Core Viewpoint - The article compares Altria and Philip Morris International, highlighting their differing business models, financial performance, and growth prospects in the tobacco industry, particularly in the context of their transitions to smoke-free products. Business Model Comparison - Altria and Philip Morris, despite sharing cigarette brands, have different business models, with Altria focusing on the U.S. market and Philip Morris on international markets [2][3] - Philip Morris has successfully developed next-generation products like Iqos and Zyn, gaining significant market share, while Altria has struggled with its investments in Juul and cannabis [4][5][6] Financial Performance - In 2024, Altria's revenue declined by 1.9% to $24 billion, primarily due to a 10.2% drop in cigarette shipment volume, although it maintained a high adjusted operating margin of 61.2% [8][9] - Philip Morris reported a 7.7% increase in revenue to $37.9 billion, with a 0.6% rise in international cigarette volume and a 16% increase in operating income [9] Dividend and Valuation - Altria offers a dividend yield of 7% and trades at a price-to-earnings ratio of 11.3, maintaining a strong reputation as a dividend payer [10][11] - Philip Morris has a lower dividend yield of 3.5% but a higher P/E ratio of 22, reflecting its faster growth and success in next-gen products [11] Growth Prospects - Altria is beginning to see growth from its investment in Njoy, but it continues to face revenue losses and challenges in its core cigarette business [12] - Philip Morris is experiencing growth in both its next-gen products and its cigarette business, indicating a more favorable long-term growth trajectory [12][13]

Group 1 - The article recommends a BUY rating for Altria Group (NYSE: MO) stock, highlighting its potential for high income and growth with isolated risks through dynamic asset allocation [1] - The investment strategy includes two model portfolios: one focused on short-term survival/withdrawal and the other on aggressive long-term growth [1] - The author emphasizes the importance of direct access for discussions, monthly updates on holdings, and tax discussions related to investments [1] Group 2 - Sensor Unlimited, the economist behind the analysis, has a PhD and a decade of experience covering the mortgage market, commercial market, and banking industry [2] - The focus of Sensor Unlimited's work includes asset allocation and ETFs, particularly in relation to the overall market, bonds, banking, and housing sectors [2]

Core Insights - The interconnectedness of today's markets necessitates that investors stay informed about the relationships between different asset classes [1] - A spike in S&P 500 volatility has led to increased bond prices, which in turn lowers yields, making other assets more attractive [2][3] - Dividend-focused investments are becoming increasingly valuable as alternatives to bonds, particularly in the current market environment [4][5] Investment Opportunities - The Schwab US Dividend Equity ETF (SCHD) has seen significant institutional capital inflow, with $13 billion invested over the past quarter, indicating strong demand for dividend income amid market volatility [5][6] - Realty Income Co. offers a monthly dividend payout of $3.21 per share, translating to an annualized yield of 5.66%, making it an attractive option for income-focused investors [8][10] - Altria Group Inc. has a dividend yield of 7.01% with a strong track record of dividend increases over 56 years, despite recent sluggish retail sales data [12][15] Market Dynamics - The current bond yields are approaching 4.0%, making dividend-paying stocks like SCHD and Realty Income more appealing [6][7] - Realty Income's stock has shown resilience, trading at 95% of its 52-week high, indicating bullish market sentiment despite a flat performance over the past year [14] - Altria's low beta of 0.6 suggests it is less volatile than the S&P 500, providing a defensive investment option in uncertain market conditions [14][15]

Altria Group, Inc. (MO) is strategically managing a challenging market environment by balancing its traditional tobacco business with an ambitious shift toward smoke-free alternatives. While the company is facing pressure in its core Smokeable Products segment due to weakened volumes, its ongoing efforts to embrace a smoke-free future show promise. Investments in brands like NJOY and on! reflect Altria’s forward-thinking strategy, which could drive long-term growth. However, the rise of illegal disposable e ...

