3 Reasons to Buy Altria Stock Like There's No Tomorrow
Sunday, Nov 17, 2024 6:20 am ET
4min read Altria Group, Inc. (NYSE: MO) has been a steady performer in the tobacco industry, offering investors a high dividend yield and consistent earnings growth. Despite recent market fluctuations, there are compelling reasons to consider adding Altria stock to your portfolio. Here are three reasons to buy Altria stock like there's no tomorrow.
1. **Attractive Dividend Yield and Payout Ratio**
Altria's dividend yield of 7.15% is significantly higher than its 5-year average of 5.5% and is more attractive than those of industry peers Philip Morris International (5.2%) and British American Tobacco (6.5%). Additionally, Altria's payout ratio of 80% is lower than Philip Morris' 100% and British American Tobacco's 120%, indicating that the company can sustain its dividend payments without compromising its financial health.
2. **Strong Financial Performance and Revenue Growth**
Altria reported revenue growth of 2.38% in 2024, driven by its innovative smoke-free products like NJOY and on!. The company's adjusted diluted EPS for the first half of 2024 decreased by 1.6%, but it narrowed its full-year 2024 guidance to $5.07 to $5.15, representing a 2.5% to 4.0% growth rate from 2023. Altria's commitment to transitioning adult smokers to a smoke-free future is evident in its strong financial performance and revenue growth.
3. **Regulatory Approvals and Market Share Expansion**
Regulatory approvals, such as Marketing Granted Orders (MGOs) and Premarket Tobacco Product Applications (PMTAs), are crucial for Altria's smoke-free product strategy and market share expansion. In 2024, NJOY, Altria's e-vapor subsidiary, received MGOs for menthol e-vapor products, becoming the first and only company to gain FDA authorization for these products. This approval allows NJOY to market and sell menthol e-vapor products, which are popular among adult smokers looking to switch from combustible cigarettes. Additionally, NJOY submitted PMTAs for next-generation products, further expanding its smoke-free portfolio. These regulatory approvals enable Altria to grow its smoke-free market share, attract more adult smokers seeking alternatives to traditional cigarettes, and ultimately drive revenue growth.
In conclusion, Altria Group, Inc. offers investors an attractive dividend yield, strong financial performance, and a commitment to regulatory compliance and market share expansion. With its focus on smoke-free products and a track record of consistent earnings growth, Altria stock is an appealing investment opportunity for those seeking a combination of income and long-term growth. As always, it is essential to conduct thorough research and consider your risk tolerance before making any investment decisions.
1. **Attractive Dividend Yield and Payout Ratio**
Altria's dividend yield of 7.15% is significantly higher than its 5-year average of 5.5% and is more attractive than those of industry peers Philip Morris International (5.2%) and British American Tobacco (6.5%). Additionally, Altria's payout ratio of 80% is lower than Philip Morris' 100% and British American Tobacco's 120%, indicating that the company can sustain its dividend payments without compromising its financial health.
2. **Strong Financial Performance and Revenue Growth**
Altria reported revenue growth of 2.38% in 2024, driven by its innovative smoke-free products like NJOY and on!. The company's adjusted diluted EPS for the first half of 2024 decreased by 1.6%, but it narrowed its full-year 2024 guidance to $5.07 to $5.15, representing a 2.5% to 4.0% growth rate from 2023. Altria's commitment to transitioning adult smokers to a smoke-free future is evident in its strong financial performance and revenue growth.
MO Revenue By Business
3. **Regulatory Approvals and Market Share Expansion**
Regulatory approvals, such as Marketing Granted Orders (MGOs) and Premarket Tobacco Product Applications (PMTAs), are crucial for Altria's smoke-free product strategy and market share expansion. In 2024, NJOY, Altria's e-vapor subsidiary, received MGOs for menthol e-vapor products, becoming the first and only company to gain FDA authorization for these products. This approval allows NJOY to market and sell menthol e-vapor products, which are popular among adult smokers looking to switch from combustible cigarettes. Additionally, NJOY submitted PMTAs for next-generation products, further expanding its smoke-free portfolio. These regulatory approvals enable Altria to grow its smoke-free market share, attract more adult smokers seeking alternatives to traditional cigarettes, and ultimately drive revenue growth.
In conclusion, Altria Group, Inc. offers investors an attractive dividend yield, strong financial performance, and a commitment to regulatory compliance and market share expansion. With its focus on smoke-free products and a track record of consistent earnings growth, Altria stock is an appealing investment opportunity for those seeking a combination of income and long-term growth. As always, it is essential to conduct thorough research and consider your risk tolerance before making any investment decisions.
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