Group 1 - Altria Group (MO) is recognized as a shareholder-friendly business, particularly appealing to dividend investors due to its consistent distributions over the years [1] - The author emphasizes the importance of dividend investing as a straightforward path to achieving financial freedom, highlighting its accessibility for individuals [1] - The author's professional background includes extensive experience in M&A and business valuation, which informs their investment strategies and insights [1] Group 2 - The focus of the author's investment portfolio includes sectors such as technology, real estate, software, finance, and consumer staples, which have been areas of advisory and personal investment [1] - The motivation for sharing insights on Seeking Alpha stems from a desire to enhance personal knowledge and provide value to others pursuing similar financial goals [1]

Core Viewpoint - Investors are shifting towards defensive stocks amid heightened market volatility and concerns about potential bubbles in technology sectors, particularly artificial intelligence [2][4]. Group 1: Market Trends - The Nasdaq Composite Index experienced a decline of 1.4%, indicating a sell-off in many tech stocks as risk appetites diminish [2]. - Gold and silver prices have shown significant volatility, prompting investors to seek more stable stores of value [3]. Group 2: Defensive Stocks Performance - Walmart's market capitalization surpassed $1 trillion for the first time, driven by increased consumer traffic to its stores and e-commerce platforms [5]. - Verizon is regaining customers in the wireless and fiber internet sectors under new leadership, with expectations of free cash flow growth of approximately 7% to over $21 billion by 2026 [5]. - Altria, despite facing challenges from declining smoking rates, paid $7 billion in dividends in 2025 and anticipates adjusted earnings per share growth of up to 5.5% in 2026 [6]. Group 3: Investment Strategy - Defensive dividend stocks are becoming attractive to risk-conscious investors as they provide reliable income and stability during challenging market conditions [4].

Investment Strategy - The investment approach focuses on generating additional income through dividends, emphasizing companies with significant competitive advantages and strong financials [2] - A combination of high Dividend Yield and Dividend Growth is recommended to reduce dependence on broader stock market fluctuations [2] - The strategy includes constructing a well-diversified portfolio across various sectors and industries to minimize volatility and mitigate risk [2] Portfolio Composition - Suggested investment portfolios typically consist of a blend of ETFs and individual companies, highlighting broad diversification and risk reduction [2] - The selection process for high dividend yield and dividend growth companies is meticulously curated, prioritizing total return, which includes both capital gains and dividends [2] - The approach aims to maximize returns while considering the full spectrum of potential income sources [2]

Core Viewpoint - Altria Group, Inc. is recognized as one of the best non-REIT dividend stocks to invest in, despite recent adjustments to its price target by analysts [1][2]. Financial Performance - Altria reported fourth-quarter EPS of $1.30, which remained flat compared to the previous year and met expectations. However, operating costs exceeded expectations in both the Smokable and Oral Products segments, impacting overall performance [3]. - The company provided initial guidance for 2026 that aligns with consensus expectations, with a significant portion of earnings anticipated in the latter half of the year [3]. Long-term Goals - Management outlined long-term objectives through 2028, targeting mid-single-digit adjusted diluted EPS growth, starting from a base of $4.871 in 2022. From 2022 to 2025, Altria achieved a reported diluted EPS growth rate of 8.9% and an adjusted diluted EPS growth rate of 3.6% [4]. Dividend Strategy - Altria plans to continue increasing its dividend at a mid-single-digit pace through 2028. The company highlighted a 3.9% dividend increase in 2025, marking the 60th increase in the past 56 years. Future dividend payments will be subject to the discretion of the board [5].

Altria products and coins on desk as a screen shows the stock rising. Key Points Altria's stock is gaining momentum as strong cash flow, pricing power, and disciplined capital returns support both dividend stability and potential price appreciation. A nearly 7% yield and consistent EPS growth guidance position MO as an attractive option for investors seeking reliable income with upside potential. Next-generation products like on! nicotine pouches and NJOY are fueling a shifting narrative, suggesting Al ...

Group 1 - Altria Group, Inc. expects profit improvement in the second half of the year due to a U.S. tax rebate related to higher cigarette imports and exports [2] - The company's full-year 2026 profit outlook is above analyst expectations, supported by a tax provision allowing tobacco companies to reclaim federal excise taxes on exported products [3] - Altria has historically struggled to benefit from this tax provision but is now working with international partners to expand cigarette exports through contract manufacturing [4] Group 2 - Altria's finance chief indicated the importance of utilizing the tax provision to avoid competitive disadvantages as traditional tobacco volumes decline [5] - The company anticipates adjusted earnings of $5.56 to $5.72 per share for 2026, with the midpoint exceeding the analyst consensus estimate of $5.58 [6] - Altria operates a portfolio of tobacco products primarily for U.S. consumers aged 21 and older, focusing on smokeable and oral tobacco offerings [6]