Group 1 - The article highlights that Trump has shifted towards a pro-cannabis stance since his election campaign, which could significantly benefit Altria (NYSE: MO) [1] - In August of the previous year, Trump expressed that tax dollars should not be wasted on arresting individuals for cannabis-related offenses [1] Group 2 - Aseity Research focuses on high-yield income investing combined with tech-driven growth, providing insights on stocks, ETFs, CEFs, and options strategies [1]

Altria (MO 1.37%) and British American Tobacco (BTI 1.84%) both have attractively large yields, at 7.4% and 7.7%, respectively. By comparison, the S&P 500 index is only yielding 1.2% while the average consumer staples stock has a yield of roughly 2.7%. There's just one problem: The main product made by these two companies, cigarettes, is in decline. But there's a difference in the rates of decline Altria and British American Tobacco are facing.Selling smokes is a tough businessCigarettes were once viewed as ...

Altria (MO 1.40%) isn't a household name in the consumer staples sector, but its main brand is probably one you know. Indeed, its Marlboro cigarette brand has a nearly 42% share of the U.S. cigarette market. Add in a 7.3% yield backed by a growing dividend, and you can see why investors would be attracted to Altria's shares. Could a $10,000 investment help get you to millionaire status? Maybe, but you need to balance the reward against the risk before jumping in.What does Altria do?Altria is a consumer stap ...

Company Overview - Altria is a consumer staples company primarily focused on cigarette production, which is distinct from other consumer staples companies that produce essential goods like food and toiletries [1][2] - The company has a high dividend yield of 7.4%, attracting dividend-focused investors [1] Market Dynamics - Cigarettes are not considered a necessity, but their addictive nature leads to consistent demand, even during economic downturns [2] - Historical data shows that during the pandemic in 2020, cigarette volumes only declined by 0.4%, but subsequent years have seen significant volume declines [3][5] Volume Decline - Altria's cigarette volumes have experienced a troubling trend: a 7.5% decline in 2021, 9.7% in 2022, 9.9% in 2023, and a projected 10.2% drop in 2024 [5] - The ongoing decline in cigarette volume poses a significant risk to the company's financial health and dividend sustainability [6] Pricing Strategy - The company has been offsetting volume declines through price increases, which has allowed it to maintain and increase its dividend [6] - However, there are concerns that continued price hikes may exacerbate volume declines in the long run [6] Strategic Challenges - Altria has attempted to diversify its business beyond cigarettes, investing in vaping and marijuana, but these efforts have not yielded successful outcomes [7] - The company's latest investment in NJOY is facing legal challenges, further complicating its growth strategy [7] Investment Considerations - Altria is struggling with its core cigarette business and has not effectively transitioned to new growth platforms, making it a risky investment for dividend-focused investors [8]

Regimes are changing in the market, and this could mean a few things, but today, it means that volatility is back. Whenever these shifts come, specifically to the S&P 500 index, investors tend to decrease their exposure to riskier stocks to look for more defensive names in the market to cushion some of the risks that come with these volatility spikes. This is where names in the consumer staples sector usually come into play. These stable and predictable business models and product lines usually carry low be ...

