For some Americans, cigarettes are an essential product, despite the cost of smoking averaging $3,000 per smoker per year. ...

Core Points - The U.S. Food and Drug Administration (FDA) has authorized the marketing of six nicotine pouch products owned by Altria [1] - This authorization is part of a pilot program designed to expedite the review process for such products [1] Company Summary - Altria has received FDA approval for six of its nicotine pouch products, indicating a significant step in the company's product portfolio expansion [1] - The pilot program aims to streamline the regulatory process for nicotine products, potentially benefiting Altria and similar companies in the industry [1] Industry Summary - The FDA's initiative reflects a broader trend towards the regulation and acceptance of alternative nicotine delivery systems [1] - The approval of these products may influence market dynamics and competition within the nicotine pouch segment [1]

Key Points Altria has underperformed the S&P 500 in recent years. The stock remains a dividend powerhouse with a yield above 7%. Its future is tied to next-gen products like Njoy and On! 10 stocks we like better than Altria Group › Tobacco stocks like Altria (NYSE: MO) were historically some of the best stocks on the market. Altria, which was joined with Philip Morris International for most of its history, delivered an annual average return of 20% for 50 years with dividends reinvested, thanks to ...

Core Viewpoint - Coca-Cola is positioned to be a more compelling long-term investment compared to Altria, the leading tobacco company, due to its diversified product portfolio and growth potential in a changing market landscape [5]. Group 1: Altria Overview - Altria is a leading tobacco company in America, known for its flagship Marlboro brand, which holds nearly half of the retail cigarette market [2]. - The company is expanding its portfolio with smoke-free products like e-cigarettes and nicotine pouches as adult smoking rates decline [2]. - Altria has consistently increased its dividend since spinning off its international business in 2008, currently offering a forward yield of 7.2% and trading at ten times forward earnings [3]. Group 2: Coca-Cola Overview - Coca-Cola has developed a diverse range of products beyond its traditional sugary sodas, including bottled water, fruit juices, teas, and alcoholic beverages, which has helped mitigate the decline in soda consumption [8]. - The company reported organic sales growth of 16% in 2022, 12% in 2023, and is projected to maintain 12% growth in 2024, contrasting with Altria's declining sales [9]. - Coca-Cola operates a capital-light business model, producing only concentrates and syrups, which allows for high gross margins and more cash for marketing and dividends [10]. Group 3: Financial Performance and Outlook - Analysts expect Coca-Cola's adjusted EPS to grow at a CAGR of 6% from 2024 to 2027, while Altria's adjusted EPS is expected to grow at a CAGR of 4% [12]. - Coca-Cola has a forward dividend yield of 2.9% and has raised its payout for 63 consecutive years, making it a "Dividend King" [13]. - Over the past decade, Coca-Cola has delivered a total return of 126%, while Altria's total return was 99%, indicating Coca-Cola's stronger long-term performance [14]. Group 4: Market Trends and Future Prospects - The S&P 500 is near its all-time high, and the Federal Reserve is expected to cut benchmark rates in 2026, which may lead investors to favor dividend stocks like Coca-Cola over growth stocks [16]. - Coca-Cola is anticipated to benefit from this trend, positioning it as a better investment option compared to Altria for 2026 and beyond [16].

Core Insights - Altria Group, Inc. is observing significant growth in the e-vapor category, with U.S. adult usage projected to reach approximately 21 million consumers by the end of Q3 2025, primarily driven by disposable products [1][9] E-Vapor Market Dynamics - The recent growth in the e-vapor market is largely attributed to disposable e-vapor products, which have added around 2.4 million users and now represent over 60% of the category. These products are typically flavored, low-priced, and widely available, although many lack FDA authorization [2][9] - Altria's e-vapor business, centered around the NJOY brand, focuses on FDA-authorized products, which limits its participation in the segment that is driving most of the new user adoption [2] Regulatory Environment - Altria has advocated for stronger enforcement against unauthorized e-vapor products. Federal agencies have recently intensified actions against illicit e-vapor, including coordinated raids and large-scale seizures, indicating increased regulatory scrutiny in the category [3][9] Financial Performance and Valuation - Altria recorded a non-cash goodwill impairment charge of $873 million in its e-vapor business during the first nine months of 2025, reflecting the challenges faced in this segment [4] - The company's shares have increased by 1% over the past month, compared to the industry's growth of 1.6% [8] - Altria's forward price-to-earnings ratio stands at 10.57X, which is lower than the industry average of 14.19X [10] Earnings Estimates - The Zacks Consensus Estimate for Altria's 2025 earnings per share has increased by 1 cent to $5.44, while the estimate for 2026 has decreased by 1 cent to $5.56 [11]

