3 Reasons to Buy Altria Stock Like There's No Tomorrow

Core Points - Altria is a polarizing stock, attracting both strong support and significant criticism from investors due to its unique market position and challenges [1] Group 1: Dividend Yield - Altria offers a substantial dividend yield of 7.3%, significantly higher than the average yield of 2.6% for consumer staples and 1.2% for the S&P 500 [2] - The company has a history of regularly increasing its dividend, making it appealing to dividend investors [2] Group 2: Cigarette Sales Decline - Altria has experienced a consistent decline in cigarette sales, with volume falling 9.7% in 2022, 9.9% in 2023, and 10.6% in the first three quarters of 2024 [3][4] - The ongoing decline raises concerns about the sustainability of its primary business [4] Group 3: Market Position - Altria controls the Marlboro brand, which holds a 41.7% market share in the North American cigarette industry and a 59.3% share in the premium segment [5] - The company's lack of diversification, being primarily focused on the North American market and the Marlboro brand, poses risks if sales continue to decline [6] Group 4: Competition from Philip Morris International - Philip Morris International, which operates outside North America, has begun entering the North American market with non-cigarette tobacco products, creating competition for Altria [7] Group 5: Growth Potential with NJOY - Altria's acquisition of vape maker NJOY shows promise, with a 15.6% increase in consumables shipment volume in Q3 2024 compared to the same quarter in 2023, and NJOY's market share rising to 6.2% [8] - Despite the positive growth, NJOY remains a small part of Altria's overall revenue, contributing only $19 million to$18.044 billion in Q3 2024 [10] Group 6: Historical Challenges - Altria's previous attempts to diversify, including investments in Juul and a marijuana company, resulted in significant write-offs, raising skepticism about the long-term viability of NJOY [9][11] Group 7: Investment Considerations - While Altria has attractive features, it is not a straightforward investment, and potential investors should be aware of the associated risks and monitor the company's performance closely [12]