Ultra-High-Yield Altria Stock: Buy, Sell, or Hold?

Core Viewpoint - Altria offers a high dividend yield of 8.2%, significantly above the S&P 500's 1.2% and the average consumer staples yield of 2.5%, but this comes with substantial risks due to declining cigarette volumes and market challenges [3][4][11]. Group 1: Reasons to Buy Altria - The primary attraction of Altria is its substantial 8.2% dividend yield, which is nearly seven times larger than the broader market's yield [3]. - Altria has a strong presence in the consumer staples sector, known for its stability, and has consistently increased its dividend over the years [4]. - The company holds a dominant market position with a 42% market share in its product category, reinforcing its appeal as a dividend stock [4]. Group 2: Reasons to Sell Altria - Altria's main product, cigarettes, is facing a significant decline in demand, with cigarette volumes falling 11.5% year-over-year in the first half of 2024, following declines of 9.9% in 2023 and 9.7% in 2022 [6][7]. - The company has managed to offset some volume declines through price increases, but this strategy may not be sustainable in the long term [8]. - The ongoing decline in cigarette sales raises concerns about the company's ability to maintain its dividend, making it less attractive for conservative income investors [8][11]. Group 3: Reasons to Hold Altria - Altria's acquisition of NJOY, a vape maker, has shown promising growth, with NJOY's shipment volume increasing by 14.7% sequentially and device shipments rising by 80% [9][10]. - Although NJOY currently represents a small portion of Altria's overall revenue, it may help mitigate declines in the cigarette business if the trend towards vaping continues [10]. - Investors who believe in the long-term potential of vaping may find reason to hold onto Altria shares despite current challenges [10].