Core Insights - Altria has a current dividend yield of 7%, significantly higher than the S&P 500 average, although it is below its five-year average of 7.7% [1][6] - The company has increased its annual dividend for 56 consecutive years, qualifying it as a Dividend King, with a target payout ratio of around 80% of adjusted earnings per share [6] Financial Metrics - Altria's annual dividend is $4.24 per share, requiring ownership of 472 shares to generate $500 in annual dividend income, equating to a total investment of approximately $27,716 at the current stock price of $58.72 [2][5] - The current market capitalization of Altria is $99 billion, with a stock price of $59.32 [5] Business Performance - Altria's business is facing challenges due to a decline in the number of U.S. adult smokers, leading to reduced volume; however, the company has managed to offset some of this decline through its pricing power [4] - Despite stagnant revenue growth, Altria has maintained a gross margin of 71.98% [6]

This story was originally published on C-Store Dive. To receive daily news and insights, subscribe to our free daily C-Store Dive newsletter. Altria Group has announced that CEO Billy Gifford will step down after the company’s annual shareholder meeting on May 14, 2026. Executive Vice President and Chief Financial Officer Salvatore “Sal” Mancuso has been selected to succeed him. Heather Newman, senior vice president and chief strategy and growth officer, will take Mancuso’s place as CFO after the transi ...

Core Viewpoint - Altria Group has shown a total return of 13.5% over the past year, primarily driven by high dividend payments, but it still underperformed compared to the S&P 500's total return of 15.6% [2][3]. Performance Analysis - Altria's stock price increased by 6.9% over the past year, which is significantly lower than the S&P 500's increase of 13.8% [2]. - A $1,000 investment in Altria would have grown to $1,135, while the same investment in the S&P 500 would have reached $1,156 [3]. Dividend Insights - Altria has a strong focus on dividends, with the board recently increasing the payout by 3.9% to $1.06 per share, resulting in a dividend yield of 7.2%, which is substantially higher than the S&P 500's yield of 1.1% [4][6]. Business Challenges - Altria's revenue from smokeable products, particularly cigarettes, has been declining, with a 1.3% drop in the third quarter to $4.6 billion. The company is facing challenges with falling cigarette volume and a decrease in market share, especially for its Marlboro brand [5]. Investment Considerations - Despite the attractive dividend yield, the long-term business prospects for Altria appear bleak, leading to a recommendation to avoid investing in the shares [5].

Core Insights - Not all high-yield investments are equally valuable, with four distinct categories identified: declining businesses, manufactured distributions, selling shares, and well-covered qualified dividend yields [1] Group 1: Investment Categories - Declining businesses represent a category of high-yield investments that may not be sustainable in the long term [1] - Manufactured distributions indicate yields that are artificially created rather than derived from genuine business performance [1] - Selling shares as a method to provide high yields can lead to dilution and long-term value erosion for investors [1] - Well-covered qualified dividend yields are considered a more stable and reliable source of income for investors [1]

Group 1 - The focus is on growth and dividend income as a strategy for retirement planning [1] - The portfolio is structured to generate monthly dividend income that grows through reinvestment and annual increases [1] Group 2 - The article expresses personal opinions and is not intended as investment advice [2] - It emphasizes the importance of conducting individual research before making investment decisions [2]