Shipment Volumes - Total smokeable products segment's cigarette shipment volume in the United States was 68.6 billion units in 2024, a decrease of 10.2% from 2023[22]. - Total smokeable products segment's cigars shipment volume was approximately 1.8 billion units in 2024, a decrease of 1.5% from 2023[23]. - Total oral tobacco products segment's shipment volume was 774.7 million units in 2024, a decrease of 1.0% from 2023[24]. Financial Performance - Net revenues for 2024 were $24,018 million, a decrease of 1.9% from $24,483 million in 2023[419]. - Gross profit for 2024 was $14,367 million, slightly up from $14,284 million in 2023[419]. - Net earnings increased to $11,264 million in 2024, compared to $8,130 million in 2023, representing a growth of 38.5%[419]. - Basic and diluted earnings per share rose to $6.54 in 2024, up from $4.57 in 2023, marking an increase of 43.2%[419]. - Total assets decreased to $35,177 million in 2024 from $38,570 million in 2023, a decline of 8.5%[413]. - Total liabilities decreased to $37,365 million in 2024 from $42,060 million in 2023, a reduction of 11.1%[416]. - Cash and cash equivalents were $3,127 million in 2024, down from $3,686 million in 2023, a decrease of 15.1%[413]. - The fair value of long-term debt was $22.7 billion in 2024, down from $24.4 billion in 2023[411]. - Cash provided by operating activities was $8,753 million in 2024, compared to $9,287 million in 2023, a decrease of 5.7%[425]. - For the year ended December 31, 2024, net cash used in financing activities was $11,491 million, an increase of 37.8% compared to $8,374 million in 2023[428]. - The balance of cash, cash equivalents, and restricted cash at the end of 2024 was $3,158 million, down from $3,721 million in 2023, representing a decrease of 15.1%[428]. - Cash dividends declared per share increased to $4.00 in 2024 from $3.84 in 2023, reflecting a 4.2% increase[432]. - The company repurchased $3,400 million of common stock in 2024, significantly higher than the $1,000 million repurchased in 2023, marking a 240% increase[432]. Acquisitions and Investments - The acquisition of NJOY Holdings, completed on June 1, 2023, resulted in NJOY becoming a wholly owned subsidiary of Altria[436]. - The company assigned exclusive U.S. commercialization rights to the IQOS Tobacco Heating System to Philip Morris International Inc. on April 30, 2024[27]. - Altria entered a joint venture with JTI for the U.S. marketing of heated tobacco products, owning a 75% economic interest in the venture as of December 31, 2024[437]. - The company acquired NJOY Holdings for approximately $2.9 billion, consisting of $2.75 billion in cash and up to $500 million in contingent payments based on FDA authorizations[472]. - The fair value of contingent payments related to the NJOY acquisition was approximately $130 million at the acquisition date, with a remaining fair value of $20 million as of December 31, 2024[473][474]. - The company recorded a pre-tax gain of $2.7 billion in 2024 from the assignment of U.S. commercialization rights to the IQOS System, with total cash payments received amounting to approximately $2.8 billion[491]. Workforce and Diversity - As of December 31, 2024, the company employed approximately 6,200 people, with 26% being hourly manufacturing employees who are members of labor unions[49]. - The company recognizes the importance of a diverse workforce and aims to enhance diversity within its organization and leadership teams[36]. Safety and Health - The Occupational Safety and Health Administration recordable injury rate for 2024 was 1.8%, an increase from 1.2% in 2023[48]. Tax and Compliance - The provision for income taxes in 2024 was $2,394 million, a decrease of 14.5% compared to $2,798 million in 2023[565]. - The balance of unrecognized tax benefits at the end of 2024 was $282 million, down from $1,608 million at the end of 2023[566]. - The company recorded a tax benefit of $887 million in 2024 due to the reversal of an unrecognized tax benefit related to a $6.4 billion ordinary loss recognized in 2023[567]. Goodwill and Intangible Assets - Goodwill increased to $6.9 billion in 2024 from $6.8 billion in 2023, primarily due to adjustments related to the NJOY Transaction[490]. - The estimated fair value of the Skoal trademark was determined to be $3.6 billion after a non-cash, pre-tax impairment of $354 million was recorded in 2024 due to declining sales volumes[493]. - The company amortizes intangible assets over a weighted-average period of approximately 18 years, with estimated annual amortization expense for the next five years projected at $150 million[478]. - The annual impairment test for goodwill and indefinite-lived intangible assets resulted in no impairment charges for 2024, 2023, and 2022, with the e-vapor reporting unit and Skoal trademark exceeding their carrying values by approximately 28% ($0.3 billion) and 7% ($0.3 billion), respectively[494]. Financial Instruments and Risk Management - The company uses various types of derivative financial instruments to mitigate market risks, including foreign currency exchange rate risk[449]. - The company recognizes a liability for the fair value of obligations from qualifying guarantee activities, with further details provided in the financial statements[456]. Restructuring and Initiatives - The company is implementing a multi-phase Optimize & Accelerate initiative to increase organizational speed, efficiency, and effectiveness[47]. - The company expects total pre-tax charges for the Optimize & Accelerate initiative's initial phases to be approximately $100 million to $125 million, with $68 million incurred in 2024[500]. - Restructuring liabilities related to the Optimize & Accelerate initiative were $35 million at December 31, 2024, all of which were severance liabilities[501]. - The company expects to complete the design and detailed plans for all phases of the Optimize & Accelerate initiative by early 2026[499].