Altria Group (NYSE:MO | MO Price Prediction) is a company many investors may not be willing to even consider. The Virginia-based tobacco company is behind the famous Marlboro brand of cigarettes, and is a company that a broad swath of investors won’t ever invest in, anytime, for any reason. That’s certainly fair, and it’s a position that most investors won’t argue with.
But for investors who can look to the future, and Altria’s push to have its smokeless nicotine products (and those which don’t contain tobacco altogether), this is a company that is at least worth a look. From a fundamentals standpoint, Altria is one of those companies that screams value, and has for a long time.
And from a dividend standpoint, Altria’s dividend yield, which is hovering right around 7% is certainly enticing. Here’s why Altria remains one of the best dividend stocks in the market right now, at least in my view.
Strong Performance Continues
Over the past year, Altria is one company that’s far outpaced the market. Forget about the company’s 7% dividend yield for a minute (which actually was much higher the same time last year). The company’s one-year share price performance alone is around 33%, with its year-to-date return coming in at more than 12%. With the S&P 500 falling into correction territory this week, that’s the kind of return investors should pay attention to.
On a relative strength basis, it’s also true that Altria is in an elite group. Altria’s stock has outperformed 90% of other stocks over the past year, reflecting strong price performance and expectations that this performance could continue.
I think Altria is among the leading dividend stocks in terms of momentum right now. And that’s in a market where the only momentum most investors can find is to the downside. This is a resilient company with a business model driven by some of the most robust demand in the market. That’s a setup that should justify a higher valuation multiple over time. And given Altria’s current forward price-earnings multiple of just 11-times, I’d argue there’s plenty of room for this stock to run higher.
What’s the Outlook for Altria?
Altria office sign
Altria remains a controversial stock, balancing stable earnings and dividends against declining smoking rates. Over five years, the company’s smokeable product shipments fell from 103.45 billion to 70.34 billion sticks, with its cigarette market share dropping to 45.9%. To counter losses, the company raised prices, cut costs, and repurchased shares to sustain EPS and dividend growth.
Altria plans to sustain growth by expanding smokeless products like Njoy and On nicotine pouches while gradually reducing reliance on cigarettes, which still accounted for 87% of revenue in 2024. The company now expects adjusted EPS growth of 2%-5% in 2025, with analysts forecasting a 3% CAGR through 2030, potentially pushing shares to $68. Despite slowing cigarette sales, Altria continues prioritizing dividends and buybacks.
If Altria keeps its 61% payout ratio, dividends could reach $3.78 per share, yielding 5.6% at a $68 stock price. Though lower than its current 7.1% yield, it may still appeal to income investors if interest rates drop. While not a high-growth stock, Altria remains a stable dividend option amid market volatility.
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