generate $500 in passive income

Investors looking to generate $500 per year in passive income by owning Altria shares, which pay $3.92 per share each year, would have to buy 128 shares of the stock at current trading prices. That would be approximately a $5,933 purchase, and with the stock looking to break out to a 52-week high there could be some solid upside potential to go with the passive income.

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