The Best Stock to Own in a Market Sell-Off

24/7 Wall St. Insights

• On days when the market sells off, Altria Group Inc. (NYSE: MO | MO Price Prediction) stock often fares better.
• Its dividend remains attractive to investors who like steady but not outstanding performance.
• Also: 2 Dividend Legends to Hold Forever.

Nvidia Corp. (NASDAQ: NVDA) stock fell almost 9% in one day, wiping out hundreds of billions of dollars of market cap. Some analysts believe that, despite its remarkable growth, the tech movement toward artificial intelligence (AI) will slow as Nvidia customers try to figure out how to make money from it. In a market collapse, very few huge companies are good market havens. At the top of that list is Altria Group Inc. (NYSE: MO), the country’s largest cigarette company.

Altria’s yield is 7.8%. Some people think it is so high because people do not want to own the stock of a company that makes products that kill people. That may not be the reason at all. Altria is a cash machine that must decide where to put the money it makes. It has paid out $32 billion in dividends since 2019.

Altria shares do not move much, up or down, which is a disadvantage in a rapidly rising market but a blessing in a falling one. Its 52-week trading range is $39.07 to $54.48 per share. It has increased at about the same rate as the S&P 500 in the past year. On days when the market sells off, Altria often fares better. Over two years, its performance has been much more boring, up about 20%, which is half the S&P 500 increase. However, across that period, its dividend was still attractive to investors who liked steady but not outstanding performance—as long as the dividend was there.

Altria’s financials are equally dull. In the first half of this year, revenue fell 3.6% to $11.8 billion. Per-share earnings increased by 56% to $3.41. On an adjusted basis, which excluded one-time items, earnings fell 2% to $2.46 per share. Finally, most of the revenue is driven by one of the oldest and best-known brands in the world. Marlboro is Altria’s revenue engine.

For $500 in Passive Income, Invest This Much in Altria Stock