Core Insights - The tobacco sector is primarily represented by two industry leaders: Altria Group, Inc. and Philip Morris International Inc., each with distinct geographic focuses and strategies to adapt to the evolving nicotine landscape [1][2] Altria Group, Inc. (MO) - Altria focuses on the U.S. market, leveraging its Marlboro brand while expanding into smoke-free alternatives like NJOY and oral nicotine products [2] - In 2025, Altria achieved a 4.4% increase in adjusted earnings per share and returned approximately $8 billion to shareholders through dividends and share repurchases, highlighting its strong cash-flow generation [3] - The smokeable products segment generated over $11 billion in adjusted operating income with margins expanding to 63.4%, demonstrating Altria's pricing power despite a 9.5% decline in domestic cigarette volumes [4][6] - Altria's smoke-free strategy is advancing, with on! brand shipment volumes rising 10.9% in 2025, and plans for a national rollout of on! PLUS to capture growth in the nicotine pouch category [5] - The long-term investment outlook for Altria is challenged by structural and regulatory headwinds, with ongoing volume declines in traditional cigarettes [6] Philip Morris International Inc. (PM) - Philip Morris is transitioning towards smoke-free products, with smoke-free offerings accounting for 41% of total net revenues and 42% of gross profit in Q3 2025, driven by strong performance from IQOS, ZYN, and VEEV [7][8] - The company reported a record quarterly smoke-free gross profit of $3.1 billion, indicating a shift towards a more sustainable profit model [7] - Philip Morris' operational discipline and productivity initiatives have supported margin expansion and earnings growth, despite a 3.2% decline in cigarette shipment volumes in Q3 [10][11] - The reliance on smoke-free products introduces risks, as any slowdown in adoption could impact the ability to offset declines in combustible product volumes [11] Stock Performance and Valuation - Over the past year, Altria's shares increased by 15.9%, underperforming Philip Morris, which surged by 36.5%, and the industry's growth of 38.7% [12] - Altria's forward P/E ratio is 10.7, slightly below its one-year median, while Philip Morris' forward P/E ratio stands at 21.12, above its median [13] - Philip Morris is viewed as a more promising investment due to its diversified international presence and established portfolio of reduced-risk products, while Altria's growth is limited by its heavy exposure to the U.S. cigarette market [16][17]

Core Insights - Altria's stock dropped 5% following a Q4 earnings miss, with revenue of $5.08 billion exceeding expectations but adjusted EPS of $1.30 falling short of the $1.32 consensus, leading to a sell-off as investors prioritize earnings quality over revenue surprises in the tobacco sector [2] Financial Performance - The GAAP operating margin fell significantly from 56.4% in Q4 2024 to 30% in Q4 2025, primarily due to a $1.3 billion non-cash impairment charge related to its e-vapor business, while adjusted operating margin was 60.4%, down 80 basis points year-over-year [5] - Altria reported trailing twelve-month revenue of $20.91 billion, essentially unchanged from three years prior, with an annualized volume growth of only 2.8% over five years, indicating a cash generation story rather than a growth narrative [6] 2026 Guidance - The full-year adjusted EPS guidance for 2026 is set at $5.56-$5.72, reflecting only a 2.5-5.5% growth from 2025's $5.42, which barely matches inflation rates, with anticipated growth weighted towards the second half of the year [7] Valuation and Shareholder Returns - Altria's stock is priced around $60 per share, trading at 11 times trailing earnings with a 7.2% dividend yield, having returned $8 billion to shareholders in 2025 through dividends and share buybacks [8][9] - The current 11x multiple is significantly lower than the last five-year average of 16x, indicating a potentially appealing valuation on paper [9] Competitive Position - Altria holds the largest U.S. cigarette market share via Marlboro but faces structural challenges, with U.S. cigarette volumes dropping 6% annually from 2019 to 2024, outpacing a global decline of 1% [10] - The company enjoys pricing power in a mature market, yet volume erosion is accelerating, and while the on! pouch market is expanding, it is starting from a small base and faces intense competition [10] Investment Proposition - The investment proposition for Altria involves owning a declining business that offers over 7% annually while it shrinks, with minimal earnings growth and a slow transition to smoke-free products [11] - The value proposition lies in collecting a substantial dividend while hoping for future growth from smoke-free products, appealing to income investors who can tolerate gradual decline [12]

Core Viewpoint - Altria, known for its leading cigarette brand Marlboro, operates exclusively in the U.S. and is considered a potential investment opportunity due to its undervalued status and the balance of risk and reward [1]. Company Overview - Altria is the owner of the market-leading cigarette brand Marlboro, which is a significant player in the U.S. tobacco market [1]. Investment Strategy - The focus is on identifying undervalued stocks with promising potential, emphasizing limited risks and decent to high upside [1]. - The belief is that the best investment ideas are often the simplest, and a contrarian approach may yield better results [1].

Core Viewpoint - The article emphasizes the advantages of a dividend-focused value investment strategy, highlighting its focus on capital preservation and consistent income growth [1]. Group 1: Investment Strategy - The investment strategy prioritizes high-quality value stocks that provide significant growth potential and long-term safety [1]. - The author encourages engagement with readers through various platforms, indicating a community-oriented approach to sharing investment insights [1]. Group 2: Personal Investment Position - The author has a beneficial long position in the shares of specific companies, indicating a personal investment commitment to the discussed stocks [2]. - The article reflects the author's personal opinions and experiences as a private investor, rather than professional financial advice [3].